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 GMS Reports Record Sales for Fourth Quarter and Fiscal 2017
   Thursday, June 29, 2017 7:00:02 AM ET

--- Fiscal 2017 Net Sales Increased 24.8% to $2.32 Billion -

--- Fourth Quarter Net Income Improved by 59.6% to $14.3 Million -

--- Fourth Quarter Adjusted EBITDA Increased $8.5 Million to $52.1 Million -

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, 2017.

Fourth Quarter 2017 Highlights Compared to Fourth Quarter 2016

-- Net sales increased 16.7% to a record $615.0 million; base business net sales increased 5.6% with 2 fewer shipping days

-- Wallboard unit volume grew 11.1% to a record 906 million square feet

-- Net income increased to $14.3 million, or $0.34 per diluted share, compared to $8.9 million, or $0.27 per diluted share

-- Adjusted EBITDA grew 19.5% to $52.1 million

-- Adjusted EBITDA margin improved 20 basis points to 8.5% as a percentage of net sales

-- Net debt to Adjusted EBITDA declined from 4.3x to 2.9x

-- Strengthened existing presence in Hawaii

Fiscal Year 2017 Highlights Compared to Fiscal Year 2016

-- Net sales increased 24.8% to $2.32 billion; base business net sales up 10.0%

-- Net income increased to $48.9 million, or $1.19 per diluted share, compared to $12.6 million, or $0.38 per diluted share

-- Adjusted EBITDA increased 36.2% to $188.2 million, improving 70 bps as a percentage of net sales

-- Completed 8 acquisitions with a combined $215.9 million of trailing twelve month net sales

-- Expanded nationwide footprint to 42 states and District of Columbia

Mike Callahan, President and CEO of GMS, stated, "The fourth quarter represented another quarter of strong growth in net sales supported by price gains in each product category, steady end market demand and the contribution of successful acquisitions. We were pleased with this progress and our ability to continue growing our business to deliver a 19.5% year-over-year increase in Adjusted EBITDA for the fourth quarter. These results capped an exciting year for GMS, marked by our successful IPO, record sales and Adjusted EBITDA growth of 36.2%, along with significant improvement in our leverage metrics. Through our proven growth strategy, we remain confident in our ability to capitalize on healthy demand trends and execute on our robust acquisition pipeline to build upon our market leading positions and continue to deliver strong performance in net sales and Adjusted EBITDA in fiscal 2018."

Fourth Quarter 2017 Results

Net sales for the fourth quarter of fiscal 2017 ended April 30, 2017 were $615.0 million, compared to $527.2 million for the fourth quarter of fiscal 2016 ended April 30, 2016.

-- Wallboard sales of $282.2 million increased 13.4%, compared to the fourth quarter of fiscal 2016. Wallboard unit volume grew 11.1% to 906 million square feet, driven by improved end market demand, price gains, and the positive contribution from acquisitions.

-- Ceilings sales of $87.5 million rose 11.9%, compared to the fourth quarter of fiscal 2016, mainly due to greater commercial activity, price gains and the positive impact from acquisitions.

-- Steel framing sales of $100.2 million grew 28.9%, compared to the fourth quarter of fiscal 2016, due to greater commercial activity, price gains as a result of higher industry steel prices and acquisitions.

-- Other product sales of $145.1 million were up 18.5%, compared to the fourth quarter of fiscal 2016, as a result of strong demand pull through, strategic initiatives, improved pricing and acquisitions.

Gross profit of $201.0 million grew 15.4%, compared to $174.2 million in the fourth quarter of fiscal 2016, mainly attributable to pricing discipline, improved purchasing opportunities and product mix. Gross margin was 32.7%, compared to 33.0% in the fourth quarter of fiscal 2016, largely due to the timing of favorable cost savings in the prior year quarter.

Net income of $14.3 million, or $0.34 per diluted share, increased $5.3 million, compared to $8.9 million, or $0.27 per diluted share, in the fourth quarter of fiscal 2016. Adjusted net income of $20.0 million, or $0.48 per diluted share, grew $2.6 million, compared to $17.4 million, or $0.53 per diluted share, in the fourth quarter of fiscal 2016.

Adjusted EBITDA of $52.1 million rose 19.5%, compared to $43.6 million in the fourth quarter of fiscal 2016. Adjusted EBITDA margin was 8.5% as a percentage of net sales for the fourth quarter of fiscal 2017, compared to 8.3% in the fourth quarter of fiscal 2016, largely reflecting increased profitability on higher net sales.

Fiscal Year 2017 Results

Net sales for the fiscal year ended April 30, 2017 increased 24.8% to $2.32 billion, compared to $1.86 billion for the fiscal year ended April 30, 2016, with double-digit growth across all product categories.

Gross profit of $758.6 million in fiscal 2017 increased 27.9%, compared to $593.2 million in fiscal 2016. Gross margin of 32.7% improved by 80 basis points, compared to 31.9% in the prior year, primarily driven by improved purchasing opportunities, pricing discipline and product mix.

Net income of $48.9 million in fiscal 2017, or $1.19 per diluted share, grew $36.3 million, compared to $12.6 million, or $0.38 per diluted share, in fiscal 2016. Adjusted net income of $69.9 million, or $1.70 per diluted share, increased $22.5 million, compared to $47.4 million, or $1.43 per diluted share, in the prior year.

Adjusted EBITDA of $188.2 million in fiscal 2017 grew 36.2%, compared to $138.2 million in fiscal 2016. Adjusted EBITDA margin was 8.1% as a percentage of net sales in fiscal 2017, compared to 7.4% in fiscal 2016, representing strong overall improvement in operating performance.

Capital Resources

At April 30, 2017, GMS had cash of $14.6 million and total debt of $595.0 million, as compared to cash of $19.1 million and total debt of $644.6 million at April 30, 2016.

Subsequent to the end of fiscal 2017, on June 7, 2017, the Company amended its First Lien Credit Agreement with new borrowings consisting of a $578 million term loan facility due in 2023. Borrowings under the new term loan bear interest at a floating rate based on LIBOR, with a 1.00% floor, plus 3.00%, representing a 50 basis point improvement compared to the previous term loan’s interest rate. Net proceeds from the new term loan were used to repay the Company’s previous first lien term loan of $478 million and approximately $94 million of loans under the asset based revolving credit facility as well as related expenses.

Acquisition Activity

In February 2017, the Company acquired the Hawaiian distribution assets of Grabber Construction Products, Inc., a highly regarded supplier of fasteners and drywall related products based in Honolulu, Hawaii.

The Company’s eight acquisitions completed during fiscal 2017 generated an aggregate of approximately $215.9 million in net sales for the twelve month period prior to the date of acquisition, and the earnings of the entities would have contributed approximately $24.3 million to Adjusted EBITDA for that period, including operating synergies.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the fourth quarter and fiscal year ended April 30, 2017 at 9:00 a.m. Eastern Time on June 29, 2017. Investors who wish to participate in the call should dial 877-719-9788 (domestic) or 719-457-2647 (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 July 29, 2017 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 1243163.

About GMS Inc.

Founded in 1971, GMS operates a network of more than 205 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, it presents Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and base business growth, which are not recognized financial measures under GAAP. GMS believes that Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin assist investors and analysts in comparing its operating performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s management believes Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and base business growth are helpful in highlighting trends in its operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which the Company operates and capital investments. In addition, the Company utilizes Adjusted EBITDA in certain calculations under its senior secured asset based revolving credit facility and its senior secured first lien term loan facility.

You are encouraged to evaluate each adjustment and the reasons GMS considers it appropriate for supplemental analysis. In addition, in evaluating Adjusted net income and Adjusted EBITDA, you should be aware that in the future, the Company may incur expenses similar to the adjustments in the presentation of Adjusted net income and Adjusted EBITDA. The Company’s presentation of Adjusted net income and Adjusted EBITDA should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. In addition, Adjusted net income and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in GMS’s 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 the Company’s 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 GMS operates, including the potential for growth in the commercial, residential and repair and remodeling, or R&R, markets, statements about its 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. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes 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 its control. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of the Company’s control, that may cause its 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 GMS distributes; 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 the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2017, and in its other periodic reports filed with the SEC. In addition, the statements in this release are made as of June 29, 2017. The Company undertakes 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 the Company’s views as of any date subsequent to June 29, 2017.

                                                                                                                              
                                                                                                           GMS Inc.
                                                                                             Consolidated Statements of Operations
                                                                               Three Months Ended April 30, 2017 and 2016 and Years Ended April
                                                                                                       30, 2017 and 2016
                                                                                (in thousands of dollars, except for share and per share data)
                                                                                                                                                                                                                                
                                                                                                       Three Months Ended                                                                    Year Ended
                                                                                                            April 30,                                                                         April 30,
                                                                                     ------------------------------------------------------                          ----------------------------------------------------------
                                                                                          2017                 2016                                     2017                   2016
                                                                                     --------------                          --------------                          ----------------                          ----------------
Net sales                                                                                $ 614,977                               $ 527,182                               $ 2,319,146                               $ 1,858,182
Cost of sales (exclusive of depreciation and amortization shown                            413,942                                 352,979                                 1,560,575                                 1,265,018
separately below)
                                                                                     ------------                            ------------                            --------------                            --------------
Gross profit                                                                               201,035                                 174,203                                   758,571                                   593,164
                                                                                     --------------                          --------------                          ----------------                          ----------------
Operating expenses:
  Selling, general and administrative                                                      152,962                                 133,231                                   585,078                                   470,035
  Depreciation and amortization                                                             17,761                                  16,879                                    69,240                                    64,215
                                                                                     --------------                          --------------                          ----------------                          ----------------
Total operating expenses                                                                   170,723                                 150,110                                   654,318                                   534,250
                                                                                     --------------                          --------------                          ----------------                          ----------------
Operating income                                                                            30,312                                  24,093                                   104,253                                    58,914
Other (expense) income:
  Interest expense                                                                          (7,198 )                                (9,428 )                                 (29,360 )                                 (37,418 )
  Change in fair value of financial instruments                                               (141 )                                   (19 )                                    (382 )                                     (19 )
  Write-off of debt discount and deferred financing fees                                         -                                       -                                    (7,103 )                                       -
  Other income, net                                                                          1,721                                   2,219                                     4,132                                     3,671
                                                                                     --------------                          --------------                          ----------------                          ----------------
Total other (expense), net                                                                  (5,618 )                                (7,228 )                                 (32,713 )                                 (33,766 )
                                                                                     --------------                          --------------                          ----------------                          ----------------
Income before taxes                                                                         24,694                                  16,865                                    71,540                                    25,148
Provision for (benefit from) income taxes                                                   10,422                                   7,925                                    22,654                                    12,584
                                                                                     --------------                          --------------                          ----------------                          ----------------
Net income                                                                               $  14,272                               $   8,940                               $    48,886                               $    12,564
                                                                                     ===== =======                           ===== =======                           ===== =========                           ===== =========
Weighted average shares outstanding:
  Basic                                                                                 40,955,632                              32,892,905                                40,260,405                                32,799,098
  Diluted                                                                               41,758,974                              33,155,140                                41,070,025                                33,125,242
Net income (loss) per share:
Basic                                                                                    $    0.35                               $    0.27                               $      1.21                               $      0.38
Diluted                                                                                  $    0.34                               $    0.27                               $      1.19                               $      0.38
                                                                                     ===== =======                           ===== =======                           ===== =========                           ===== =========
                                                                                                                                                                                                                                
                                                                                            
                                                                     GMS Inc.
                                                            Consolidated Balance Sheets
                                                              April 30, 2017 and 2016
                                                   (in thousands of dollars, except share data)
                                                                                                                                                    
                                                                                                April 30,                              April 30,
                                                                                                  2017                                   2016
                                                                                            ----------------                       ----------------
                                Assets
Current assets:
  Cash and cash equivalents                                                                     $    14,561                            $    19,072
  Trade accounts and notes receivable, net of allowances of $9,851 and                              328,988                                270,257
  $8,607, respectively
  Inventories, net                                                                                  200,234                                165,766
  Prepaid expenses and other current assets                                                          11,403                                 16,548
                                                                                            ----------------                       ----------------
Total current assets                                                                                555,186                                471,643
                                                                                            ----------------                       ----------------
Property and equipment, net                                                                         154,465                                153,260
Goodwill                                                                                            423,644                                386,306
Intangible assets, net                                                                              252,293                                221,790
Other assets                                                                                          7,677                                  7,815
                                                                                            ----------------                       ----------------
Total assets                                                                                    $ 1,393,265                            $ 1,240,814
                                                                                            ===== =========                        ===== =========
    Liabilities and Stockholders’ Equity
Current liabilities:
  Accounts payable                                                                                  102,688                                 91,500
  Accrued compensation and employee benefits                                                         58,393                                 51,680
  Other accrued expenses and current liabilities                                                     37,891                                 41,814
  Current portion of long-term debt                                                                  11,530                                  8,667
  Revolving credit facility                                                                               -                                 26,914
                                                                                            --------------                         --------------
Total current liabilities                                                                           210,502                                220,575
                                                                                            ----------------                       ----------------
Non-current liabilities:
  Long-term debt, less current portion                                                              583,390                                609,029
  Deferred income taxes, net                                                                         26,820                                 41,203
  Other liabilities                                                                                  35,371                                 33,600
  Liabilities to noncontrolling interest holders, less current portion                               22,576                                 25,247
                                                                                            ----------------                       ----------------
Total liabilities                                                                                   878,659                                929,654
                                                                                            ----------------                       ----------------
Commitments and contingencies
Stockholders’ equity:
  Common stock, par value $0.01 per share, authorized 500,000,000                                       410                                    329
  shares; 40,970,905 and 32,892,905 shares issued at April 30, 2017
  and April 30, 2016, respectively
  Preferred stock, par value $0.01 per share, authorized 50,000,000                                       -                                      -
  shares; 0 shares issued at April 30, 2017 and April 30, 2016,
  respectively
  Additional paid-in capital                                                                        488,459                                334,244
  Accumulated earnings (deficit)                                                                     26,621                                (22,265 )
  Accumulated other comprehensive (loss) income                                                        (884 )                               (1,148 )
                                                                                            ----------------                       ----------------
Total stockholders’ equity                                               514,606                                311,160
                                                                                            ----------------                       ----------------
Total liabilities and stockholders’ equity                           $ 1,393,265                            $ 1,240,814
                                                                                            ===== =========                        ===== =========
                                                                                                                                                    
                                                                                                                                
                                                                                                         GMS Inc.
                                                                                           Consolidated Statements of Cash Flows
                                                                             Three Months Ended April 30, 2017 and 2016 and Years Ended April
                                                                                                     30, 2017 and 2016
                                                                                                 (in thousands of dollars)
                                                                                                                                                                                                                           
                                                                                                           Three Months Ended                                                              Year Ended
                                                                                                                April 30,                                                                   April 30,
                                                                                           --------------------------------------------------                          ---------------------------------------------------
                                                                                               2017               2016                                  2017                2016
                                                                                           ------------                          ------------                          -------------                          ------------
Cash flows from operating activities:
Net Income                                                                                    $ 14,272                              $  8,940                               $ 48,886                              $ 12,564
Adjustments to reconcile net income to net cash provided by
operating activities:
   Depreciation and amortization of property and equipment                                       6,170                                 6,460                                 25,565                                26,667
   Accretion and amortization of debt discount and deferred financing                              651                                   878                                  9,793                                 3,438
   fees
   Amortization of intangible assets                                                            11,591                                10,419                                 43,675                                37,548
   Provision for losses on accounts and notes receivable                                           312                                (1,035 )                                 (122 )                              (1,032 )
   Provision for obsolescence of inventory                                                          (2 )                                  (3 )                                  425                                    80
   Decrease in fair value of contingent consideration                                           (1,096 )                                   -                                 (1,484 )                                   -
   Equity-based compensation                                                                     1,473                                   991                                  3,142                                 4,733
   Gain on sale or impairment of assets                                                            (94 )                                (721 )                                 (336 )                                (645 )
   Trade accounts and notes receivable                                                         (17,221 )                             (29,212 )                              (20,400 )                             (27,338 )
   Inventories                                                                                   7,318                                  (428 )                              (18,390 )                                (699 )
   Accounts payable                                                                             (4,081 )                              15,187                                 (3,763 )                               1,055
   Deferred income tax expense                                                                  (5,341 )                             (13,842 )                              (20,114 )                             (20,499 )
   Prepaid expenses and other assets                                                             1,013                                  (559 )                                 (412 )                              (4,682 )
   Accrued compensation and employee benefits                                                    7,497                                15,383                                  4,440                                 3,454
   Other accrued expenses and liabilities                                                          947                                   132                                    626                                 5,551
   Liabilities to noncontrolling interest holders                                                  225                                  (743 )                                1,133                                   446
   Income taxes                                                                                  6,734                                17,998                                 (5,956 )                               7,106
                                                                                           ------------                          ------------                          -------------                          ------------
   Cash provided by operating activities                                                        30,368                                29,845                                 66,708                                47,747
                                                                                           ------------                          ------------                          -------------                          ------------
Cash flows from investing activities:
   Purchases of property and equipment                                                          (4,183 )                              (3,697 )                              (11,083 )                              (7,692 )
   Proceeds from sale of assets                                                                    750                                 3,084                                  3,995                                 9,847
   Acquisitions of businesses, net of cash acquired                                             (4,452 )                             (31,929 )                             (150,428 )                            (120,195 )
                                                                                           ------------                          ------------                          -------------                          ------------
   Cash used in investing activities                                                            (7,885 )                             (32,542 )                             (157,516 )                            (118,040 )
                                                                                           ------------                          ------------                          -------------                          ------------
Cash flows from financing activities:
   Repayments on the revolving credit facility                                                (194,327 )                            (252,438 )                           (1,011,925 )                            (697,144 )
   Borrowings from the revolving credit facility                                               176,858                               269,257                              1,013,365                               782,104
   Payments of principal on long-term debt                                                      (1,203 )                                (975 )                               (4,584 )                              (3,931 )
   Principal repayments of capital lease obligations                                            (1,389 )                              (1,067 )                               (5,208 )                              (4,249 )
   Proceeds from issuance of common stock in initial public offering,                                -                                     -                                156,941                                     -
   net of underwriting discounts
   Repaymemt on term loan                                                                            -                                     -                               (160,000 )                                   -
   Proceeds from term loan amendment                                                                 -                                     -                                481,225                                     -
   Repayments on term loan amendment                                                                 -                                     -                               (381,225 )                                   -
   Debt issuance costs                                                                           1,192                                  (391 )                               (2,637 )                                (391 )
   Stock repurchases                                                                                 -                                     -                                      -                                (5,827 )
   Exercise of stock options                                                                       345                                     -                                    345                                 6,519
                                                                                           ----------                            ----------                            -----------                            ----------
   Cash provided by financing activities                                                       (18,524 )                              14,386                                 86,297                                77,081
                                                                                           ------------                          ------------                          -------------                          ------------
Increase (decrease) in cash and cash equivalents                                                 3,959                                11,689                                 (4,511 )                               6,788
Balance, beginning of period                                                                    10,602                                 7,383                                 19,072                                12,284
                                                                                           ------------                          ------------                          -------------                          ------------
Balance, end of period                                                                        $ 14,561                              $ 19,072                               $ 14,561                              $ 19,072
                                                                                           ==== ======                           ==== ======                           ===== ======                           ==== ======
Supplemental cash flow disclosures:
  Cash paid for income taxes                                                                  $  9,332                              $  3,817                               $ 49,163                              $ 26,067
  Cash paid for interest                                                                         6,405                                 9,688                                 26,443                                34,557
                                                                                                                                                                                                                           
                                                                                                                            
                                                                                                                                  GMS Inc.
                                                                                                                         Net Sales by Product Group
                                                                                                      Three Months Ended April 30, 2017 and 2016 and Years Ended April
                                                                                                                              30, 2017 and 2016
                                                                                                                          (in thousands of dollars)
                                                                                                                                                                                                                                                                              
                                                                          Three Months Ended April 30,                                                                                                        Year Ended April 30,
                                     ------------------------------------------------------------------------------------------------------                        ----------------------------------------------------------------------------------------------------------
                                                    % of                     % of                                          % of                       % of
                                         2017                          Total                            2016                          Total                             2017                           Total                             2016                           Total
                                     ------------                     -----                         ------------                     -----                         --------------                     -----                         --------------                     -----
Wallboard                              $ 282,150                       45.9 %                         $ 248,829                       47.2 %                         $ 1,058,400                       45.6 %                         $   870,952                       46.9 %
Ceilings                                  87,489                       14.2 %                            78,159                       14.8 %                             341,007                       14.7 %                             297,110                       16.0 %
Steel Framing                            100,220                       16.3 %                            77,769                       14.8 %                             374,151                       16.1 %                             281,340                       15.1 %
Other Products                           145,118                       23.6 %                           122,425                       23.2 %                             545,588                       23.5 %                             408,780                       22.0 %
                                     ------------                                                   ------------                                                   --------------                                                   --------------
Total Net Sales                        $ 614,977                                                      $ 527,182                                                      $ 2,319,146                                                      $ 1,858,182
                                     === =======                                                    === =======                                                    === =========                                                    === =========
                                                                                                                                                                                                                                                                              
                                                                                                                               
                                                                                                         GMS Inc.
                                                                                      Reconciliation of Net Income to Adjusted EBITDA
                                                                             Three Months Ended April 30, 2017 and 2016 and Years Ended April
                                                                                                     30, 2017 and 2016
                                                                                                 (in thousands of dollars)
                                                                                                                                                                                                                           
                                                                                                          Three Months Ended                                                               Year Ended
                                                                                                               April 30,                                                                    April 30,
                                                                                          --------------------------------------------------                          ----------------------------------------------------
                                                                                              2017               2016                                  2017                2016
                                                                                          ------------                          ------------                          -------------                          -------------
Net income                                                                                   $ 14,272                              $  8,940                              $  48,886                              $  12,564
Interest expense                                                                                7,198                                 9,428                                 36,463                                 37,418
Interest income                                                                                   (51 )                                (243 )                                 (152 )                                 (928 )
Income tax expense (benefit)                                                                   10,422                                 7,925                                 22,654                                 12,584
Depreciation expense                                                                            6,170                                 6,460                                 25,565                                 26,667
Amortization expense                                                                           11,591                                10,419                                 43,675                                 37,548
                                                                                          ------------                          ------------                          -------------                          -------------
EBITDA                                                                                       $ 49,602                              $ 42,929                              $ 177,091                              $ 125,853
                                                                                          ---- ------                           ---- ------                           ---- -------                           ---- -------
Stock appreciation rights expense (a)                                                        $    882                              $    365                              $     148                              $   1,988
Redeemable noncontrolling interests (b)                                                           457                                  (292 )                                3,536                                    880
Equity-based compensation (c)                                                                     553                                   610                                  2,534                                  2,699
Severance, other costs related to discontinued operations and closed                             (472 )                              (1,054 )                                 (157 )                                  379
branches, and certain other costs (d)
Transaction costs (acquisitions and other) (e)                                                   (798 )                                 939                                  2,249                                  3,751
Gain on disposal of assets                                                                        (94 )                                (720 )                                 (338 )                                 (645 )
Management fee to related party (f)                                                                 -                                   563                                    188                                  2,250
Effects of fair value adjustments to inventory (g)                                                170                                   223                                    946                                  1,009
Interest rate swap and cap mark-to-market (h)                                                     141                                    19                                    382                                     19
Secondary public offering (i)                                                                   1,385                                     -                                  1,385                                      -
Debt transaction costs (j)                                                                        265                                     -                                    265                                      -
                                                                                          ----------                            ----------                            -----------                            -----------
EBITDA add-backs                                                                                2,489                                   653                                 11,138                                 12,330
                                                                                          ------------                          ------------                          -------------                          -------------
Adjusted EBITDA                                                                              $ 52,091                              $ 43,582                              $ 188,229                              $ 138,183
                                                                                          ==== ======                           ==== ======                           ==== =======                           ==== =======
Adjusted EBITDA margin                                                                            8.5 %                                 8.3 %                                  8.1 %                                  7.4 %
                                                                                                                                                                                                                           
_________________________________
(a) Represents non-cash compensation expense related to stock
appreciation rights agreements
(b) Represents non-cash compensation expense related to changes in
the fair values of noncontrolling interests
(c) Represents non-cash equity-based compensation expense related to
the issuance of stock options
(d) Represents severance and other costs permitted in calculations
under the ABL Facility and the First Lien Facility
(e) Represents one-time costs related to the IPO and acquisitions
paid to third party advisors
(f) Represents management fees paid to AEA, which were discontinued
after the IPO
(g) Non-cash cost of sales impact of purchase accounting adjustments
to increase inventory to its estimated fair value
(h) Mark-to-market adjustments for certain financial instruments
(i) Represents costs paid to third party advisors related to the
secondary public offerings of our common stock in February and June
of 2017
(j) Represents costs paid to third party advisors related to debt
refinancing activities
 
                                                                                                                   
                                                                                                   GMS Inc.
                                                                              Reconciliation of Net Income to Adjusted Net Income
                                                                       Three Months Ended April 30, 2017 and 2016 and Years Ended April
                                                                                               30, 2017 and 2016
                                                                        (in thousands of dollars, except for share and per share data)
                                                                                                                                                                                                               
                                                                                             Three Months Ended                                                                Year Ended
                                                                                                  April 30,                                                                     April 30,
                                                                            ----------------------------------------------------                          ----------------------------------------------------
                                                                                2017                2016                                   2017                2016
                                                                            -------------                          -------------                          -------------                          -------------
Income before taxes                                                             $ 24,694                               $ 16,865                               $ 71,540                               $ 25,148
EBTIDA add-backs                                                                   2,489                                    653                                 11,138                                 12,330
Write-off of debt discount and deferred financing fees                                 -                                      -                                  7,103                                      -
Purchase accounting depreciation and amortization (1)                              7,254                                 12,492                                 30,518                                 44,099
                                                                            -------------                          -------------                          -------------                          -------------
Adjusted pre-tax income                                                           34,437                                 30,010                                120,299                                 81,577
Adjusted income tax expense                                                       14,429                                 12,574                                 50,405                                 34,181
                                                                            -------------                          -------------                          -------------                          -------------
Adjusted net income                                                             $ 20,008                               $ 17,436                               $ 69,894                               $ 47,396
                                                                            ===== ======                           ===== ======                           ===== ======                           ===== ======
Effective tax rate (2)                                                              41.9 %                                 41.9 %                                 41.9 %                                 41.9 %
                                                                                                                                                                                                               
Weighted average shares outstanding:
  Basic                                                                       40,955,632                             32,892,905                             40,260,405                             32,799,098
  Diluted                                                                     41,758,974                             33,155,140                             41,070,025                             33,125,242
Net income (loss) per share:
Basic                                                                           $   0.49                               $   0.53                               $   1.74                               $   1.45
Diluted                                                                         $   0.48                               $   0.53                               $   1.70                               $   1.43
                                                                            ===== ======                           ===== ======                           ===== ======                           ===== ======
                                                                                                                                                                                                               
____________________________
(1) Depreciation and amortization from the increase in value of
certain long-term assets associated with the April 1, 2014
acquisition of the predecessor company. Full year projected amounts
are $21.8 million and $15.6 million for FY18 and FY19, respectively.
(2) 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=20170629005545r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170629005545/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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