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November 2019
Investor Overview
2
Safe Harbor and Basis of Presentation
Forward-Looking Statement Safe Harbor - This presentation 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 and the economy generally, statements about growth potential across the Company’s
business, including from organic growth, M&A and greenfields, and the ability to deliver growth, profitability and value creation, and the anticipated benefits of the
Company’s cost reduction and operational improvements plan, including future SG&A savings, contained in this presentation are forward-looking statements. In addition,
forward looking statements may include statements regarding the Company’s expectations concerning its strategy, capital structure, financial performance and market
position. 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 and Canada; the activities of competitors; changes in significant operating expenses; changes in the
availability of capital and interest rates; adverse weather patterns or conditions; cybersecurity breaches and other disruptions to our IT systems; our recently announced
leadership succession plan; variations in the performance of the financial markets, including the credit markets; the possibility that the expected synergies and cost
savings and final impacts from the Titan acquisition will not be realized, or will not be realized within the expected time period; the risk that the GMS and Titan businesses
will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships and to accomplish other GMS
objectives; the risk of customer attrition; our ability to efficiently manage and control our costs and the success of our previously announced cost reduction plan; and other
factors described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K, and in its other periodic reports filed with the SEC. 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.
Use of Non-GAAP and Adjusted Financial Information - To supplement GAAP financial information, we use adjusted measures of operating results which are non-
GAAP measures. This non-GAAP adjusted financial information is provided as additional information for investors. These adjusted results exclude certain costs,
expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past financial performance and also our prospects for the future.
These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of our operating
performance by excluding non-recurring, infrequent or other non-cash charges that are not believed to be material to the ongoing performance of our business. The
presentation of this additional information is not meant to be considered in isolation or as a substitute for GAAP measures of net income, diluted earnings per share or net
cash provided by (used in) operating activities prepared in accordance with generally accepted accounting principles in the United States. Please see the Appendix to this
presentation for a further discussion on these non-GAAP measures and a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
3
GMS at a Glance
• Leading North American specialty distributor
of interior construction products:
- Wallboard, Ceilings, Steel Framing and Other Products
• More than 250 branches across US & Canada
• Founded in 1971
• One-stop-shop for the interior contractor with broad
product offering
• Critical link between suppliers and a highly fragmented
customer base
• North American scale combined with local expertise
• Diversified and balanced end-market exposure
• Over 5,800 employees embracing strong entrepreneurial
culture
• Multiple levers to drive growth
• NYSE: GMS (IPO in 2016)
• Market Cap: $1.2 billion
• Headquartered in Atlanta, GA
$1,570
$1,858
$2,319$2,511
$3,116
6.7%
7.4%
8.1% 7.9%
9.5%
FY-15 FY-16 FY-17 FY-18 FY-19
Net Sales Adj. EBTIDA Margin*
$ millions, April FYE
* Adj. EBITDA Margin is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP
measure, see Appendix.
4
A One-Stop-Shop for the Interior Contractor
GMS sells a complementary and
complete product offering to the
interior contractor who installs
wallboard, ceilings, steel framing
and ancillary products needed to
complete the job.
Other28%
Ceilings 15%
Steel Framing 16%
Wallboard 41%
Net Sales Breakdown (FY2019)
5
Product Offering
• Used to finish the interior walls and ceilings in residential, commercial and institutional construction projects
• Exterior wallboard
Wallboard Ceilings Steel Framing Other Products
• Suspended ceiling systems primarily comprised of mineral fiber, ceiling tile and grid
• Architectural specialty ceilings systems
• Steel framing products for interior walls
• Sold into commercial applications, typically as part of a package with wallboard, ceilings and other products
• Primarily consists of complementary interior construction products, including joint compound, tools and fasteners, safety products and EIFS (exterior insulation and finishing system)
• Various types of wallboard including: 1/2” standard (residential), 5/8” fire rated (commercial), foil backed, lead lined, moisture resistant, mold resistant and vinyl covered
• Acoustical ceiling tiles (standard and architectural specialty)
• Clips and hangers
• Covered fiberglass
• Ceiling tile grid
• Drywall steel
• Flat stock
• Plastering steel
• Structural framing
• Studs and track
• Adhesives
• EIFS
• Insulation
• Joint compound and plaster
• Safety equipment
• Tools and fasteners
Description
Products
6
GMS Serves as a Critical Link Between Suppliers and a
Highly Fragmented Customer Base
Wallboard
Ceilings
Residential / commercial
contractors
• Mostly independent operators
• Highly diversified; values support
and relationship with distributors
Large National Home Builders
Commercial contractors
• Value extensive product expertise
and complete product offering
Key Manufacturers Specialty Distributor Customers
• Specialty distributors lead the wallboard distribution channel
- Neither big boxes nor lumberyards want to make the investment in required capital-intensive specialized equipment, which limits
their addressable market
• Specialty distributors account for significant majority of ceiling distribution channel
- Ceilings manufacturers rely on the technical expertise of specialty distributors’ salesforces
• Suppliers have limited desire to serve customers directly, which puts distributors in a very strong position in the value chain
7
North American Platform With Local Presence
• GMS combines the benefits of North American scale with a local “go-to-market” strategy
• GMS has an integrated North American platform, but operates through over 50 local brands that are highly regarded in their markets
• GMS’s model generates significant economies of scale, while maintaining the high service levels, entrepreneurial culture, andthe customer intimacy of a local business
8
Differentiated Service Model Drives Market Leadership
Breadth of Product Line Differentiates GMS from Smaller
Competitors
• Ensures product availability
• Access to latest product innovations; significant customer for its top suppliers
• Leading ceilings lines with exclusivity in certain markets
Professional Salesforce Helps Customers Succeed in the Market Place
• Deep technical expertise and knowledge of local markets
• Key intermediary for suppliers in reaching the end customer
• Provides business development, bid support, expertise and sourcing
Differentiated
Service Model
Logistics Execution is Critical GivenWeight and Delivery Requirements
• Reputation for best-in-class delivery execution
• Strong processes, sequenced loading, coordinated delivery and leading technology and equipment
• Customized delivery plan and unique degree of quality control
• Network of Regional Safety Managers
• Strict and consistent safety procedures
• Safety protocol critical to larger commercial contractor customers
Superior Safety Track Record isHighly Valued by Customers
GMS believes it sets the industry standard in product availability, customer support, delivery execution and safety; this
differentiated service model has driven attractive gross profit margins and is a competitive advantage vs. smaller
competitors
9
Diversified and Balanced End Market Exposure
Residential ~45%
Commercial ~55%
Net Sales Breakdown (FY2019) • GMS’s business is diversified across the spectrum of construction end markets:
• Residential
• Single-Family New
• Multi-Family New
• R&R
• Commercial
• New Construction
• R&R
10
Entrepreneurial Culture and Vision, Mission & Values Drive Execution
GMS’ unique culture combines a results-driven environment with a
highly entrepreneurial, self starter attitude, guided by a strong Vision,
Mission & Core Values.
VISION
We will be the premier distributor in every market we serve through embracing
our unique culture and professional humility.
MISSION
We create opportunities, build significant relationships and deliver solutions.
CORE VALUES
AT GMS –
• Our people have the independence and authority to make a difference.
• We invest in relationships and every person is important.
• Our highest priority is serving others.
• We passionately pursue a safe work environment along with a relentless focus
on operational excellence.
• We believe you can never go wrong doing the right thing.
11
Proven Track Record of Growth
$87$106
$138
$188
$199
$296
6.4% 6.7%7.4%
8.1% 7.9%
9.5%
0%
5%
10%
15%
20%
$0
$40
$80
$120
$160
$200
$240
$280
FY-14 FY-15 FY-16 FY-17 FY 18 FY 19
Adj. EBITDA % Margin
$1,353$1,570
$1,858
$2,319$2,511
$3,116
16.4% 16.0%18.3%
24.8%
8.3%
24.1%
0%
10%
20%
30%
40%
50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
FY-14 FY-15 FY-16 FY-17 FY-18 FY-19
Revenue % Growth vs. Prior Yr
Net Sales ($ mm) Growth (% )
FY Net Sales
Adj. EBITDA ($ mm) Adj. EBITDA Margin (%)
FY Adjusted EBITDA *
* Adj. EBITDA is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP
measure, see Appendix.
12
$34 $40$57
$68
$17532.1%29.0% 30.3%
34.2%
59.1%
0%
10%
20%
30%
40%
50%
60%
70%
$0
$40
$80
$120
$160
$200
FY-15 FY-16 FY-17 FY 18 FY 19
Free Cash Flow FCF as % of AEBITDA
Free Cash Flow ($ mm) FCF as % of Adj. EBITDA* (%)
Free Cash Flow*
Strong Free Cash Flow* Generation
* Free Cash Flow and Adj. EBITDA are non-GAAP financial measures. For a reconciliation of Free Cash Flow to Cash from Operating Activity and Adj.
EBITDA to Net Income (loss), the most directly comparable GAAP measures, see Appendix.
• FY 19 included ~$35 million increase in accounts payable not expected to recur: target Free Cash Flow* as % of
Adj. EBITDA* is 40 – 45% in FY 2020
• Priorities for Free Cash Flow* include debt repayment, selective acquisitions and opportunistic share repurchases
13
Multiple Levers to Drive Growth
(5)
• Well Diversified End Markets with
Significant Room for Continued
Expansion
Market
Growth
• Operating leverage
• Operational excellence
Margin
Expansion
Organic
Growth
Strategic
Acquisitions
• Strategic Acquisition Opportunities in
Highly Fragmented Market
• Expanding in New and Existing Markets
to Enhance Strategic Capabilities
• Market Share Gains
• Greenfield Branch Openings
• Capitalize on “Other Products”
Growth Opportunities
* Adj. EBITDA is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP
measure, see Appendix.
5 Year CAGR through FY 2019:
Net Sales - 18.2%
Adj. EBITDA* - 27.7%
14
GMS has a significant opportunity to expand its geographic footprint in under-served and under-penetrated markets
through accretive greenfields and acquisitions
• GMS has a
demonstrated
history of successful
expansion through
greenfields and
acquisitions
• GMS has limited or
no presence in just
under 35%(1) of the
top 100 MSAs in the
U.S. and 50% of the
top 10 CMAs in
Canada
• Significant
opportunity for share
gains in new and
existing markets
over time
• Despite industry
consolidation, large
portion of the market
is still comprised of
local, independents;
maintain active
dialogue with
several potential
targets
(1) GMS currently has limited or no branches in the areas identified as an MSA with limited or no GMS presence. There can be no assurance that GMS will be able to expand into any of these areas. Additionally, in
the event GMS takes measures to expand into these areas, there can be no assurance that GMS will be successful, and any such expansion will be subject to several risks including those discussed under the
heading “Risk Factors” in the Registration Statement that the Company has filed with the SEC for the offering to which this presentation relates.
Central Midwest
Gulf Coast
Map Legend
- GMS Location as of Apr-19
- Targeted Areas
Opportunity to Further Expand
15
Expansion Strategy
GMS continues to focus on expansion of the platform via accretive acquisitions and greenfields
Acquisition & Greenfield Strategy Case Study: New England Gypsum Supply
Evaluating Targeted Markets
◼ Focus on large metro areas where GMS has limited and/or
underpenetrated footprint
◼ Leverage GMS platform to extend operations into large suburban
areas with proximity to metro hubs
◼ Evaluate opportunities to gain further scale and market penetration in
areas where GMS already has an established presence
Acquisition Strategy:
◼ Dedicated M&A team
◼ Leading capabilities in targeted markets
◼ Fit GMS culture and platform
◼ Attractive purchase price multiples with realization of scale benefits
and identified cost synergies
Greenfield Strategy:
◼ Organic expansion in targeted markets with favorable dynamics for
further GMS presence and high strategic value
◼ Emphasis on incremental revenue generation; ability to leverage
existing cost base for profitable expansion
◼ Have been able to expand market coverage of New England through
a combination of both acquisition and greenfield activity
◼ Original acquisition of Robert N. Karpp company in Feb-16
established initial GMS position in New England with a significant
presence in the Boston metro area
◼ Subsequent greenfields aid in penetration of the metro area as well as
expansion of the platform to additional surrounding markets
leveraging scale of the platform in Boston
Feb-16: Original Acquisition Robert N. Karpp Company
1
Jun-17: Greenfield Expansion in Wilmington, MA
2
Feb-18: Greenfield Expansion in Hartford, CT
3
May-19: Greenfield Expansion in Portland, ME
4
Date
Expansion
Type Acquisition/Greenfield Locations Strategic Rationale
Jun-19 Acquisition▪ San Antonio, TX (2)
▪ La Feria, TX
▪ Consolidates position in San Antonio and the Rio Grande Valley; adds
location serving Brownsville & McAllen metro areas
▪ Armstrong ceilings line in all three locations
▪ Joins existing Lone Star Materials platform (3 locations in South Texas)
Mar-19 Greenfield Carrollton, TX ▪ Carrollton, TX
▪ Additional market density in Dallas/Fort-Worth metro area
▪ Highly complementary footprint relative to existing platform, adds much
needed market coverage in northern Dallas
Mar-19 Acquisition▪ LaPlace, LA
▪ Baton Rouge, LA
▪ Expands Gulf Coast presence with first locations in New Orleans and
Baton Rouge markets
▪ Joins established Capitol Materials, Inc. platform (19 locations in
Georgia, Alabama and Florida Panhandle)
Aug-18 Greenfield Philadelphia, PA ▪ Philadelphia, PA
▪ Additional market density in the Philadelphia metro area
▪ Adds downtown location complementary to existing facility located in
King of Prussia, PA
Aug-18 Acquisition ▪ Paramount, CA
▪ Expands Southern California presence with location in Los Angeles
metro area; 70+ year operating history in the market
▪ Joins established J&B Materials platform (7 locations in California and
Hawaii)
Jun-18 Acquisition
▪ Ontario (5)
▪ Manitoba (1)
▪ Saskatchewan (1)
▪ Alberta (7)
▪ British Columbia (16)
▪ Acquisition of largest player in Canada
▪ Consolidated platform with 30 locations spanning 5 Canadian
Provinces
16
Track Record of Successful Expansion
GMS has a long history of successful platform expansion including the completion of over 60+ acquisitions and
greenfields since May 1, 2014
◼ Since May 1, 2014,
GMS has acquired 30
companies
representing a total of
95 locations
◼ Opened additional
30+ organic
greenfield locations
over the same period,
complementing
acquisition strategy
◼ All U.S. locations
fully-integrated into
GMS platform;
dedicated integration
supporting platform
expansion
◼ Continue to evaluate
strong pipeline of
strategic acquisition
and greenfield
opportunities
Select Recent GMS Expansion
17
Diversified End Markets: Business Mix Across Commercial
and Residential as well as New Construction and R&R
Source: Dodge Data & Analytics Source: JCHS
Source: Census Bureau; * estimates average projections of Fannie Mae, Freddie Mac, MBA, and NAHB; **Reflects average from 1959 to 2018.
US Single-Family Housing Starts (‘000’s) US Multi-Family Housing Starts (‘000’s)
Non-Residential Building ($ Billions)Leading Indicator of Remodeling Activity ($ Billions)
18
Operating Leverage Opportunity
◼ North American scale, local market leadership, differentiated operating platform and value-added services
drive industry-leading margins
◼ Strategic cost reduction plan implemented in May 2018 generated $20 million in annualized savings
◼ Positioned to benefit from operating leverage and operational excellence initiatives
$2,511
$2,647
$2,833
$2,972
$3,116
24.8%
24.3%
23.5%
23.1%23.0%
22%
23%
23%
24%
24%
25%
25%
$2,000
$2,200
$2,400
$2,600
$2,800
$3,000
$3,200
LTM Q4 18 LTM Q1 19 LTM Q2 19 LTM Q3 19 LTM Q4 19
Revenue Adjusted SG&A %*
* Adjusted SG&A is a non-GAAP financial measure. For a reconciliation of Adjusted SG&A to SG&A, the most directly comparable GAAP measure,
see Appendix p..
$ MM
19
Attractive Capital Structure
Net Debt / LTM PF Adjusted EBITDA*
4.9x
4.3x
2.9x 2.8x
4.2x
3.8x 3.8x3.6x 3.7
4/30/15 4/30/16 4/30/17 4/30/18 7/31/18 10/31/01 1/31/19 4/30/19 7/31/19
$42 $41
$81
$31$22
$940
2020 2021 2022 2023 2024 Thereafter
Debt** Maturity Schedule as of FYE 2019
($ mm)
*See appendix for a reconciliation of LTM PF Adjusted EBITDA **Debt includes First Lien Term Loan, ABL Facility, Capital Leases & Installment Notes
• Substantial liquidity, with $47 million of cash on hand and an additional $314 million available under
our ABL Facilities as of 4/30/2019
• First Lien Term Loan at L+275 (>80% of total long term debt) does not mature until 2025
• In order to hedge against potential future interest rate volatility, entered into an interest rate swap
agreement in February 2019. This agreement effectively provides a fixed rate on $500 million of our
first lien term debt
• Moody’s and Standard & Poors current ratings of B1 and BB- respectively
20
Q1 Fiscal 2020 Performance
Net Sales & Mix
$778.1
$847.2
$0
$300
$600
$900
Fiscal Q1 2019 Fiscal Q1 2020
41%
15%
16%
28%40%
15%
16%
29%▪ Organic net sales growth of 3.4%
▪ Wallboard: +3.5% organic (Volume ~+4%/Price <-1%)
▪ Ceilings: +8.3% organic (Volume ~+3%/Price ~+5%)
▪ Steel: -0.8% organic (Volume ~+5%/ Price & Mix ~-6%)
▪ Other: +3.1% organic
Gross Profit & Margin
Net Sales ($ mm)
$244.8$273.7
31.5%32.3%
20.0%20.5%21.0%21.5%22.0%22.5%23.0%23.5%24.0%24.5%25.0%25.5%26.0%26.5%27.0%27.5%28.0%28.5%29.0%29.5%30.0%30.5%31.0%31.5%32.0%32.5%33.0%
$0
$50
$100
$150
$200
$250
$300
Fiscal Q1 2019 Fiscal Q1 2020
Gross Profit Gross Margin
▪ Gross Profit up 11.8% as a result of higher sales vs Q1 FY
2019, both organically and from acquisitions, as well as $4.1
million of non-cash purchase accounting adjustments
recorded in Q1 2019
▪ Gross margin of 32.3% increased 80 bps from 31.5% Q1 FY
2019 due to net favorable price-cost dynamics, Titan
purchasing synergies, and the prior year purchase accounting
adjustments
As of Q1 2020, organic net sales growth calculation modified to exclude net sales of
acquired businesses until first anniversary of acquisition date and impact of foreign
currency translation (see page 13 for presentation of prior years’ organic net sales
growth under new methodology).
21
SG&A and Adjusted SG&A (1)
Q1 Fiscal 2020 Performance
▪ Reported SG&A was $194.6 million (23.0% of sales) in Q1 2020
and $185.4 million (23.8% of sales) in Q1 2019
▪ Adjusted SG&A was $191.1 million (22.6% of sales) in Q1 2020 and
$174.1 million (22.4% of sales) in Q1 2019
▪ Adjusted SG&A as % of sales increased by 20 bps year over year
as a result of investments in business initiatives, reduced operating
leverage in Canada and inflationary cost pressures including those
resulting from adverse weather conditions. These impacts were
partially offset by increased cost efficiencies resulting from the
Company’s cost reduction initiatives.
Net Income, Adjusted Net Income & Adjusted EBITDA (1)
▪ Reported net income was $24.8 million in Q1 2020 and $8.7 million
in Q1 2019
▪ Adjusted net income was $37.5 million in Q1 2020 and $35.2 million
in Q1 2019
▪ Adjusted EBITDA of $83.6 million up 11.0% year over year
▪ Adjusted EBITDA margin up 20 bps year over year
Adj. SG&A ($ mm)
Adj. EBITDA ($ mm)
7.9%
9.4%
(1) For a reconciliation of Adjusted SG&A, Adjusted EBITDA, Adjusted Net Income and Adjusted EBITDA Margin to the most directly comparable GAAP metrics, see Appendix.
$174.1 $191.1
22.4%22.6%
20.0%
20.5%
21.0%
21.5%
22.0%
22.5%
23.0%
$0
$50
$100
$150
$200
Fiscal Q1 2019 Fiscal Q1 2020
Adj. SG&A Adj. SG&A %
$75.3 $83.6
9.7% 9.9%
5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%9.5%10.0%10.5%
$0
$50
$100
Fiscal Q1 2019 Fiscal Q1 2020
Adj. EBITDA Adj. EBITDA Margin
22
Expand Share in Core
Products
Grow Other Products
Platform Expansion
Capitalize on existing fixed investment in
locations and equipment where we’re
underpenetrated or below expected share
in core products
Grow select “Other Product” opportunities
outside of core products to diversify and
profitably expand our product offering
Expand the platform through accretive
acquisition and greenfield opportunities,
balanced with debt reduction priorities
Strategic Growth Priorities
Profitability/ProductivityLeverage our scale and employ
technology and best practices to deliver
further margin expansion
23
Investment Rationale
• North American market leader in specialty distribution of interior construction products
• Significant scale combined with local expertise
• Differentiated service model drives market leadership
• Multiple levers to drive above-market growth
• Capitalizing on large, diverse end markets poised for continued long-term growth
• Entrepreneurial culture with dedicated employees and experienced leadership driving
superior execution
• Proven track record of growth and cash generation
• Attractive capital structure and balanced approach to capital allocation
24
Appendix
25
Net Income (Loss) to Adjusted EBITDA
( $ in 000s) 2019 2018 2017 2016 2015 2014
(Unaudited)
Net Income (loss) 56,002$ 62,971$ 48,886$ $ 12,564 $ (11,697) $ (219,814)
Add: Interest Expense 73,677 31,395 29,360 37,418 36,396 7,180
Add: Write off of debt discount and deferred financing fees - 74 7,103 - - -
Less: Interest Income (66) (177) (152) (928) (1,010) (922)
Add: Income Tax Expense 14,039 20,883 22,654 12,584 (6,626) (240)
Add: Change in fair value of mandatorily redeemable shares - - - - - 200,004
Add: Depreciation Expense 46,456 24,075 25,565 26,667 32,208 16,042
Add: Amortization Expense 71,003 41,455 43,675 37,548 31,957 2,556
EBITDA 261,111$ 180,676$ 177,091$ $ 125,853 $ 81,228 $ 4,806
Adjustments
Executive Compensation (A) - - - - - 2,447
Stock appreciation rights expense (B) 2,730 2,318 148 1,988 2,268 1,368
Redeemable noncontrolling interests (C) 1,188 1,868 3,536 880 1,859 3,028
Equity-based compensation (D) 3,906 1,695 2,534 2,699 6,455 28
AEA transaction related costs (E) - - - - 837 67,964
Severance and other permitted costs (F) 8,152 581 (157) 379 413 -
Transaction costs (acquisition and other) (G) 7,858 3,370 2,249 3,751 1,891 -
Gain on disposal of assets (525) (509) (338) (645) 1,089 (864)
AEA management fee (H) - - 188 2,250 2,250 188
Effects of fair value adjustments to inventory (I) 4,176 324 946 1,009 5,012 8,289
Change in fair value of financial instruments (J) 6,395 6,125 382 - - (192)
Secondary public offerings (K) - 1,525 1,385 19 2,494 -
Debt transaction costs (L) 678 1,285 265 - - -
Total Add-Backs 34,558$ 18,582$ 11,138$ 12,330$ 24,568$ 82,256$
Adjusted EBITDA 295,669$ 199,258$ 188,229$ 138,183$ 105,796$ 87,062$
LTM Sales 3,116,033 2,511,469 2,319,046 1,858,177 1,570,085 1,353,340
EBITDA margin 9.5% 7.9% 8.1% 7.4% 6.7% 6.4%
Reconciliation Commentary
A. Represents non-cash expense related to
stock appreciation rights agreements
B. Represents non-cash compensation
expense related to changes in the values of
noncontrolling interests
C. Represents non-cash equity-based
compensation expense related to the
issuance of share-based awards
D. Represents severance expenses and other
costs permitted in calculations under the
ABL Facility and the First Lien Facility
E. Represents one-time costs related to our
initial public offering and acquisitions paid to
third party advisors as well as costs related
to the retirement of corporate stock
appreciation rights
F. Represents management fees paid to AEA,
which were discontinued after the IPO
G. Represents the non-cash cost of sales
impact of purchase accounting adjustments
to increase inventory to its estimated fair
value
H. Represents mark-to-market adjustments for
derivative financial instruments
I. Represents one-time costs related to our
secondary offerings paid to third party
advisors
J. Represents expenses paid to third party
advisors related to debt refinancing activities
K. Pro forma impact of earnings from
acquisitions from the beginning of the LTM
period to the date of acquisition, including
synergies
26
Historical Cash Flows
($ in millions)
(Unaudited) FY15 FY16 FY17 FY18 FY19
Net income $ (11.7) $ 12.6 $ 48.9 $ 63.0 $ 56.0
Non-cash changes & other changes 79.6 62.2 62.5 63.4 119.3
Changes in primary working capital components:
Trade accounts and notes receivable (11.6) (27.3) (20.4) (11.8) (13.7)
Inventories (4.6) (0.7) (19.3) (34.8) 5.2
Accounts payable (3.7) 1.1 (3.8) 11.4 26.8
Cash provided by (used in) operating activities 48.0 47.7 67.9 91.2 193.6
Purchases of property and equipment (13.9) (7.7) (11.1) (23.7) (18.8)
Proceeds from sale of assets 3.8 9.8 4.0 2.9 1.2
Purchase of financial instruments (4.6) - - - -
Acquisitions of businesses, net of cash acquired (67.7) (120.2) (150.4) (28.3) (583.1)
Cash (used in) investing activities (82.5) (118.0) (157.5) (49.2) (600.7)
Cash provided by (used in) financing activities 14.1 77.1 85.1 (20.2) 419.0
Effect of exchange rates - (1.0)
Increase in cash and cash equivalents (20.4) 6.8 (4.5) 21.8 10.9
Balance, beginning of period 32.7 12.3 19.1 14.6 36.4
Balance, end of period $ 12.3 $ 19.1 $ 14.6 $ 36.4 $ 47.3
Supplemental cash flow disclosures:
Cash paid for income taxes $ 16.1 $ 26.1 $ 49.2 $ 39.0 $ 19.4
Cash paid for interest $ 31.7 $ 34.6 $ 26.4 $ 28.6 $ 66.4
Cash provided by (used in) operating activities $ 48.0 $ 47.7 $ 67.9 $ 91.2 $ 193.6
Purchases of property and equipment (13.9) (7.7) (11.1) (23.7) (18.8)
Free cash flow (1)
34.1 40.1 56.8 67.4 174.8
27
Reported SG&A to Adjusted SG&A
Reconciliation Commentary
A. Represents non-cash expense related to
stock appreciation rights agreements
B. Represents non-cash compensation
expense related to changes in the values
of noncontrolling interests
C. Represents non-cash equity-based
compensation expense related to the
issuance of share-based awards
D. Represents severance expenses and
other costs permitted in calculations under
the ABL Facility and the First Lien Facility
E. Represents one-time costs related to
acquisitions paid to third parties.
F. Represents costs paid to third-party
advisors related to the secondary public
offering of our common stock
G. Represents expenses paid to third-party
advisors related to debt refinancing
activities
H. Represents SG&A incurred by any
branches that were acquired in the current
fiscal year, prior fiscal year and three
months prior to the start of the prior fiscal
year
(Unaudited) LTM 4Q18 LTM 1Q19 LTM 2Q19 LTM 3Q19 LTM 4Q19
($ in millions)
LTM Reported SG&A 633.9$ 663.2$ 688.6$ 710.5$ 739.5$
LTM Adjustments
Stock appreciation rights (expense) benefit (A) (2.3) (2.1) (2.1) (1.9) (2.7)
Redeemable noncontrolling interests (B) (1.9) (1.5) (1.7) (1.3) (1.2)
Equity-based compensation (C) (1.7) (1.6) (2.3) (3.1) (3.9)
Severance and other permitted costs (D) (0.6) (5.2) (6.0) (6.2) (8.2)
Transaction costs (acquisition and other) (E) (3.4) (8.0) (8.7) (9.7) (7.9)
Gain (loss) on disposal of assets 0.5 0.2 0.2 0.3 0.5
Secondary Public Offering (F) (1.5) (0.9) (0.9) - -
Debt Related Costs (G) (1.3) (1.2) (1.2) (1.2) (0.7)
LTM Adjusted SG&A 621.7$ 643.0$ 666.0$ 687.5$ 715.5$
LTM Revenue 2,511.5$ 2,647.4$ 2,833.3$ 2,971.7$ 3,116.1$
LTM Adjusted SG&A as % of LTM Sales 24.8% 24.3% 23.5% 23.1% 23.0%
28
Net Income (Loss) to Pro Forma Adjusted EBITDA
Reconciliation Commentary
A. Represents non-cash compensation expenses
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 share-based
awards
D. Represents non-recurring expenses related
specifically to the AEA acquisition of GMS
E. Represents severance and other costs permitted in
calculations under the ABL Facility and the First
Lien Facility
F. Represents one-time costs related to our initial
public offering and acquisitions (including the
Acquisition) paid to third party advisors, including
fees to financial advisors, accountants, attorneys
and other professionals as well as costs related to
the retirement of corporate stock appreciation rights.
G. Represents management fees paid to AEA, which
were discontinued after the IPO
H. Represents the non-cash cost of sales impact of
purchase accounting adjustments to increase
inventory to its estimated fair value
I. Represents mark-to-market adjustments for certain
financial instruments
J. Represents costs paid to third party advisors related
to the secondary public offerings of our common
stock
K. Represents costs paid to third party advisors related
to debt refinancing activities
L. Pro forma impact of earnings from acquisitions from
the beginning of the LTM period to the date of
acquisition, including synergies
M. Represents the favorable impact to Adjusted
EBITDA related to the amendment of existing GMS
equipment operating leases to capital leases
LTM LTM LTM LTM LTM LTM LTM LTM
( $ in 000s) 4/30/2019 1/31/2019 10/31/2018 7/31/2018 4/30/2018 4/30/2017 4/30/2016 4/30/2015
(Unaudited)
Net Income (loss) 56,002$ 49,296$ 63,167$ 56,278$ 62,971$ 48,886$ $ 12,564 $ (11,697)
Add: Interest Expense 73,677 63,003 51,348 40,083 31,395 29,360 37,418 36,396
Add: Write off of debt discount and deferred financing fees - - - - 74 7,103 - -
Less: Interest Income (66) (127) (161) (390) (177) (152) (928) (1,010)
Add: Income Tax Expense 14,039 17,665 11,735 13,659 20,883 22,654 12,584 (6,626)
Add: Depreciation Expense 46,456 40,121 34,211 28,696 24,075 25,565 26,667 32,208
Add: Amortization Expense 71,003 63,190 55,370 46,811 41,455 43,675 37,548 31,957
EBITDA 261,111$ 233,148$ 215,670$ 185,137$ 180,676$ 177,091$ $ 125,853 $ 81,228
Adjustments
Stock appreciation rights expense (A) 2,730 1,880 2,069 2,062 2,318 148 1,988 2,268
Redeemable noncontrolling interests (B) 1,188 1,276 1,651 1,533 1,868 3,536 880 1,859
Equity-based compensation (C) 3,906 3,056 2,345 1,626 1,695 2,534 2,699 6,455
AEA transaction related costs (D) - - - - - - - 837
Severance and other permitted costs (E) 8,152 6,203 5,981 5,212 581 (157) 379 413
Transaction costs (acquisition and other) (F) 7,858 9,709 8,718 7,964 3,370 2,249 3,751 1,891
Gain (loss) on disposal of assets (525) (273) (206) (240) (509) (338) (645) 1,089
AEA management fee (G) - - - - - 188 2,250 2,250
Effects of fair value adjustments to inventory (H) 4,176 4,177 4,266 4,453 324 946 1,009 5,012
Change in fair value of financial instruments (I) 6,395 11,810 12,086 11,948 6,125 382 - 2,494
Secondary public offerings (J) - - 894 894 1,525 1,385 19 -
Debt transaction costs (K) 678 1,205 1,205 1,189 1,285 265 - -
Total Add-Backs 34,558$ 39,043$ 39,009$ 36,642$ 18,582$ 11,138$ 12,330$ 24,568$
Adjusted EBITDA 295,669$ 272,191$ 254,679$ 221,779$ 199,258$ 188,229$ 138,183$ 105,796$
Contributions from acquisitions (L) 6,717 26,990 42,827 64,321 1,280 9,500 12,093 8,064
Pro Forma Adjusted EBITDA with Acquisitions 302,386$ 299,181$ 297,506$ 286,100$ 200,538$ 197,729$ 150,276$ 113,860$
Conversion of GMS Operating Leases (M) - 6,151 12,039 17,926 - - - -
Pro Forma Adjusted EBITDA 302,386$ 305,332$ 309,545$ 304,026$ 200,538$ 197,729$ 150,276$ 113,860$
29
Net Income to Pro Forma Adjusted EBITDA
Reconciliation Commentary
A. Represents non-cash expense related to
stock appreciation rights agreements
B. Represents non-cash compensation
expense related to changes in the values of
noncontrolling interests
C. Represents non-cash equity-based
compensation expense related to the
issuance of share-based awards
D. Represents severance expenses and other
costs permitted in calculations under the
ABL Facility and the First Lien Facility
E. Represents one-time costs related to our
initial public offering and acquisitions paid to
third party advisors as well as costs related
to the retirement of corporate stock
appreciation rights
F. Represents management fees paid to AEA,
which were discontinued after the IPO
G. Represents the non-cash cost of sales
impact of purchase accounting adjustments
to increase inventory to its estimated fair
value
H. Represents mark-to-market adjustments for
derivative financial instruments
I. Represents one-time costs related to our
secondary offerings paid to third party
advisors
J. Represents expenses paid to third party
advisors related to debt refinancing activities
K. Pro forma impact of earnings from
acquisitions from the beginning of the LTM
period to the date of acquisition, including
synergies
( $ in 000s) 1Q20 LTM 2019 2018 2017 2016
(Unaudited)
Net Income 72,172$ 56,002$ 62,971$ 48,886$ $ 12,564
Add: Interest Expense 75,766 73,677 31,395 29,360 37,418
Add: Write off of debt discount and deferred financing fees - - 74 7,103 -
Less: Interest Income 158 (66) (177) (152) (928)
Add: Income Tax Expense 18,793 14,039 20,883 22,654 12,584
Add: Depreciation Expense 48,268 46,456 24,075 25,565 26,667
Add: Amortization Expense 72,144 71,003 41,455 43,675 37,548
EBITDA 287,301$ 261,111$ 180,676$ 177,091$ $ 125,853
Adjustments
Stock appreciation rights expense (A) 2,456 2,730 2,318 148 1,988
Redeemable noncontrolling interests (B) 1,319 1,188 1,868 3,536 880
Equity-based compensation (C) 4,897 3,906 1,695 2,534 2,699
Severance and other permitted costs (D) 3,870 8,152 581 (157) 379
Transaction costs (acquisition and other) (E) 4,077 7,858 3,370 2,249 3,751
Gain on disposal of assets (560) (525) (509) (338) (645)
AEA management fee (F) - - - 188 2,250
Effects of fair value adjustments to inventory (G) 198 4,176 324 946 1,009
Change in fair value of financial instruments (H) 376 6,395 6,125 382 -
Secondary public offerings (I) - - 1,525 1,385 19
Debt transaction costs (J) 51 678 1,285 265 -
Total Add-Backs 16,684$ 34,558$ 18,582$ 11,138$ 12,330$
Adjusted EBITDA (as reported) 303,985$ 295,669$ 199,258$ 188,229$ 138,183$
Contributions from acquisitions (K) 1,293 6,717 1,280 9,500 12,093
Pro Forma Adjusted EBITDA 305,278$ 302,386$ 200,538$ 197,729$ 150,276$
30
Q1 Net Sales
(1) Organic net sales growth calculation modified to exclude net sales of acquired businesses until first anniversary of acquisition date and impact of foreign currency translation.
($ in millions)
(Unaudited) FY19 FY20 Reported Organic (1)
Organic (1) 778.1$ 804.2$
Acquisitions - 43.8
Fx Impact - (0.8)
Total Net Sales 778.1$ 847.2$ 8.9% 3.4%
Wallboard 317.7$ 341.6$ 7.5% 3.5%
Ceilings 115.9 129.1 11.4% 8.3%
Steel Framing 129.1 131.8 2.1% (0.8%)
Other Products 215.4 244.6 13.6% 3.1%
Total Net Sales 778.1$ 847.2$ 8.9% 3.4%
Fiscal Q1 Variance
31
Prior Period Organic Net Sales Calculation – Prior and
Current Method
(1) Prior Method: Through FY 2019, organic net sales growth calculation excluded net sales of businesses acquired in the current fiscal year, prior fiscal year and three months prior to the start of the prior fiscal year.
(2) Current Method: At beginning of FY 2020, organic net sales growth calculation modified to exclude net sales of acquired businesses until first anniversary of acquisition date and impact of foreign currency translation.
($ in millions)
(Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
Prior Method (1)
Prior Period
Reported 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6
Acq 6.0 30.8 52.0 56.9 145.7 - 6.1 6.5 8.5 21.1
Organic 543.8 561.1 510.5 558.1 2,173.5 642.2 641.9 579.0 627.4 2,490.4
Current Period
Reported 642.2 648.0 585.5 635.9 2,511.6 778.1 833.8 723.9 780.2 3,116.1
Acq 56.0 58.4 59.1 66.5 239.9 96.9 136.0 106.7 109.2 448.8
Organic 586.2 589.6 526.4 569.4 2,271.7 681.3 697.8 617.2 671.0 2,667.3
Organic Growth % 7.8% 5.1% 2.9% 2.0% 4.5% 6.1% 8.7% 6.6% 7.0% 7.1%
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
Current Method (2)
Prior Period
Reported 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6
Acq - - - - - - - - - -
Organic 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6
Current Period
Reported 642.2 648.0 585.5 635.9 2,511.6 778.1 833.8 723.9 780.2 3,116.1
Acq 49.7 30.9 7.6 8.5 96.6 96.9 129.6 100.7 101.7 428.8
Organic 592.5 617.1 578.0 627.4 2,415.0 681.3 704.2 623.2 678.6 2,687.3
Organic Growth % 7.8% 4.3% 2.7% 2.0% 4.1% 6.1% 8.7% 6.4% 6.7% 7.0%
FY18 FY19
32
Quarterly Reported SG&A to Adjusted SG&A
Reconciliation Commentary
A. Represents non-cash expense related to
stock appreciation rights agreements
B. Represents non-cash compensation
expense related to changes in the values
of noncontrolling interests
C. Represents non-cash equity-based
compensation expense related to the
issuance of share-based awards
D. Represents severance expenses and
other costs permitted in calculations under
the ABL Facility and the First Lien Facility
E. Represents one-time costs related to
acquisitions paid to third parties.
F. Represents expenses paid to third-party
advisors related to debt refinancing
activities
(Unaudited) 1Q19 2Q19 3Q19 4Q19 FY2019 1Q20
($ in millions)
SG&A - Reported 185.4$ 185.3$ 178.2$ 190.6$ 739.5$ 194.6$
Adjustments
Stock appreciation rights (expense) benefit (A) (0.3) (0.6) (0.4) (1.3) (2.7) (0.1)
Redeemable noncontrolling interests (B) (0.5) (0.3) 0.0 (0.4) (1.2) (0.7)
Equity-based compensation (C) (0.4) (1.1) (1.1) (1.3) (3.9) (1.4)
Severance and other permitted costs (D) (4.8) (0.9) (0.2) (2.2) (8.2) (0.6)
Transaction costs (acquisition and other) (E) (4.8) (0.8) (1.1) (1.2) (7.9) (1.0)
Gain (loss) on disposal of assets 0.1 0.2 0.1 0.1 0.5 0.2
Debt Related Costs (F) (0.6) (0.1) - - (0.7) -
SG&A - Adjusted 174.1$ 181.6$ 175.5$ 184.3$ 715.5$ 191.1$
% of net sales 22.4% 21.8% 24.2% 23.6% 23.0% 22.6%
33
Quarterly Net Income to Adjusted EBITDA
Reconciliation Commentary
A. Represents non-cash expense related to
stock appreciation rights agreements
B. Represents non-cash compensation
expense related to changes in the values of
noncontrolling interests
C. Represents non-cash equity-based
compensation expense related to the
issuance of share-based awards
D. Represents severance expenses and other
costs permitted in calculations under the
ABL Facility and the First Lien Facility
E. Represents one-time costs related to
acquisitions paid to third parties
F. Represents the non-cash cost of sales
impact of purchase accounting adjustments
to increase inventory to its estimated fair
value
G. Represents mark-to-market adjustments for
derivative financial instruments
H. Represents expenses paid to third-party
advisors related to debt refinancing activities
( $ in 000s) 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
(Unaudited)
Net Income 8,650$ 24,912$ 5,815$ 16,625$ 56,002$ 24,820$
Add: Interest Expense 16,188 19,182 19,526 18,781 73,677 18,277
Less: Interest Income (236) 203 (10) (23) (66) (12)
Add: Income Tax Expense (Benefit) 2,836 8,059 1,442 1,702 14,039 7,590
Add: Depreciation Expense 10,610 11,538 11,919 12,389 46,456 12,422
Add: Amortization Expense 15,712 19,249 18,301 17,741 71,003 16,853
EBITDA 53,760$ 83,143$ 56,993$ 67,215$ 261,111$ 79,950$
Adjustments
Stock appreciation rights expense (A) 334 649 442 1,305 2,730 60
Redeemable noncontrolling interests (B) 531 282 (35) 410 1,188 662
Equity-based compensation (C) 404 1,094 1,140 1,268 3,906 1,395
Severance and other permitted costs (D) 4,836 882 229 2,205 8,152 554
Transaction costs (acquisition and other) (E) 4,753 841 1,066 1,198 7,858 972
(Gain) loss on disposal of assets (121) (173) (118) (113) (525) (156)
Effects of fair value adjustments to inventory (F) 4,129 - - 47 4,176 151
Change in fair value of financial instruments (G) 6,019 376 - - 6,395 -
Debt transaction costs (H) 627 51 - - 678 -
Total Add-Backs 21,512$ 4,002$ 2,724$ 6,320$ 34,558$ 3,638$
Adjusted EBITDA (as reported) 75,272$ 87,145$ 59,717$ 73,535$ 295,669$ 83,588$
34
Q1 2020 Income Before Taxes to Adjusted Net Income
Reconciliation Commentary
A. Depreciation and amortization from the increase in value of certain long-term
assets associated with the April 1, 2014 acquisition of the predecessor company
and the acquisition of Titan.
B. Normalized cash tax rate determined based on our estimated taxes for fiscal 2020
excluding the impact of purchase accounting and certain other deferred tax
amounts.
C. Includes the effect of 1.1 million shares of equity issued in connection with the
acquisition of Titan that were exchangeable for the Company’s common stock as
of April 30, 2019.
($ in 000s) 1Q20 1Q19
(Unaudited)
Income before taxes 32,410$ 11,486$
EBITDA add-backs 3,638 21,512 Purchase accounting depreciation and amortization (A) 12,385 12,455
Adjusted pre-tax income 48,433 45,453 Adjusted income tax expense 10,897 10,227
Adjusted net income 37,536 35,226
Effective tax rate (B) 22.5% 22.5%
Weighted average shares outstanding:
Basic 41,001 41,094 Diluted (C) 42,148 43,203
Adjusted net income per share:
Basic 0.92$ 0.86$
Diluted 0.89$ 0.82$
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