GMS Q4 Adjusted Earnings Exceed Expectations

GMS Inc. GMS reported 322 percent jump in profit for the fourth quarter driven by 30.3 percent growth in the top line. Its adjusted earnings doubled helped by 1.8 percentage point expansion in the gross margin.

GMS said its net income was $8.9 million, or $0.27 per share, for the fourth quarter, up from $2.1 million, or $0.07 per share, in the year-ago quarter. Its adjusted net income doubled to $17.4 million, or $0.53 per share, from $8.7 million, or $0.27 per share, in the comparable period of the last year. Street analysts' expected $0.36 a share.

The company's net sales increased 30.3 percent to $527.2 million from $404.5 million in the previous year quarter. Analysts predicted $524.39 million. Its gross margin expanded to 33 percent from 31.2 percent in the prior year quarter.

GMS President and CEO, Mike Callahan, stated, "Fiscal 2016 marked a record year of progress for GMS. We are extremely pleased with the consistent improvement across all of our major product categories throughout the year, resulting in significant growth in our net sales and Adjusted EBITDA. This expansion reflects our balanced business approach along with improving end market demand."

He said further, "Furthermore, we outpaced the market growth rate for the fifth consecutive year as we continued to capture core market share, open additional greenfield locations and complete accretive acquisitions. We also effectively managed our costs and capitalized on our national scale advantages as we delivered a 140 basis point improvement in gross margin along with growth in Adjusted EBITDA as a percentage of net sales to 7.4%."

On Monday, the stock advanced 3.16 percent.