Segments

3 Months Ended

Jul. 31, 2025

During the three months ended July 31, 2025, the Company divided its Western operating segment into two operating segments, Northwest and West, which resulted in an increase (from nine to ten) in the number of geographic operating segments. The Company performed a goodwill impairment test immediately before and after the change in operating segments, which indicated the fair values of the Company’s reporting units exceeded their carrying values. The Company aggregates its operating segments into a single reportable segment based on similarities between the operating segments’ economic characteristics, nature of products sold, production process, type of customer and methods of distribution. There were no other changes to the Company’s reportable segments during the three months ended July 31, 2025. The CODM is not regularly provided and does not evaluate segments using total asset or capital expenditure information and it is therefore not disclosed. For more information regarding the Company’s reportable segments, see Note 16, “Segments,” in the Company’s Annual Report on Form 10-K for the year ended April 30, 2025.

Segment Results

The following table presents segment results:


	Three Months Ended July 31,
	2025		2024
	(in thousands)
Geographic Divisions Segment
Net sales	$	1,387,215	$	1,416,818
Less expenses (income):
Cost of sales (exclusive of depreciation and amortization)	965,903		982,133
Operating expenses	290,455		294,833
Other income(a)	(1,303)		(2,047)
Segment Adjusted EBITDA	$	132,160	$	141,899

__________________________________________

(a)Includes customer finance charges, credit card surcharges and other miscellaneous income items.

The following tables present reconciliations of net sales and segment Adjusted EBITDA:


	Three Months Ended July 31,
	2025		2024
	(in thousands)
Reconciliation of net sales
Segment net sales	$	1,387,215	$	1,416,818
Other net sales(a)	27,117		31,638
Consolidated net sales	$	1,414,332	$	1,448,456

Reconciliation of Adjusted EBITDA
Segment Adjusted EBITDA	$	132,160	$	141,899
Other Adjusted EBITDA(a)	3,329		3,982
Consolidated Adjusted EBITDA	135,489		145,881
Interest expense	(21,068)		(22,213)
Interest income	84		370
Depreciation	(21,290)		(19,228)
Amortization	(19,629)		(18,804)
Stock appreciation expense(b)	(867)		(243)
Redeemable noncontrolling interests and deferred compensation(c)	(86)		(422)
Equity-based compensation(d)	(3,744)		(3,678)
Severance and other permitted costs(e)	(1,185)		(956)
Transaction costs (acquisitions and other)(f)	(6,150)		(1,280)
Loss on disposal of assets(g)	(4)		(858)
Effects of fair value adjustments to inventory(h)	—		(375)
Change in fair value of contingent consideration(i)	(485)		—
Income before taxes	$	61,065	$	78,194

__________________________________________

(a)Represents the Company’s non-reportable Ames and Tool Source businesses.

(b)Represents changes in the fair value of stock appreciation rights.

(c)Represents changes in the fair values of noncontrolling interests and deferred compensation agreements.

(d)Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(e)Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility.

(f)Represents costs related to acquisitions paid to third parties, including costs for the pending merger with The Home Depot.

(g)Includes gains and losses from the sale and disposal of assets.

(h)Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value.

(i)Represents the change in fair value of contingent consideration arrangements.

Revenues by Product

The following table presents the Company’s net sales to external customers by main product lines:


	Three Months Ended July 31,
	2025		2024
	(in thousands)
Wallboard	$	556,393	$	587,929
Complementary products	440,457		443,513
Steel framing	196,553		209,858
Ceilings	220,929		207,156
Total net sales	$	1,414,332	$	1,448,456

The following table presents additional detail on the Company’s net sales of complementary products:


	Three Months Ended July 31,
	2025		2024
	(in thousands)
Tools and fasteners	$	86,782	$	91,169
Insulation	84,121		85,043
Joint treatment	74,979		75,289
Lumber	45,090		43,023
EIFS/stucco	53,957		50,952
Other	95,528		98,037
Complementary products	$	440,457	$	443,513

Geographic Information

The following table presents the Company’s net sales by major geographic area:


	Three Months Ended July 31,
	2025		2024
	(in thousands)
United States	$	1,200,190	$	1,258,905
Canada	214,142		189,551
Total net sales	$	1,414,332	$	1,448,456

The following table presents the Company’s property and equipment, net, by major geographic area:


	July 31, 2025		April 30, 2025
	(in thousands)
United States	$	468,772	$	459,608
Canada	62,275		64,400
Total property and equipment, net	$	531,047	$	524,008

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

GMS Inc. 10-Q