GMS Inc.

Greetings and welcome to the GMS Inc. Second Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. Leslie Krakowski. Vice President of Investor Relations. Please go ahead.

Thanks, Laura. Good morning and thank you for joining us for the GMS Earnings Conference Call for the second quarter of fiscal 2021. I'm joined today by John Turner, President and Chief Executive Officer, and Scott Deacon, Vice President and Chief Financial Officer. In addition to the press release issued this morning, we've posted presentation slides to accompany to this call in the investor section of our website at gms.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties, many of which are beyond our control and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent management's current estimates and expectations. The company assumes no obligation to update any forward-looking statements in the future. Listeners are encouraged to review the more detailed discussions related to these forward-looking statements contained in the company's filings with the SEC, including the risk factors section in the company's 10-K and other periodic reports. Today's presentation also includes the discussion of certain non-GAAP measures. The definitions and reconciliation of these non-GAAP measures are provided in the press release and presentation slides. Please note that references on this call to the second quarter of fiscal 2021 relate to the quarter ended October 31st, 2020. Finally, once we begin the question and answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up. With that, I'd now like to turn the call over to John Turner. JT?

Thank you, Leslie. Good morning, and thank you for joining us today. All of us at GMS hope everyone joining this call as well as your families and colleagues are safe and well. I'll start with a review of our operating highlights and then turn it over to Scott who will cover our financial results. I'll then share some closing thoughts before taking your questions. Starting on slide three, outstanding execution by our team enabled us to achieve solid second quarter results. While the overall operating environment remained challenging throughout the period, particularly with respect to commercial construction, we realized benefits from the strong residential market and a progressively improving environment in Canada. Net sales and organic net sales on a per-day basis declined 4.2% and 5%, respectively, year over year, exceeding our previous expectations. As anticipated, our gross margin of 32.6% was lower than the second quarter record of 33% last year. However, it increased 10 basis points sequentially, indicating continued discipline on both the demand and supply sides of our business amid the tight competitive environment. Controlled alignment of our cost structure to current demand enabled us to improve SG&A and adjusted SG&A as a percentage of sales while ensuring a continued relentless focus on serving our customers. As a result, adjusted EBITDA margin of 10.2%, marked the second consecutive quarter of exceeding 10% in a very tough market with decremental adjusted EBITDA within the outlook range provided on our first quarter call. We generated positive free cash flow, and our balance sheet and liquidity position provide us with exceptional financial flexibility. On the health and safety front, we maintain enhanced operating protocols in compliance with public health requirements, recommendations and guidelines aimed at reducing the spread of COVID-19, and the health and safety of our employees, business partners, and communities remains our top priority. Considering the environment in which we are operating, we continue to perform very well in the second quarter. My congratulations and thanks go out to the entire GMS team who made these results possible, remaining engaged, focused, and proactive as we come together in support of our customers and each other. At the same time, we offer our gratitude for the continued partnership we share with both our customers and suppliers. With that, I'll now turn it over to Scott to provide more perspective on our financial results for the second quarter. Scott?