GMS Inc.

Greetings, and welcome to the GMS second quarter fiscal 2022 meetings call and webcast. 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 the conference over to your host, Terry Phelps, Vice President, Investor Relations for GMS. Thank you. You may begin.

Thank you, Melissa. Good morning, and thank you for joining us for the GMS Earnings Conference Call for the second quarter of fiscal 2022. I am 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 have posted PowerPoint slides to accompany this call in the Investors section of our website at www.gms.com. Turning to slide two, 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 factor section in the company's 10-K and other periodic reports. Today's presentation also includes a discussion of certain non-GAAP measures. The definitions and reconciliations 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 2022 relate to the quarter ended October 31st, 2021. 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'll turn the call over to John Turner.

Thank you, Carrie. Good morning, and thank you all for joining us today. We're going to start on slide three. We're pleased to share with you today results from another record-setting quarter with net sales of $1.15 billion, net income of $74.4 million, and adjusted EBITDA of $149.5 million. An inflationary pricing environment and continued strength in the residential market coupled with our focus on customer service and execution, drove another quarter of strong performance and profitability. A few specific highlights from the quarter include record levels of net sales, net income, and adjusted EBITDA with sales growth in each of our four reporting product categories. All core product line sales were up at least 25%, with steel remaining a standout with a greater than 140% increase for the quarter. Gross margin was 32.3%, which was slightly higher than expected. SG&A and adjusted SG&A as a percentage of sales improved year-over-year for the sixth quarter in a row. And finally, adjusted EBITDA margin improved 280 basis points to 13% for the quarter, compared with 10.2% a year ago. Within the context of high product inflation, supply chain constraints, and strength in residential demand, Our focus on serving the needs of our customers and executing on our strategic priorities were instrumental in our ability to deliver this level of performance. I'd like to share a few examples. First, on slide four, we remain focused on expanding share in our core products as our sales force works diligently to earn a greater share of our customers' business. While many home builders pulled back their activity levels during the quarter due to supply chain concerns, Our channel checks with suppliers provide confidence that we are maintaining or growing share in each of our key product categories, with notable growth in steel framing. Second, we are growing our complementary products to continue to diversify and profitably expand our offerings. This quarter sales grew 24.8%, marking the sixth consecutive quarter of year-over-year growth for this category. And, as you saw in last night's release, We just completed our latest and largest acquisition in this product category, AIMS, the nation's foremost provider of automatic taping tools. I will discuss this acquisition in more detail momentarily. But we are excited about this margin accrued transaction and its growth potential. Regarding platform expansion, beyond the AIMS and Kimco transactions that we completed this week, during the second quarter, we completed the purchase of the EIFS division of DK&B Construction Specialties. expanding our complimentary product offerings and expertise in the greater Nebraska market. And we opened a new greenfield facility in Tennessee, enhancing our ability to service our customers in that growing market. And finally, we continue to execute against the fourth pillar of our strategic priorities to leverage our scale and employ technology and best practices across the business to drive improved productivity and profitability. Arming our team with the tools and data to make better informed decisions is helping to drive additional operational efficiency. And we are advancing our levels of customer service by working to automate our transaction processes from order through dispatch to delivery, providing online capabilities to enhance the customer experience while lowering our cost to serve. Before turning the call over to Scott, I'd like to spend a few minutes discussing our acquisition of AIM's taping tools, which is highlighted on slide five. Ames pioneered the development of automatic taping and finishing tool technology in the 1930s, dramatically improving the speed, quality, and efficiency of the professional interior finisher. Today, Ames is the premier supplier of high-quality automatic taping tools and brings to us the industry-leading ATF brand, Tape Tech, and the industry's most widely used e-commerce platform, all-wall.com. The company, which will continue to operate under its well-known brands, utilizes three channels of distribution. First, AIM's network of more than 85 stores sells products for residential and commercial interior finishing applications and provides an unparalleled fleet of 100,000 ATF tools available for rent. The second distribution channel is the sales of Tape Tech-branded ATF tools and related products through dealers and distributors. including GMS. And the third channel is online sales of drywall finishing and related products through the all-wall.com e-commerce platform. With trailing 12-month revenue of approximately $100 million and margins in excess of our company average, AIM should serve not only as a complement to our product offerings, but to our long-term profitability as well. With that, I'll now turn it over to Scott to provide more perspective on our financial results for our second quarter. Scott?