GMS Inc. is a leading distributor of specialty building products across North America, primarily serving residential and commercial contractors. The company operates over 320 distribution centers and nearly 100 tool sales and service centers, providing various products ranging from wallboard and ceilings to steel framing and complementary construction supplies.

In its fourth quarter of fiscal year 2025, GMS reported a decline in overall performance amid challenging market conditions. Net sales reached $1.334 billion, a decrease of 5.6% year-over-year, and down 4.1% on a per-day basis. Organic net sales declined by 9.7%, or 8.3% when adjusted for the same-day comparison. This decline was attributed largely to a softer demand environment, particularly impacting the wallboard and steel framing categories.

For the full fiscal year 2025, GMS recorded net sales of $5.514 billion, marginally up 0.2% from the previous year. However, organic sales saw a more significant decline of 5.4%. Net income for the year decreased by 58.2% to $115.5 million, adversely affected by a $42.5 million non-cash goodwill impairment charge taken in the third quarter.

In the fourth quarter specifically, GMS posted net income of $26.1 million, down from $56.4 million in the prior year, yielding a net income margin of 2.0%, down from 4.0%. Adjusted EBITDA for the quarter was $109.8 million, a decline from $146.6 million, resulting in an adjusted EBITDA margin of 8.2%, down from 10.4% year-over-year. GMS demonstrated strong cash flow performance with cash provided by operating activities of $196.8 million, down slightly from $204.2 million a year prior. Free cash flow for the quarter totaled $183.4 million.

The company undertook significant cost-saving measures, implementing $25 million of annualized reductions during Q4, bringing the total cost savings for fiscal 2025 to $55 million. Selling, general, and administrative expenses for the fourth quarter were $315.1 million, down from $315.5 million in the prior year, even with inorganic growth from recent acquisitions.

Product-specific results showed wallboard sales of $526.6 million, down 10.1% year-over-year, while ceilings increased by 6.4% to $201 million, benefiting from project mix and complementary products. Steel framing sales fell 14.2% to $189.2 million. The company’s operations are currently experiencing robust cash flow generation with net debt leverage standing at 2.4 times adjusted EBITDA, compared to 1.7 times a year ago.

As for guidance, GMS anticipates a cautious outlook for fiscal 2026, projecting organic net sales declines in the first quarter between low to mid-single digits. Nevertheless, the company aims to continue focusing on operational efficiencies and capital allocation to navigate through uncertain market conditions.