GMS Inc. (NYSE:GMS) Q2 2020 Earnings Conference Call - Final Transcript

Dec 05, 2019 • 08:30 am ET

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GMS Inc. (NYSE:GMS) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the GMS Inc. Second Quarter Fiscal 2020 Earnings Conference Call and Webcast. [Operator Instructions]

It is now my pleasure to introduce your host, Ms. Leslie Kratcoski, Investor Relations. Thank you. You may begin.

Executive
Leslie H. Kratcoski

Thanks, Michelle. Good morning, and thank you for joining us for the GMS earnings conference call for the second quarter of fiscal '20. I'm joined today by John Turner, President and CEO; Scott Deakin, Chief Financial Officer; and Lynn Ross, Chief Accounting Officer.

In addition to the press release issued this morning, we have posted presentation slides to accompany 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 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 second quarter fiscal 2020 relates to the quarter ended October 31st, 2019.

[Operator Instructions]

With that, I'll now turn the call over to John Turner. John?

Executive
John C. Turner

Thank you, Leslie. Good morning, and thank you for joining us today. I will begin today's call with a review of our operating highlights, and then turn it over to Scott to cover our financial results in more detail. I'll then conclude our prepared remarks with an overview of the strategic priorities we are undertaking as we move forward.

Turning to slide 3. Our team continued to execute well in the second quarter. Net sales increased 3.4%, driven by positive volume growth across each of our product lines, primarily in wallboard and steel framing, where we generated approximately 6% and 10% volume growth, respectively.

This performance reflects solid demand conditions in both our commercial and residential end markets in the US, where net sales in total increased over 5%. Partially offsetting the favorable volume growth was a more challenging pricing environment, particularly in steel, as well as some continued softness in Canada.

Organic net sales increased 2.7%, with just over 4% organic growth in the US, driven by strong volume, reflective of favorable end market demand conditions, as well as execution of our organic growth strategies, focused around expanding share in our core products and growing sales of our complementary other product lines.

In Canada, we recorded just under a 6% organic sales decline, which was less than the