GMS Inc. (NYSE:GMS) Q2 2021 Earnings Conference Call - Final Transcript

Dec 03, 2020 • 08:30 am ET

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GMS Inc. (NYSE:GMS) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings and welcome to the GMS Inc Second Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions]

I would now like to turn this conference over to your host, Ms. Leslie Kratcoski, Vice President of Investor Relations. Please go ahead.

Executive
Leslie H. Kratcoski

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 Deakin, Vice President and Chief Financial Officer. In addition to the press release issued this morning, we've posted presentation slides to accompany this call in the Investors 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 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 31, 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. J.T.?

Executive
John C. Turner

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 3. 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 in 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