Exhibit 99.1
Q3 2024 Earnings Call February 29, 2024
2 Safe Harbor and B asis of Presentation Forward - Looking Statement Safe Harbor — This presentation includes “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward - looking statements by the Company’s use of forward - looking terminology such as “anticipate,” “bel ieve,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other variations th ere on or comparable terminology. In particular, statements about the markets in which GMS operates and our products, including potential or expected growth in those markets and products, the eco nom y generally, our ability to continue successfully navigating the evolving operating environment and executing our business, strategic initiatives and priorities and growth pot ent ial, closing of acquisitions and integration of such acquisitions, future M&A and greenfields, inflation, capital structure, pricing (including but not limited to, fluctuations i n c ommodity pricing), volumes, net sales, organic sales, gross margins, incremental EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, capital expenditures, free cash flow, future financial per formance and liquidity, and the ability of the Company to grow stronger contained in this presentation may be considered forward - looking statements. Statements about our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance may be considered forward - looking statements. The Company has based forward - looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections ar e reasonable, such forward - looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. Forward - looking st atements involve risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10 - K, and in it s other periodic reports filed with the SEC. In addition, the statements in this release are made as of February 29, 2024. The Company undertakes no obligation to update any of the forwar d - l ooking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward - looking statements should not be relied upon as representing the Company’s views as of any date subsequent to February 29, 2024. Use of Non - GAAP and Adjusted Financial Information — To supplement GAAP financial information, we use adjusted measures of operating results which are non - GAAP measures. This non - GAAP adjusted financial information is provided as additional information for investors. These adjusted results exclude certain costs, expenses, gains and losses, and we believe their exclusion can enhance an overall understanding of our past financial performance and also our prospects for the fu ture. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of our operating performance by excl udi ng non - recurring, infrequent or other non - cash charges that are not believed to be material to the ongoing performance of our business. The presentation of this additional inf ormation is not meant to be considered in isolation or as a substitute for GAAP measures of net income, diluted earnings per share or net cash provided by (used in) operating activities pr epared in accordance with generally accepted accounting principles in the United States. Please see the Appendix to this presentation for a further discussion on these non - GAAP measure s and a reconciliation of these non - GAAP measures to the most directly comparable GAAP measures.
3 Q3 Fiscal 2024 At a Glance Comparisons are to Q 3 FY2 3 • Volume growth across all four major product categories • High levels of multi - family and commercial activity • An improving single - family backdrop • Resilient pricing in Wallboard, Ceilings and Complementary Products • Positive contributions from acquisitions • Net Sales of $1.258 billion, up 1.9% from $1.235 billion U.S. Wallboard Volume For GMS Multi - Family – Up 12.7% Commercial – Up 7.9% Single - Family – Down 2.3% 1 For a reconciliation of Adjusted EBITDA and Free Cash Flow to the most directly comparable GAAP metrics, see Appendix. • Cash from operations and Free Cash Flow 1 remained strong in the quarter at $104 million and $94 million, respectively • Net income of $51.9 million compared to $64.8 million in the prior year period; Net income margin was 4.1% compared to 5.2% in the prior year period • Adjusted EBITDA 1 of $128.0 million, compared to $140.8 million in the prior year period, beating expectations Q324 Net Sales
4 Drive Improved Productivity & Profitability Strategic Growth Priorities – Q3 FY24 Update Capitalize on existing fixed investments in locations & equipment where we are underpenetrated or below expected share Grow Complementary Product opportunities to diversify and profitably expand our product offerings Expand the platform through accretive acquisition and greenfield opportunities, balanced with debt reduction priorities Leverage our scale and employ technology and best practices to deliver a best - in - class customer experience with an aim to further profit improvement Expand Share in Core Products Grow Complementary Products Platform Expansion • The Gypsum Association, Steel Framing Industry Association and ceilings manufacturers all indicate that GMS continues to gain share • Q324 was the 15th consecutive quarter of year - over - year growth for our Complementary Products • Focus areas Tools & Fasteners, EIFS/Stucco and Insulation continue to outperform the broader category • Opened three greenfield locations • Announced our agreement to purchase Kamco Supply Corporation • Solid pipeline of M&A opportunities in both our core and complementary product lines • Equipping yard operators with the right tools and technologies continues to improve the efficiency of their operations. • Consolidation of legacy legal entities is reducing organizational and process complexity, along with costs, while also leveraging the standardization of product, vendor, customer and other operational data across the business
5 Expands share in core product categories Adds notable cross - selling opportunities and broader suite of top - tier product offerings Creates significant entry into underpenetrated NYC metro area GMS + Kamco NY A Highly Strategic Transaction Represents strong cultural alignment to GMS’ core values Generates significant revenues (~$235 million for the 12 months ended 12 - 31 - 23) Enhances go - forward customer serviceability and value proposition In December 2023, GMS announced its agreement to purchase Kamco Supply Corporation and affiliates. The transaction is expected to close in the coming days. As of February 29, 2024
6 Q3 Fiscal 2024 Sales Highlights U.S. Residential Sales Q324 Net Sales $ 1.3 B Per Day Net Sales 2.1% U.S. Commercial Sales 1.7% 2.4% 1.9% • Solid demand in commercial and multi - family construction drove volume increases • Deflationary pricing in Steel Framing reduced net sales by an estimated $55 million for the quarter • Adverse weather conditions delayed an estimated $15 million of net sales into the Company’s fourth quarter Multi - family sales 8.2% Single - family sales 6.1%
7 $402.2 $414.7 32.6% 33.0% 32.0% 32.5% 33.0% 33.5% $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Fiscal Q3 2023 Fiscal Q3 2024 Gross Profit Gross Margin ($ mm) Solid Gross Margin and Adj. EBITDA Despite Deflationary Steel Pricing 1 For a reconciliation of Adjusted SG&A, Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP metric s, see Appendix. 1 1 1 $263.6 $288.3 21.4% 22.9% 18.0% 18.5% 19.0% 19.5% 20.0% 20.5% 21.0% 21.5% 22.0% 22.5% 23.0% 23.5% 24.0% 24.5% $0 $50 $100 $150 $200 $250 $300 Fiscal Q3 2023 Fiscal Q3 2024 Adj. SG&A Adj. SG&A as % of Sales ($ mm) 1 $140.8 $128.0 11.4% 10.2% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% $0 $50 $100 $150 $200 Fiscal Q3 2023 Fiscal Q3 2024 Adj. EBITDA Adj. EBITDA Margin ($ mm) Gross Profit & Gross Margin Gross Profit up year - over - year, reflecting improved volumes and the associated attainment of calendar year - end volume incentives, partially offset by deflationary dynamics in steel pricing SG&A Of the $28.3 million year - over - year increase in SG&A expenses, nearly $10 million related to recent acquisitions and greenfields . The remaining increase was primarily driven by labor expenses associated with the higher cost to serve mix due to increased multi - family and commercial demand. SG&A leverage was also impacted by weather and deflationary steel prices. Net Income & Adj. EBITDA 1 Net income decreased 19.9% YOY to $51.9M, including a 10.9% increase in interest expense. Net income margin was 4.1% Adjusted EBITDA 1 of $128.0 million with 10.2% Adjusted EBITDA margin
8 Attractive Capital Structure Supports Strategic Priorities • Repurchased 370K shares for $24.8 million during Q324 • $216.5 million of repurchase authorization remaining at 01/31/24 1.6x 1.4x 1.5x 1.5x 1.5x 1/31/2023 4/30/2023 7/31/2023 10/31/2023 1/31/2024 $12 $48 $41 $36 $58 $844 FY24 FY25 FY26 FY27 FY28 Thereafter LTM Net Debt / PF Adjusted EBITDA 2 Debt 3 Maturity Schedule $ in millions 1. For a reconciliation of free cash flow to cash provided by operating activities, the most directly comparable GAAP metric, se e A ppendix. 2. For detail, including a reconciliation of Pro Forma Adjusted EBITDA to net income, the most directly comparable GAAP metric, see Appendix. 3. Debt includes First Lien Term Loan, ABL Facility, Senior Notes, Finance Leases & Installment Notes. 4. Includes cash used for Capital Expenditures, Acquisitions, Share Repurchases, Payments on Principal on Long - Term Debt and Paymen ts on Principal on Finance Lease Obligations for fiscal years 2021, 2022 and 2023. 5. Balance sheet, capital structure and share repurchase authorization references are as of 01/31/2024. Share Repurchases Q324 Cash from Operations $104.3M Q324 Free Cash Flow 1 Substantial Liquidity • $88.3 million of cash on hand • $866.3 million available under our revolving credit facility Acquisitions 53% Share Repurchases 18% Capital Expenditures 15% Debt/Lease Payments 14% 3 - Year Historical Use of Cash 4 For Fiscal Years 2021, 2022 and 2023 $94.1M
9 End Market & Product - Level Expectations for Q4 FY2024 Product Category Q4 FY24 YOY Per Day Volume Expectations Q4 FY24 YOY Price/Mix Per Day Expectations Wallboard • Multi - family: Up low single - digits • Single - family: Up low single - digits • Commercial: Up mid to high single - digits • Total Wallboard: Up low single - digits Up low single - digits Ceilings Up low - to - mid single - digits Up mid single - digits Steel Framing Up mid teens Down low teens Complementary Products Total sales growth in Complementary Products, including the benefits of recent acquisitions, is expected to be up high single digits Note: There will be 64 selling days in Q4 FY24, compared to 63 days in Q4 FY23. Also, the projections above do not include any potential benefits from the Kamco transaction, which is expected to close in e arl y March 2024.
10 Consolidated GMS Expectations for Q4 FY24 and Full Year Fiscal 2024 Metric for Q4 FY24 Q4 FY24 Expectation (on a Per Day Basis) Net Sales Up mid single - digits Gross Margin Approximately 32.2% Net Income $66 million - $69 million Adjusted EBITDA 1 $145 million - $150 million Metric for Full Year FY24 Full Year FY24 Expectation Interest Expense ~$73 million Capital Expenditures ~$56 million - $58 million Free Cash Flow 1 ~ 55% - 60% of FY24 Adj. EBITDA 1 Tax Rate 2 ~25.5% - 26.0% 1 For a reconciliation of Adjusted EBITDA, Adjusted Net Income or Free Cash Flow to the most directly comparable GAAP metrics, see Appendix. 2 Tax rate refers to the normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax am ounts. Note: There will be 64 selling days in Q4 FY24, compared to 63 days in Q4 FY23. Also, the projections above do not include any potential benefits from the Kamco transaction, which is expected to close in e arl y March 2024.
11 Appendix
12 Summary Quarterly Financials (In millions) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 (Unaudited) Wallboard Volume (MSF) 1,191 1,232 1,058 1,130 4,611 1,204 1,231 1,101 Wallboard Price ($ / '000 Sq. Ft.) 438$ 474$ 473$ 481$ 467$ 475$ 476$ 473$ Wallboard 522$ 585$ 501$ 545$ 2,152$ 571$ 585$ 521$ Ceilings 167 160 147 155 629 175 175 156 Steel framing 275 278 234 224 1,011 237 232 203 Complementary products 396 409 353 380 1,538 426 428 379 Net sales 1,360 1,431 1,235 1,304 5,329 1,410 1,421 1,258 Cost of sales 925 966 832 880 3,603 959 962 844 Gross profit 435 465 402 424 1,726 451 459 415 Gross margin 32.0% 32.5% 32.6% 32.5% 32.4% 32.0% 32.3% 33.0% Operating expenses: Selling, general and administrative expenses 268 279 267 280 1,094 287 301 296 Depreciation and amortization 32 32 31 31 127 32 33 33 Total operating expenses 300 311 299 311 1,221 319 334 328 Operating income 135 153 103 114 505 132 125 86 Other (expense) income: Interest expense (15) (16) (17) (18) (66) (19) (19) (19) Write-off of discount and deferred financing costs - - - - - (1) - - Other income, net 2 2 2 3 8 2 2 2 Total other expense, net (13) (14) (15) (16) (58) (18) (17) (17) Income before taxes 122 139 88 98 448 114 108 69 Income tax expense 32 36 24 23 115 27 27 17 Net income 90$ 103$ 65$ 76$ 333$ 87$ 81$ 52$ Business Days 63 65 62 63 253 64 65 62 Net Sales by Business Day 21.6$ 22.0$ 19.9$ 20.7$ 21.1$ 22.0$ 21.9$ 20.3$ Beginning Branch Count 286 289 291 297 286 304 305 308 Added Branches 3 2 6 7 18 1 3 3 Ending Branch Count 289 291 297 304 304 305 308 311
13 Quarterly Cash Flows (1) Free cash flow is a non - GAAP financial measure defined as net cash provided by (used in) operations less capital expenditures. D ifferences may occur due to rounding. ($ in millions) (Unaudited) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 Net income $ 89.5 $ 103.2 $ 64.8 $ 75.6 $ 333.0 $ 86.8 $ 81.0 $ 51.9 Non-cash changes & other changes 8.9 63.3 21.8 62.0 155.9 (12.3) 48.2 27.5 Changes in primary working capital components: Trade accounts and notes receivable (69.6) (63.8) 105.3 (8.9) (37.0) (38.2) (51.1) 92.1 Inventories (28.7) (3.6) (2.4) 17.9 (16.8) (1.4) 21.6 (20.3) Accounts payable (4.4) 8.2 (55.3) 58.2 6.7 (28.3) 18.4 (47.0) Cash provided by (used in) operating activities (4.4) 107.3 134.1 204.8 441.7 6.6 118.1 104.3 Purchases of property and equipment (10.9) (10.7) (11.6) (19.4) (52.7) (13.5) (16.0) (10.2) Proceeds from sale of assets 0.3 0.6 0.8 1.2 2.9 1.0 0.7 0.2 Acquisitions of businesses, net of cash acquired (2.6) (0.0) (17.8) (41.3) (61.7) (39.0) (17.0) 0.6 Cash (used in) investing activities (13.3) (10.1) (28.6) (59.5) (111.5) (51.5) (32.3) (9.4) Cash provided by (used in) financing activities 22.2 (77.4) (43.8) (166.7) (265.6) (39.1) (89.7) (83.9) Effect of exchange rates 0.2 (2.2) 0.8 (0.6) (1.8) 0.7 (1.1) 0.8 Increase (decrease) in cash and cash equivalents 4.7 17.6 62.5 (21.9) 62.8 (83.3) (4.9) 11.8 Balance, beginning of period 101.9 106.6 124.2 186.7 101.9 164.7 81.4 76.5 Balance, end of period $ 106.6 $ 124.2 $ 186.7 $ 164.7 $ 164.7 $ 81.4 $ 76.5 $ 88.3 Supplemental cash flow disclosures: Cash paid for income taxes $ 3.2 $ 57.6 $ 24.9 $ 24.7 $ 110.4 $ 3.2 $ 66.1 $ 24.4 Cash paid for interest $ 17.8 $ 11.5 $ 19.9 $ 12.6 $ 61.8 $ 21.9 $ 13.5 $ 22.0 Cash provided by (used in) operating activities $ (4.4) $ 107.3 $ 134.1 $ 204.8 $ 441.7 $ 6.6 $ 118.1 $ 104.3 Purchases of property and equipment (10.9) (10.7) (11.6) (19.4) (52.7) (13.5) (16.0) (10.2) Free cash flow (1) $ (15.3) $ 96.5 $ 122.5 $ 185.4 $ 389.1 $ (6.9) $ 102.1 $ 94.1
14 Net Sales (1) Organic net sales growth calculation excludes net sales of acquired businesses until first anniversary of acquisition date an d i mpact of foreign currency translation. ($ in millions) (Unaudited) FY24 FY23 Reported Organic (1) Organic (1) 1,231.8$ 1,234.6$ Acquisitions 27.2 - Fx Impact (0.6) - Total Net Sales 1,258.3$ 1,234.6$ 1.9% (0.2%) Wallboard 520.7$ 500.7$ 4.0% 3.5% Ceilings 155.7 146.8 6.1% 4.2% Steel Framing 203.4 234.5 (13.3%) (14.0%) Complementary Products 378.6 352.6 7.3% 1.8% Total Net Sales 1,258.3$ 1,234.6$ 1.9% (0.2%) Fiscal Q3 Variance
15 Quarterly Net Income to Adjusted EBITDA Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share - based awards D. Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility E. Represents one - time costs related to acquisitions paid to third parties F. Includes gains and losses from the sale and disposal of assets G. Represents the non - cash cost of sales impact of purchase accounting adjustments to increase inventory to its estimated fair value H. Represents expenses paid to third party advisors related to debt refinancing activities ( $ in 000s) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 (Unaudited) Net Income 89,470$ 103,153$ 64,775$ 75,593$ 332,991$ 86,830$ 80,957$ 51,905$ Add: Interest Expense 14,661 16,055 16,943 18,184 65,843 18,914 18,742 18,784 Add: Write off of debt discount and deferred financing fees - - - - - 1,401 - - Less: Interest Income (56) (154) (180) (897) (1,287) (474) (292) (378) Add: Income Tax Expense 32,030 35,995 23,697 22,790 114,512 26,734 27,205 17,468 Add: Depreciation Expense 14,993 15,058 15,162 15,964 61,177 16,327 16,963 17,276 Add: Amortization Expense 17,447 17,168 16,257 14,858 65,730 15,691 15,974 15,528 EBITDA 168,545$ 187,275$ 136,654$ 146,492$ 638,966$ 165,423$ 159,549$ 120,583$ Adjustments Stock appreciation rights (A) 2,344 3,230 314 1,815 7,703 1,218 401 1,789 Redeemable noncontrolling interests (B) 495 340 368 (25) 1,178 480 184 461 Equity-based compensation (C) 3,132 3,781 3,285 3,019 13,217 3,304 5,111 3,559 Severance and other permitted costs (D) 352 379 (315) 2,372 2,788 406 882 1,033 Transaction costs (acquisition and other) (E) 386 292 476 807 1,961 1,385 1,223 765 (Gain) loss on disposal of assets (F) (284) 81 (411) (799) (1,413) (131) (310) (222) Effects of fair value adjustments to inventory (G) 44 135 457 487 1,123 302 140 8 Debt transaction costs (H) - - - 173 173 911 378 44 Total Adjustments 6,469$ 8,238$ 4,174$ 7,849$ 26,730$ 7,875$ 8,009$ 7,437$ Adjusted EBITDA (as reported) 175,014$ 195,513$ 140,828$ 154,341$ 665,696$ 173,298$ 167,558$ 128,020$ Net Sales $1,359,553 $1,430,979 $1,234,618 $1,304,102 $5,329,252 $1,409,600 $1,420,930 $1,258,348 Adjusted EBITDA Margin 12.9% 13.7% 11.4% 11.8% 12.5% 12.3% 11.8% 10.2%
16 Net Income to Pro Forma Adjusted EBITDA Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share - based awards D. Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility E. Represents one - time costs related to our initial public offering and acquisitions paid to third party advisors as well as costs related to the retirement of corporate stock appreciation rights F. Represents the non - cash cost of sales impact of purchase accounting adjustments to increase inventory to its estimated fair value G. Represents mark - to - market adjustments for derivative financial instruments H. Represents one - time costs related to our secondary offerings paid to third party advisors I. Represents expenses paid to third party advisors related to debt refinancing activities J. Pro forma impact of earnings from acquisitions from the beginning of the LTM period to the date of acquisition, including synergies ( $ in 000s) 3Q24 LTM 2023 2022 2021 2020 2019 2018 2017 (Unaudited) Net Income 295,285$ 332,991$ 273,442$ 105,560$ 23,381$ 56,002$ 62,971$ 48,886$ Add: Interest Expense 74,624 65,843 58,097 53,786 67,718 73,677 31,395 29,360 Add: Write off of debt discount and deferred financing fees 1,401 - - 4,606 1,331 - 74 7,103 Less: Interest Income (2,041) (1,287) (163) (86) (88) (66) (177) (152) Add: Income Tax Expense 94,197 114,512 91,377 31,534 22,944 14,039 20,883 22,654 Add: Depreciation Expense 66,530 61,177 55,437 50,480 51,332 46,456 24,075 25,565 Add: Amortization Expense 62,051 65,730 63,795 57,645 65,201 71,003 41,455 43,675 EBITDA 592,047$ 638,966$ 541,985$ 303,525$ 231,819$ 261,111$ 180,676$ 177,091$ Adjustments Impairment of goodwill - - 63,074 - - - Stock appreciation rights (A) 5,223 7,703 4,403 3,173 1,572 2,730 2,318 148 Redeemable noncontrolling interests (B) 1,100 1,178 1,983 1,288 520 1,188 1,868 3,536 Equity-based compensation (C) 14,993 13,217 10,968 8,442 7,060 3,906 1,695 2,534 Severance and other permitted costs (D) 4,693 2,788 1,132 2,948 5,733 8,152 581 (157) Transaction costs (acquisition and other) (E) 4,180 1,961 3,545 1,068 2,414 7,858 3,370 2,249 (Gain) loss on disposal of assets (1,462) (1,413) (913) (1,011) 658 (525) (509) (338) Effects of fair value adjustments to inventory (F) 937 1,123 3,818 788 575 4,176 324 946 Gain on legal settlement - - - (1,382) (14,029) - - - Change in fair value of financial instruments (G) - - - - - 6,395 6,125 382 Secondary public offerings (H) - - - - 363 - 1,525 1,385 Debt transaction costs (I) 1,506 173 - 532 - 678 1,285 265 Total Adjustments 31,170$ 26,730$ 24,936$ 15,846$ 67,940$ 34,558$ 18,582$ 11,138$ Adjusted EBITDA (as reported) 623,217$ 665,696$ 566,921$ 319,371$ 299,759$ 295,669$ 199,258$ 188,229$ Contributions from acquisitions (J) 6,276 9,535 21,348 4,948 1,480 6,717 1,280 9,500 Pro Forma Adjusted EBITDA 629,493$ 675,231$ 588,269$ 324,319$ 301,239$ 302,386$ 200,538$ 197,729$ Net Sales $5,392,980 $5,329,252 $4,634,875 $3,298,823 $3,241,307 $3,116,032 $2,511,469 $2,319,146 Adjusted EBITDA margin (as reported) 11.6% 12.5% 12.2% 9.7% 9.2% 9.5% 7.9% 8.1%
17 Income Before Taxes to Adjusted Net Income Reconciliation Commentary A. Depreciation and amortization from the increase in value of certain long - term assets associated with the April 1, 2014 acquisition of the predecessor company and amortization of intangible assets from the acquisitions of Titan, Westside Building Materials, and AMES Taping Tools B. Normalized cash tax rate determined based on our estimated taxes excluding the impact of purchase accounting and certain other deferred tax amounts ($ in 000s) 3Q24 3Q23 (Unaudited) Income before taxes 69,373$ 88,472$ EBITDA adjustments 7,437 4,174 Purchase accounting depreciation and amortization (A) 10,396 12,485 Adjusted pre-tax income 87,206 105,131 Adjusted income tax expense 22,238 26,808 Adjusted net income 64,968$ 78,323$ Effective tax rate (B) 25.5% 25.5% Weighted average shares outstanding: Basic 39,864 41,578 Diluted 40,512 42,232 Adjusted net income per share: Basic 1.63$ 1.88$ Diluted 1.60$ 1.85$
18 Reported SG&A to Adjusted SG&A Reconciliation Commentary A. Represents changes in the fair value of stock appreciation rights B. Represents changes in the fair value of noncontrolling interests C. Represents non - cash equity - based compensation expense related to the issuance of share - based awards D. Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility E. Represents one - time costs related to acquisitions paid to third parties (Unaudited) 1Q23 2Q23 3Q23 4Q23 FY2023 1Q24 2Q24 3Q24 ($ in millions) SG&A - Reported 267.7$ 279.0$ 267.4$ 279.8$ 1,093.8$ 286.8$ 300.9$ 295.7$ Adjustments Stock appreciation rights (A) (2.3) (3.2) (0.3) (1.8) (7.7) (1.2) (0.4) (1.8) Redeemable noncontrolling interests (B) (0.5) (0.3) (0.4) 0.0 (1.2) (0.5) (0.2) (0.5) Equity-based compensation (C) (3.1) (3.8) (3.3) (3.0) (13.2) (3.3) (5.1) (3.6) Severance and other permitted costs (D) (0.4) (0.4) 0.3 (2.4) (2.9) (0.4) (0.9) (1.0) Transaction costs (acquisition and other) (E) (0.4) (0.3) (0.5) (0.8) (2.0) (1.4) (1.2) (0.8) Gain (loss) on disposal of assets (F) 0.3 (0.1) 0.4 0.8 1.4 0.1 0.3 0.2 Debt transaction costs (H) - - - (0.2) (0.2) (0.9) (0.4) (0.0) SG&A - Adjusted 261.3$ 270.9$ 263.6$ 272.4$ 1,068.1$ 279.2$ 293.0$ 288.3$ Net Sales 1,359.6$ 1,431.0$ 1,234.6$ 1,304.1$ 5,329.3$ 1,409.6$ 1,420.9$ 1,258.3$ Adjusted SG&A Margin 19.2% 18.9% 21.4% 20.9% 20.0% 19.8% 20.6% 22.9%
19 Leverage Summary (1) Net of unamortized discount of $0.3mm, $0.3mm, $2.5mm, $2.4mm and $2.3mm as of January 31, 2023, April 30, 2023, July 31, 20 23, October 31, 2023 and January 31, 2024 respectively. (2) Net of deferred financing costs of $2.4mm, $2.1mm, $4.1mm, $3.9mm and $3.8mm as of January 31, 2023, April 30, 2023, July 31 , 2023, October 31, 2023 and January 31, 2024 respectively. (3) Net of deferred financing costs of $4.3mm, $4.1mm, $3.9mm, $3.8mm and $3.6mm as of January 31, 2023, April 30, 2023, July 31 , 2023, October 31, 2023 and January 31, 2024 respectively (4) Net of unamortized discount of $0.2mm, $0.1mm, $0.1mm, $0.0mm and $0.0mm as of January 31, 2023, April 30, 2023, July 31, 20 23, October 31, 2023 and January 31, 2024 respectively. (5) For a reconciliation Pro Forma Adjusted EBITDA to net income, the most directly comparable GAAP metric, see Appendix. ($ mm) 1/31/23 4/30/23 7/31/23 10/31/23 1/31/24 LTM LTM LTM LTM LTM Cash and cash equivalents $187 $165 $81 $77 $88 Revolving Credit Facilities $240 $110 $113 $81 $29 First Lien Term Loan (1) (2) 498 497 493 494 493 Senior Notes (3) 346 346 346 346 346 Capital Lease Obligations 132 137 136 150 158 Installment Notes & Other (4) 8 8 13 6 4 Total Debt $1,223 $1,099 $1,102 $1,076 $1,031 Total Net Debt $1,037 $934 $1,021 $1,000 $942 PF Adj. EBITDA (5) $668 $684 $678 $647 $629 Total Debt / PF Adj. EBITDA 1.8x 1.6x 1.6x 1.7x 1.6x Net Debt / PF Adj. EBITDA 1.6x 1.4x 1.5x 1.5x 1.5x
20 Net Income to Adjusted EBITDA Outlook Reconciliation Q4 FY24 Net Income $66 - $69 Interest expense, net 15.6 - 16.3 Provision for income taxes 23.0 - 23.9 Depreciation and amortization expense 32.0 - 33.3 Other Adjustments 7.0 Adjusted EBITDA $145 - $150 $ in millions Note: There will be 64 selling days in Q4 FY24, compared to 63 days in Q4 FY23. Also, the projections above do not include any potential benefits from the Kamco transaction, which is expected to close in e arl y March 2024.