GMS Inc., a North American specialty building products distributor, posted net sales of $1.41 billion for its fiscal first quarter ended July 31, slightly below the $1.45 billion recorded a year earlier. Net income fell to $43.6 million from $57.2 million in Q1 2024.
The decline in sales was driven by lower volumes in wallboard and steel framing, down 5.4% and 6.3%, respectively. Gains in the ceilings segment, up 6.6%, and flat complementary products partially offset the decreases. Operating income fell to $81.2 million from $98.4 million a year ago, while total operating expenses rose slightly to $355.3 million.
GMS said results reflected typical seasonal trends and its continued focus on operational efficiency and serving commercial and residential construction customers across its 300-plus branches.
Following the quarter, Home Depot secured U.S. antitrust clearance for its $5.5 billion tender offer to acquire GMS, a step forward in a deal first announced June 29. The Department of Justice granted early termination of the waiting period under the Hart-Scott-Rodino Act. The $110-per-share cash offer still requires approval under Canada’s Competition Act and tendering by most GMS shareholders. As of Aug. 6, 34.7% of shares had been tendered. Home Depot expects the acquisition to close by the end of fiscal 2025, pending final regulatory and shareholder approvals.
If completed, the acquisition would integrate GMS into Home Depot’s SRS Distribution Inc., creating a combined network of more than 1,200 locations and 8,000 trucks serving professional contractors. GMS CEO John C. Turner Jr. and his leadership team are expected to remain in place post-closing.
“This acquisition accelerates SRS’s strategy to become a leading multi-category building materials distributor,” said SRS CEO Dan Tinker.
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