Investor Overview - s24.q4cdn.com · certain markets Professional Salesforce Helps Customers...

November 2019

Investor Overview

2

Safe Harbor and Basis 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,” “believe,” “continue,” “could,”

“estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other variations thereon or comparable

terminology. In particular, statements about the markets in which GMS operates and the economy generally, statements about growth potential across the Company’s

business, including from organic growth, M&A and greenfields, and the ability to deliver growth, profitability and value creation, and the anticipated benefits of the

Company’s cost reduction and operational improvements plan, including future SG&A savings, contained in this presentation are forward-looking statements. In addition,

forward looking statements may include statements regarding the Company’s expectations concerning its strategy, capital structure, financial performance and market

position. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes

these expectations, assumptions, estimates and projections are 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 statements involve risks and uncertainties, including, but not limited to, economic, competitive,

governmental and technological factors outside of the Company’s control, that may cause its business, strategy or actual results to differ materially from the forward-

looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply, and/or demand for products which GMS distributes;

general economic and business conditions in the United States and Canada; the activities of competitors; changes in significant operating expenses; changes in the

availability of capital and interest rates; adverse weather patterns or conditions; cybersecurity breaches and other disruptions to our IT systems; our recently announced

leadership succession plan; variations in the performance of the financial markets, including the credit markets; the possibility that the expected synergies and cost

savings and final impacts from the Titan acquisition will not be realized, or will not be realized within the expected time period; the risk that the GMS and Titan businesses

will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships and to accomplish other GMS

objectives; the risk of customer attrition; our ability to efficiently manage and control our costs and the success of our previously announced cost reduction plan; and other

factors described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K, and in its other periodic reports filed with the SEC. The

Company undertakes no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in

expectation or otherwise.

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 future.

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 excluding 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 information 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 prepared 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 measures and a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.

3

GMS at a Glance

• Leading North American specialty distributor

of interior construction products:

- Wallboard, Ceilings, Steel Framing and Other Products

• More than 250 branches across US & Canada

• Founded in 1971

• One-stop-shop for the interior contractor with broad

product offering

• Critical link between suppliers and a highly fragmented

customer base

• North American scale combined with local expertise

• Diversified and balanced end-market exposure

• Over 5,800 employees embracing strong entrepreneurial

culture

• Multiple levers to drive growth

• NYSE: GMS (IPO in 2016)

• Market Cap: $1.2 billion

• Headquartered in Atlanta, GA

$1,570

$1,858

$2,319$2,511

$3,116

6.7%

7.4%

8.1% 7.9%

9.5%

FY-15 FY-16 FY-17 FY-18 FY-19

Net Sales Adj. EBTIDA Margin*

$ millions, April FYE

* Adj. EBITDA Margin is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP

measure, see Appendix.

4

A One-Stop-Shop for the Interior Contractor

GMS sells a complementary and

complete product offering to the

interior contractor who installs

wallboard, ceilings, steel framing

and ancillary products needed to

complete the job.

Other28%

Ceilings 15%

Steel Framing 16%

Wallboard 41%

Net Sales Breakdown (FY2019)

5

Product Offering

• Used to finish the interior walls and ceilings in residential, commercial and institutional construction projects

• Exterior wallboard

Wallboard Ceilings Steel Framing Other Products

• Suspended ceiling systems primarily comprised of mineral fiber, ceiling tile and grid

• Architectural specialty ceilings systems

• Steel framing products for interior walls

• Sold into commercial applications, typically as part of a package with wallboard, ceilings and other products

• Primarily consists of complementary interior construction products, including joint compound, tools and fasteners, safety products and EIFS (exterior insulation and finishing system)

• Various types of wallboard including: 1/2” standard (residential), 5/8” fire rated (commercial), foil backed, lead lined, moisture resistant, mold resistant and vinyl covered

• Acoustical ceiling tiles (standard and architectural specialty)

• Clips and hangers

• Covered fiberglass

• Ceiling tile grid

• Drywall steel

• Flat stock

• Plastering steel

• Structural framing

• Studs and track

• Adhesives

• EIFS

• Insulation

• Joint compound and plaster

• Safety equipment

• Tools and fasteners

Description

Products

6

GMS Serves as a Critical Link Between Suppliers and a

Highly Fragmented Customer Base

Wallboard

Ceilings

Residential / commercial

contractors

• Mostly independent operators

• Highly diversified; values support

and relationship with distributors

Large National Home Builders

Commercial contractors

• Value extensive product expertise

and complete product offering

Key Manufacturers Specialty Distributor Customers

• Specialty distributors lead the wallboard distribution channel

- Neither big boxes nor lumberyards want to make the investment in required capital-intensive specialized equipment, which limits

their addressable market

• Specialty distributors account for significant majority of ceiling distribution channel

- Ceilings manufacturers rely on the technical expertise of specialty distributors’ salesforces

• Suppliers have limited desire to serve customers directly, which puts distributors in a very strong position in the value chain

7

North American Platform With Local Presence

• GMS combines the benefits of North American scale with a local “go-to-market” strategy

• GMS has an integrated North American platform, but operates through over 50 local brands that are highly regarded in their markets

• GMS’s model generates significant economies of scale, while maintaining the high service levels, entrepreneurial culture, andthe customer intimacy of a local business

8

Differentiated Service Model Drives Market Leadership

Breadth of Product Line Differentiates GMS from Smaller

Competitors

• Ensures product availability

• Access to latest product innovations; significant customer for its top suppliers

• Leading ceilings lines with exclusivity in certain markets

Professional Salesforce Helps Customers Succeed in the Market Place

• Deep technical expertise and knowledge of local markets

• Key intermediary for suppliers in reaching the end customer

• Provides business development, bid support, expertise and sourcing

Differentiated

Service Model

Logistics Execution is Critical GivenWeight and Delivery Requirements

• Reputation for best-in-class delivery execution

• Strong processes, sequenced loading, coordinated delivery and leading technology and equipment

• Customized delivery plan and unique degree of quality control

• Network of Regional Safety Managers

• Strict and consistent safety procedures

• Safety protocol critical to larger commercial contractor customers

Superior Safety Track Record isHighly Valued by Customers

GMS believes it sets the industry standard in product availability, customer support, delivery execution and safety; this

differentiated service model has driven attractive gross profit margins and is a competitive advantage vs. smaller

competitors

9

Diversified and Balanced End Market Exposure

Residential ~45%

Commercial ~55%

Net Sales Breakdown (FY2019) • GMS’s business is diversified across the spectrum of construction end markets:

• Residential

• Single-Family New

• Multi-Family New

• R&R

• Commercial

• New Construction

• R&R

10

Entrepreneurial Culture and Vision, Mission & Values Drive Execution

GMS’ unique culture combines a results-driven environment with a

highly entrepreneurial, self starter attitude, guided by a strong Vision,

Mission & Core Values.

VISION

We will be the premier distributor in every market we serve through embracing

our unique culture and professional humility.

MISSION

We create opportunities, build significant relationships and deliver solutions.

CORE VALUES

AT GMS –

• Our people have the independence and authority to make a difference.

• We invest in relationships and every person is important.

• Our highest priority is serving others.

• We passionately pursue a safe work environment along with a relentless focus

on operational excellence.

• We believe you can never go wrong doing the right thing.

11

Proven Track Record of Growth

$87$106

$138

$188

$199

$296

6.4% 6.7%7.4%

8.1% 7.9%

9.5%

0%

5%

10%

15%

20%

$0

$40

$80

$120

$160

$200

$240

$280

FY-14 FY-15 FY-16 FY-17 FY 18 FY 19

Adj. EBITDA % Margin

$1,353$1,570

$1,858

$2,319$2,511

$3,116

16.4% 16.0%18.3%

24.8%

8.3%

24.1%

0%

10%

20%

30%

40%

50%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

FY-14 FY-15 FY-16 FY-17 FY-18 FY-19

Revenue % Growth vs. Prior Yr

Net Sales ($ mm) Growth (% )

FY Net Sales

Adj. EBITDA ($ mm) Adj. EBITDA Margin (%)

FY Adjusted EBITDA *

* Adj. EBITDA is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP


12

$34 $40$57

$68

$17532.1%29.0% 30.3%

34.2%

59.1%

0%

10%

20%

30%

40%

50%

60%

70%

$0

$40

$80

$120

$160

$200

FY-15 FY-16 FY-17 FY 18 FY 19

Free Cash Flow FCF as % of AEBITDA

Free Cash Flow ($ mm) FCF as % of Adj. EBITDA* (%)

Free Cash Flow*

Strong Free Cash Flow* Generation

* Free Cash Flow and Adj. EBITDA are non-GAAP financial measures. For a reconciliation of Free Cash Flow to Cash from Operating Activity and Adj.

EBITDA to Net Income (loss), the most directly comparable GAAP measures, see Appendix.

• FY 19 included ~$35 million increase in accounts payable not expected to recur: target Free Cash Flow* as % of

Adj. EBITDA* is 40 – 45% in FY 2020

• Priorities for Free Cash Flow* include debt repayment, selective acquisitions and opportunistic share repurchases

13

Multiple Levers to Drive Growth

(5)

• Well Diversified End Markets with

Significant Room for Continued

Expansion

Market

Growth

• Operating leverage

• Operational excellence

Margin

Expansion

Organic

Growth

Strategic

Acquisitions

• Strategic Acquisition Opportunities in

Highly Fragmented Market

• Expanding in New and Existing Markets

to Enhance Strategic Capabilities

• Market Share Gains

• Greenfield Branch Openings

• Capitalize on “Other Products”

Growth Opportunities

* Adj. EBITDA is a non-GAAP financial measure. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP


5 Year CAGR through FY 2019:

Net Sales - 18.2%

Adj. EBITDA* - 27.7%

14

GMS has a significant opportunity to expand its geographic footprint in under-served and under-penetrated markets

through accretive greenfields and acquisitions

• GMS has a

demonstrated

history of successful

expansion through

greenfields and

acquisitions

• GMS has limited or

no presence in just

under 35%(1) of the

top 100 MSAs in the

U.S. and 50% of the

top 10 CMAs in

Canada

• Significant

opportunity for share

gains in new and

existing markets

over time

• Despite industry

consolidation, large

portion of the market

is still comprised of

local, independents;

maintain active

dialogue with

several potential

targets

(1) GMS currently has limited or no branches in the areas identified as an MSA with limited or no GMS presence. There can be no assurance that GMS will be able to expand into any of these areas. Additionally, in

the event GMS takes measures to expand into these areas, there can be no assurance that GMS will be successful, and any such expansion will be subject to several risks including those discussed under the

heading “Risk Factors” in the Registration Statement that the Company has filed with the SEC for the offering to which this presentation relates.

Central Midwest

Gulf Coast

Map Legend

- GMS Location as of Apr-19

- Targeted Areas

Opportunity to Further Expand

15

Expansion Strategy

GMS continues to focus on expansion of the platform via accretive acquisitions and greenfields

Acquisition & Greenfield Strategy Case Study: New England Gypsum Supply

Evaluating Targeted Markets

◼ Focus on large metro areas where GMS has limited and/or

underpenetrated footprint

◼ Leverage GMS platform to extend operations into large suburban

areas with proximity to metro hubs

◼ Evaluate opportunities to gain further scale and market penetration in

areas where GMS already has an established presence

Acquisition Strategy:

◼ Dedicated M&A team

◼ Leading capabilities in targeted markets

◼ Fit GMS culture and platform

◼ Attractive purchase price multiples with realization of scale benefits

and identified cost synergies

Greenfield Strategy:

◼ Organic expansion in targeted markets with favorable dynamics for

further GMS presence and high strategic value

◼ Emphasis on incremental revenue generation; ability to leverage

existing cost base for profitable expansion

◼ Have been able to expand market coverage of New England through

a combination of both acquisition and greenfield activity

◼ Original acquisition of Robert N. Karpp company in Feb-16

established initial GMS position in New England with a significant

presence in the Boston metro area

◼ Subsequent greenfields aid in penetration of the metro area as well as

expansion of the platform to additional surrounding markets

leveraging scale of the platform in Boston

Feb-16: Original Acquisition Robert N. Karpp Company

1

Jun-17: Greenfield Expansion in Wilmington, MA

2

Feb-18: Greenfield Expansion in Hartford, CT

3

May-19: Greenfield Expansion in Portland, ME

4

Date

Expansion

Type Acquisition/Greenfield Locations Strategic Rationale

Jun-19 Acquisition▪ San Antonio, TX (2)

▪ La Feria, TX

▪ Consolidates position in San Antonio and the Rio Grande Valley; adds

location serving Brownsville & McAllen metro areas

▪ Armstrong ceilings line in all three locations

▪ Joins existing Lone Star Materials platform (3 locations in South Texas)

Mar-19 Greenfield Carrollton, TX ▪ Carrollton, TX

▪ Additional market density in Dallas/Fort-Worth metro area

▪ Highly complementary footprint relative to existing platform, adds much

needed market coverage in northern Dallas

Mar-19 Acquisition▪ LaPlace, LA

▪ Baton Rouge, LA

▪ Expands Gulf Coast presence with first locations in New Orleans and

Baton Rouge markets

▪ Joins established Capitol Materials, Inc. platform (19 locations in

Georgia, Alabama and Florida Panhandle)

Aug-18 Greenfield Philadelphia, PA ▪ Philadelphia, PA

▪ Additional market density in the Philadelphia metro area

▪ Adds downtown location complementary to existing facility located in

King of Prussia, PA

Aug-18 Acquisition ▪ Paramount, CA

▪ Expands Southern California presence with location in Los Angeles

metro area; 70+ year operating history in the market

▪ Joins established J&B Materials platform (7 locations in California and

Hawaii)

Jun-18 Acquisition

▪ Ontario (5)

▪ Manitoba (1)

▪ Saskatchewan (1)

▪ Alberta (7)

▪ British Columbia (16)

▪ Acquisition of largest player in Canada

▪ Consolidated platform with 30 locations spanning 5 Canadian

Provinces

16

Track Record of Successful Expansion

GMS has a long history of successful platform expansion including the completion of over 60+ acquisitions and

greenfields since May 1, 2014

◼ Since May 1, 2014,

GMS has acquired 30

companies

representing a total of

95 locations

◼ Opened additional

30+ organic

greenfield locations

over the same period,

complementing

acquisition strategy

◼ All U.S. locations

fully-integrated into

GMS platform;

dedicated integration

supporting platform

expansion

◼ Continue to evaluate

strong pipeline of

strategic acquisition

and greenfield

opportunities

Select Recent GMS Expansion

17

Diversified End Markets: Business Mix Across Commercial

and Residential as well as New Construction and R&R

Source: Dodge Data & Analytics Source: JCHS

Source: Census Bureau; * estimates average projections of Fannie Mae, Freddie Mac, MBA, and NAHB; **Reflects average from 1959 to 2018.

US Single-Family Housing Starts (‘000’s) US Multi-Family Housing Starts (‘000’s)

Non-Residential Building ($ Billions)Leading Indicator of Remodeling Activity ($ Billions)

18

Operating Leverage Opportunity

◼ North American scale, local market leadership, differentiated operating platform and value-added services

drive industry-leading margins

◼ Strategic cost reduction plan implemented in May 2018 generated $20 million in annualized savings

◼ Positioned to benefit from operating leverage and operational excellence initiatives

$2,511

$2,647

$2,833

$2,972

$3,116

24.8%

24.3%

23.5%

23.1%23.0%

22%

23%

23%

24%

24%

25%

25%

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

LTM Q4 18 LTM Q1 19 LTM Q2 19 LTM Q3 19 LTM Q4 19

Revenue Adjusted SG&A %*

* Adjusted SG&A is a non-GAAP financial measure. For a reconciliation of Adjusted SG&A to SG&A, the most directly comparable GAAP measure,

see Appendix p..

$ MM

19

Attractive Capital Structure

Net Debt / LTM PF Adjusted EBITDA*

4.9x

4.3x

2.9x 2.8x

4.2x

3.8x 3.8x3.6x 3.7

4/30/15 4/30/16 4/30/17 4/30/18 7/31/18 10/31/01 1/31/19 4/30/19 7/31/19

$42 $41

$81

$31$22

$940

2020 2021 2022 2023 2024 Thereafter

Debt** Maturity Schedule as of FYE 2019

($ mm)

*See appendix for a reconciliation of LTM PF Adjusted EBITDA **Debt includes First Lien Term Loan, ABL Facility, Capital Leases & Installment Notes

• Substantial liquidity, with $47 million of cash on hand and an additional $314 million available under

our ABL Facilities as of 4/30/2019

• First Lien Term Loan at L+275 (>80% of total long term debt) does not mature until 2025

• In order to hedge against potential future interest rate volatility, entered into an interest rate swap

agreement in February 2019. This agreement effectively provides a fixed rate on $500 million of our

first lien term debt

• Moody’s and Standard & Poors current ratings of B1 and BB- respectively

20

Q1 Fiscal 2020 Performance

Net Sales & Mix

$778.1

$847.2

$0

$300

$600

$900

Fiscal Q1 2019 Fiscal Q1 2020

41%

15%

16%

28%40%

15%

16%

29%▪ Organic net sales growth of 3.4%

▪ Wallboard: +3.5% organic (Volume ~+4%/Price <-1%)

▪ Ceilings: +8.3% organic (Volume ~+3%/Price ~+5%)

▪ Steel: -0.8% organic (Volume ~+5%/ Price & Mix ~-6%)

▪ Other: +3.1% organic

Gross Profit & Margin

Net Sales ($ mm)

$244.8$273.7

31.5%32.3%

20.0%20.5%21.0%21.5%22.0%22.5%23.0%23.5%24.0%24.5%25.0%25.5%26.0%26.5%27.0%27.5%28.0%28.5%29.0%29.5%30.0%30.5%31.0%31.5%32.0%32.5%33.0%

$0

$50

$100

$150

$200

$250

$300


Gross Profit Gross Margin

▪ Gross Profit up 11.8% as a result of higher sales vs Q1 FY

2019, both organically and from acquisitions, as well as $4.1

million of non-cash purchase accounting adjustments

recorded in Q1 2019

▪ Gross margin of 32.3% increased 80 bps from 31.5% Q1 FY

2019 due to net favorable price-cost dynamics, Titan

purchasing synergies, and the prior year purchase accounting

adjustments

As of Q1 2020, organic net sales growth calculation modified to exclude net sales of

acquired businesses until first anniversary of acquisition date and impact of foreign

currency translation (see page 13 for presentation of prior years’ organic net sales

growth under new methodology).

21

SG&A and Adjusted SG&A (1)

Q1 Fiscal 2020 Performance

▪ Reported SG&A was $194.6 million (23.0% of sales) in Q1 2020

and $185.4 million (23.8% of sales) in Q1 2019

▪ Adjusted SG&A was $191.1 million (22.6% of sales) in Q1 2020 and

$174.1 million (22.4% of sales) in Q1 2019

▪ Adjusted SG&A as % of sales increased by 20 bps year over year

as a result of investments in business initiatives, reduced operating

leverage in Canada and inflationary cost pressures including those

resulting from adverse weather conditions. These impacts were

partially offset by increased cost efficiencies resulting from the

Company’s cost reduction initiatives.

Net Income, Adjusted Net Income & Adjusted EBITDA (1)

▪ Reported net income was $24.8 million in Q1 2020 and $8.7 million

in Q1 2019

▪ Adjusted net income was $37.5 million in Q1 2020 and $35.2 million

in Q1 2019

▪ Adjusted EBITDA of $83.6 million up 11.0% year over year

▪ Adjusted EBITDA margin up 20 bps year over year

Adj. SG&A ($ mm)

Adj. EBITDA ($ mm)

7.9%

9.4%

(1) For a reconciliation of Adjusted SG&A, Adjusted EBITDA, Adjusted Net Income and Adjusted EBITDA Margin to the most directly comparable GAAP metrics, see Appendix.

$174.1 $191.1

22.4%22.6%

20.0%

20.5%

21.0%

21.5%

22.0%

22.5%

23.0%

$0

$50

$100

$150

$200


Adj. SG&A Adj. SG&A %

$75.3 $83.6

9.7% 9.9%

5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%9.5%10.0%10.5%

$0

$50

$100


Adj. EBITDA Adj. EBITDA Margin

22

Expand Share in Core

Products

Grow Other Products

Platform Expansion

Capitalize on existing fixed investment in

locations and equipment where we’re

underpenetrated or below expected share

in core products

Grow select “Other Product” opportunities

outside of core products to diversify and

profitably expand our product offering

Expand the platform through accretive

acquisition and greenfield opportunities,

balanced with debt reduction priorities

Strategic Growth Priorities

Profitability/ProductivityLeverage our scale and employ

technology and best practices to deliver

further margin expansion

23

Investment Rationale

• North American market leader in specialty distribution of interior construction products

• Significant scale combined with local expertise

• Differentiated service model drives market leadership

• Multiple levers to drive above-market growth

• Capitalizing on large, diverse end markets poised for continued long-term growth

• Entrepreneurial culture with dedicated employees and experienced leadership driving

superior execution

• Proven track record of growth and cash generation

• Attractive capital structure and balanced approach to capital allocation

24

Appendix

25

Net Income (Loss) to Adjusted EBITDA

( $ in 000s) 2019 2018 2017 2016 2015 2014

(Unaudited)

Net Income (loss) 56,002$ 62,971$ 48,886$ $ 12,564 $ (11,697) $ (219,814)

Add: Interest Expense 73,677 31,395 29,360 37,418 36,396 7,180

Add: Write off of debt discount and deferred financing fees - 74 7,103 - - -

Less: Interest Income (66) (177) (152) (928) (1,010) (922)

Add: Income Tax Expense 14,039 20,883 22,654 12,584 (6,626) (240)

Add: Change in fair value of mandatorily redeemable shares - - - - - 200,004

Add: Depreciation Expense 46,456 24,075 25,565 26,667 32,208 16,042

Add: Amortization Expense 71,003 41,455 43,675 37,548 31,957 2,556

EBITDA 261,111$ 180,676$ 177,091$ $ 125,853 $ 81,228 $ 4,806

Adjustments

Executive Compensation (A) - - - - - 2,447

Stock appreciation rights expense (B) 2,730 2,318 148 1,988 2,268 1,368

Redeemable noncontrolling interests (C) 1,188 1,868 3,536 880 1,859 3,028

Equity-based compensation (D) 3,906 1,695 2,534 2,699 6,455 28

AEA transaction related costs (E) - - - - 837 67,964

Severance and other permitted costs (F) 8,152 581 (157) 379 413 -

Transaction costs (acquisition and other) (G) 7,858 3,370 2,249 3,751 1,891 -

Gain on disposal of assets (525) (509) (338) (645) 1,089 (864)

AEA management fee (H) - - 188 2,250 2,250 188

Effects of fair value adjustments to inventory (I) 4,176 324 946 1,009 5,012 8,289

Change in fair value of financial instruments (J) 6,395 6,125 382 - - (192)

Secondary public offerings (K) - 1,525 1,385 19 2,494 -

Debt transaction costs (L) 678 1,285 265 - - -

Total Add-Backs 34,558$ 18,582$ 11,138$ 12,330$ 24,568$ 82,256$

Adjusted EBITDA 295,669$ 199,258$ 188,229$ 138,183$ 105,796$ 87,062$

LTM Sales 3,116,033 2,511,469 2,319,046 1,858,177 1,570,085 1,353,340

EBITDA margin 9.5% 7.9% 8.1% 7.4% 6.7% 6.4%

Reconciliation Commentary

A. Represents non-cash expense related to

stock appreciation rights agreements

B. Represents non-cash compensation

expense related to changes in the values of

noncontrolling interests

C. Represents non-cash equity-based

compensation expense related to the

issuance of share-based awards

D. Represents severance expenses and other

costs permitted in calculations under the

ABL Facility and the First Lien 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 management fees paid to AEA,

which were discontinued after the IPO

G. Represents the non-cash cost of sales

impact of purchase accounting adjustments

to increase inventory to its estimated fair

value

H. Represents mark-to-market adjustments for

derivative financial instruments

I. Represents one-time costs related to our

secondary offerings paid to third party

advisors

J. Represents expenses paid to third party

advisors related to debt refinancing activities

K. Pro forma impact of earnings from

acquisitions from the beginning of the LTM

period to the date of acquisition, including

synergies

26

Historical Cash Flows

($ in millions)

(Unaudited) FY15 FY16 FY17 FY18 FY19

Net income $ (11.7) $ 12.6 $ 48.9 $ 63.0 $ 56.0

Non-cash changes & other changes 79.6 62.2 62.5 63.4 119.3

Changes in primary working capital components:

Trade accounts and notes receivable (11.6) (27.3) (20.4) (11.8) (13.7)

Inventories (4.6) (0.7) (19.3) (34.8) 5.2

Accounts payable (3.7) 1.1 (3.8) 11.4 26.8

Cash provided by (used in) operating activities 48.0 47.7 67.9 91.2 193.6

Purchases of property and equipment (13.9) (7.7) (11.1) (23.7) (18.8)

Proceeds from sale of assets 3.8 9.8 4.0 2.9 1.2

Purchase of financial instruments (4.6) - - - -

Acquisitions of businesses, net of cash acquired (67.7) (120.2) (150.4) (28.3) (583.1)

Cash (used in) investing activities (82.5) (118.0) (157.5) (49.2) (600.7)

Cash provided by (used in) financing activities 14.1 77.1 85.1 (20.2) 419.0

Effect of exchange rates - (1.0)

Increase in cash and cash equivalents (20.4) 6.8 (4.5) 21.8 10.9

Balance, beginning of period 32.7 12.3 19.1 14.6 36.4

Balance, end of period $ 12.3 $ 19.1 $ 14.6 $ 36.4 $ 47.3

Supplemental cash flow disclosures:

Cash paid for income taxes $ 16.1 $ 26.1 $ 49.2 $ 39.0 $ 19.4

Cash paid for interest $ 31.7 $ 34.6 $ 26.4 $ 28.6 $ 66.4

Cash provided by (used in) operating activities $ 48.0 $ 47.7 $ 67.9 $ 91.2 $ 193.6

Purchases of property and equipment (13.9) (7.7) (11.1) (23.7) (18.8)

Free cash flow (1)

34.1 40.1 56.8 67.4 174.8

27

Reported SG&A to Adjusted SG&A





expense related to changes in the values

of noncontrolling interests




D. Represents severance expenses and

other costs permitted in calculations under

the ABL Facility and the First Lien Facility

E. Represents one-time costs related to

acquisitions paid to third parties.

F. Represents costs paid to third-party

advisors related to the secondary public

offering of our common stock

G. Represents expenses paid to third-party

advisors related to debt refinancing

activities

H. Represents SG&A incurred by any

branches that were acquired in the current

fiscal year, prior fiscal year and three

months prior to the start of the prior fiscal

year

(Unaudited) LTM 4Q18 LTM 1Q19 LTM 2Q19 LTM 3Q19 LTM 4Q19

($ in millions)

LTM Reported SG&A 633.9$ 663.2$ 688.6$ 710.5$ 739.5$

LTM Adjustments

Stock appreciation rights (expense) benefit (A) (2.3) (2.1) (2.1) (1.9) (2.7)

Redeemable noncontrolling interests (B) (1.9) (1.5) (1.7) (1.3) (1.2)

Equity-based compensation (C) (1.7) (1.6) (2.3) (3.1) (3.9)

Severance and other permitted costs (D) (0.6) (5.2) (6.0) (6.2) (8.2)

Transaction costs (acquisition and other) (E) (3.4) (8.0) (8.7) (9.7) (7.9)

Gain (loss) on disposal of assets 0.5 0.2 0.2 0.3 0.5

Secondary Public Offering (F) (1.5) (0.9) (0.9) - -

Debt Related Costs (G) (1.3) (1.2) (1.2) (1.2) (0.7)

LTM Adjusted SG&A 621.7$ 643.0$ 666.0$ 687.5$ 715.5$

LTM Revenue 2,511.5$ 2,647.4$ 2,833.3$ 2,971.7$ 3,116.1$

LTM Adjusted SG&A as % of LTM Sales 24.8% 24.3% 23.5% 23.1% 23.0%

28

Net Income (Loss) to Pro Forma Adjusted EBITDA


A. Represents non-cash compensation expenses

related to stock appreciation rights agreements

B. Represents non-cash compensation expense

related to changes in the fair values of


C. Represents non-cash equity-based compensation

expense related to the issuance of share-based

awards

D. Represents non-recurring expenses related

specifically to the AEA acquisition of GMS

E. Represents severance and other costs permitted in

calculations under the ABL Facility and the First

Lien Facility

F. Represents one-time costs related to our initial

public offering and acquisitions (including the

Acquisition) paid to third party advisors, including

fees to financial advisors, accountants, attorneys

and other professionals as well as costs related to

the retirement of corporate stock appreciation rights.

G. Represents management fees paid to AEA, which

were discontinued after the IPO

H. Represents the non-cash cost of sales impact of

purchase accounting adjustments to increase

inventory to its estimated fair value

I. Represents mark-to-market adjustments for certain

financial instruments

J. Represents costs paid to third party advisors related

to the secondary public offerings of our common

stock

K. Represents costs paid to third party advisors related

to debt refinancing activities

L. Pro forma impact of earnings from acquisitions from

the beginning of the LTM period to the date of

acquisition, including synergies

M. Represents the favorable impact to Adjusted

EBITDA related to the amendment of existing GMS

equipment operating leases to capital leases

LTM LTM LTM LTM LTM LTM LTM LTM

( $ in 000s) 4/30/2019 1/31/2019 10/31/2018 7/31/2018 4/30/2018 4/30/2017 4/30/2016 4/30/2015

(Unaudited)

Net Income (loss) 56,002$ 49,296$ 63,167$ 56,278$ 62,971$ 48,886$ $ 12,564 $ (11,697)

Add: Interest Expense 73,677 63,003 51,348 40,083 31,395 29,360 37,418 36,396

Add: Write off of debt discount and deferred financing fees - - - - 74 7,103 - -

Less: Interest Income (66) (127) (161) (390) (177) (152) (928) (1,010)

Add: Income Tax Expense 14,039 17,665 11,735 13,659 20,883 22,654 12,584 (6,626)

Add: Depreciation Expense 46,456 40,121 34,211 28,696 24,075 25,565 26,667 32,208

Add: Amortization Expense 71,003 63,190 55,370 46,811 41,455 43,675 37,548 31,957

EBITDA 261,111$ 233,148$ 215,670$ 185,137$ 180,676$ 177,091$ $ 125,853 $ 81,228

Adjustments

Stock appreciation rights expense (A) 2,730 1,880 2,069 2,062 2,318 148 1,988 2,268

Redeemable noncontrolling interests (B) 1,188 1,276 1,651 1,533 1,868 3,536 880 1,859

Equity-based compensation (C) 3,906 3,056 2,345 1,626 1,695 2,534 2,699 6,455

AEA transaction related costs (D) - - - - - - - 837

Severance and other permitted costs (E) 8,152 6,203 5,981 5,212 581 (157) 379 413

Transaction costs (acquisition and other) (F) 7,858 9,709 8,718 7,964 3,370 2,249 3,751 1,891

Gain (loss) on disposal of assets (525) (273) (206) (240) (509) (338) (645) 1,089

AEA management fee (G) - - - - - 188 2,250 2,250

Effects of fair value adjustments to inventory (H) 4,176 4,177 4,266 4,453 324 946 1,009 5,012

Change in fair value of financial instruments (I) 6,395 11,810 12,086 11,948 6,125 382 - 2,494

Secondary public offerings (J) - - 894 894 1,525 1,385 19 -

Debt transaction costs (K) 678 1,205 1,205 1,189 1,285 265 - -

Total Add-Backs 34,558$ 39,043$ 39,009$ 36,642$ 18,582$ 11,138$ 12,330$ 24,568$

Adjusted EBITDA 295,669$ 272,191$ 254,679$ 221,779$ 199,258$ 188,229$ 138,183$ 105,796$

Contributions from acquisitions (L) 6,717 26,990 42,827 64,321 1,280 9,500 12,093 8,064

Pro Forma Adjusted EBITDA with Acquisitions 302,386$ 299,181$ 297,506$ 286,100$ 200,538$ 197,729$ 150,276$ 113,860$

Conversion of GMS Operating Leases (M) - 6,151 12,039 17,926 - - - -

Pro Forma Adjusted EBITDA 302,386$ 305,332$ 309,545$ 304,026$ 200,538$ 197,729$ 150,276$ 113,860$

29

Net Income to Pro Forma Adjusted EBITDA













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 management fees paid to AEA,

which were discontinued after the IPO

G. Represents the non-cash cost of sales



value

H. Represents mark-to-market adjustments for


I. Represents one-time costs related to our

secondary offerings paid to third party

advisors

J. Represents expenses paid to third party


K. Pro forma impact of earnings from

acquisitions from the beginning of the LTM

period to the date of acquisition, including

synergies

( $ in 000s) 1Q20 LTM 2019 2018 2017 2016

(Unaudited)

Net Income 72,172$ 56,002$ 62,971$ 48,886$ $ 12,564

Add: Interest Expense 75,766 73,677 31,395 29,360 37,418

Add: Write off of debt discount and deferred financing fees - - 74 7,103 -

Less: Interest Income 158 (66) (177) (152) (928)

Add: Income Tax Expense 18,793 14,039 20,883 22,654 12,584

Add: Depreciation Expense 48,268 46,456 24,075 25,565 26,667

Add: Amortization Expense 72,144 71,003 41,455 43,675 37,548

EBITDA 287,301$ 261,111$ 180,676$ 177,091$ $ 125,853

Adjustments

Stock appreciation rights expense (A) 2,456 2,730 2,318 148 1,988

Redeemable noncontrolling interests (B) 1,319 1,188 1,868 3,536 880

Equity-based compensation (C) 4,897 3,906 1,695 2,534 2,699

Severance and other permitted costs (D) 3,870 8,152 581 (157) 379

Transaction costs (acquisition and other) (E) 4,077 7,858 3,370 2,249 3,751

Gain on disposal of assets (560) (525) (509) (338) (645)

AEA management fee (F) - - - 188 2,250

Effects of fair value adjustments to inventory (G) 198 4,176 324 946 1,009

Change in fair value of financial instruments (H) 376 6,395 6,125 382 -

Secondary public offerings (I) - - 1,525 1,385 19

Debt transaction costs (J) 51 678 1,285 265 -

Total Add-Backs 16,684$ 34,558$ 18,582$ 11,138$ 12,330$

Adjusted EBITDA (as reported) 303,985$ 295,669$ 199,258$ 188,229$ 138,183$

Contributions from acquisitions (K) 1,293 6,717 1,280 9,500 12,093

Pro Forma Adjusted EBITDA 305,278$ 302,386$ 200,538$ 197,729$ 150,276$

30

Q1 Net Sales

(1) Organic net sales growth calculation modified to exclude net sales of acquired businesses until first anniversary of acquisition date and impact of foreign currency translation.

($ in millions)

(Unaudited) FY19 FY20 Reported Organic (1)

Organic (1) 778.1$ 804.2$

Acquisitions - 43.8

Fx Impact - (0.8)

Total Net Sales 778.1$ 847.2$ 8.9% 3.4%

Wallboard 317.7$ 341.6$ 7.5% 3.5%

Ceilings 115.9 129.1 11.4% 8.3%

Steel Framing 129.1 131.8 2.1% (0.8%)

Other Products 215.4 244.6 13.6% 3.1%

Total Net Sales 778.1$ 847.2$ 8.9% 3.4%

Fiscal Q1 Variance

31

Prior Period Organic Net Sales Calculation – Prior and

Current Method

(1) Prior Method: Through FY 2019, organic net sales growth calculation excluded net sales of businesses acquired in the current fiscal year, prior fiscal year and three months prior to the start of the prior fiscal year.

(2) Current Method: At beginning of FY 2020, organic net sales growth calculation modified to exclude net sales of acquired businesses until first anniversary of acquisition date and impact of foreign currency translation.

($ in millions)

(Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY

Prior Method (1)

Prior Period

Reported 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6

Acq 6.0 30.8 52.0 56.9 145.7 - 6.1 6.5 8.5 21.1

Organic 543.8 561.1 510.5 558.1 2,173.5 642.2 641.9 579.0 627.4 2,490.4

Current Period

Reported 642.2 648.0 585.5 635.9 2,511.6 778.1 833.8 723.9 780.2 3,116.1

Acq 56.0 58.4 59.1 66.5 239.9 96.9 136.0 106.7 109.2 448.8

Organic 586.2 589.6 526.4 569.4 2,271.7 681.3 697.8 617.2 671.0 2,667.3

Organic Growth % 7.8% 5.1% 2.9% 2.0% 4.5% 6.1% 8.7% 6.6% 7.0% 7.1%

Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY

Current Method (2)

Prior Period

Reported 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6

Acq - - - - - - - - - -

Organic 549.8 591.8 562.5 615.0 2,319.1 642.2 648.0 585.5 635.9 2,511.6

Current Period

Reported 642.2 648.0 585.5 635.9 2,511.6 778.1 833.8 723.9 780.2 3,116.1

Acq 49.7 30.9 7.6 8.5 96.6 96.9 129.6 100.7 101.7 428.8

Organic 592.5 617.1 578.0 627.4 2,415.0 681.3 704.2 623.2 678.6 2,687.3

Organic Growth % 7.8% 4.3% 2.7% 2.0% 4.1% 6.1% 8.7% 6.4% 6.7% 7.0%

FY18 FY19

32

Quarterly Reported SG&A to Adjusted SG&A





expense related to changes in the values

of noncontrolling interests




D. Represents severance expenses and

other costs permitted in calculations under

the ABL Facility and the First Lien Facility


acquisitions paid to third parties.

F. Represents expenses paid to third-party

advisors related to debt refinancing

activities

(Unaudited) 1Q19 2Q19 3Q19 4Q19 FY2019 1Q20

($ in millions)

SG&A - Reported 185.4$ 185.3$ 178.2$ 190.6$ 739.5$ 194.6$

Adjustments

Stock appreciation rights (expense) benefit (A) (0.3) (0.6) (0.4) (1.3) (2.7) (0.1)

Redeemable noncontrolling interests (B) (0.5) (0.3) 0.0 (0.4) (1.2) (0.7)

Equity-based compensation (C) (0.4) (1.1) (1.1) (1.3) (3.9) (1.4)

Severance and other permitted costs (D) (4.8) (0.9) (0.2) (2.2) (8.2) (0.6)

Transaction costs (acquisition and other) (E) (4.8) (0.8) (1.1) (1.2) (7.9) (1.0)

Gain (loss) on disposal of assets 0.1 0.2 0.1 0.1 0.5 0.2

Debt Related Costs (F) (0.6) (0.1) - - (0.7) -

SG&A - Adjusted 174.1$ 181.6$ 175.5$ 184.3$ 715.5$ 191.1$

% of net sales 22.4% 21.8% 24.2% 23.6% 23.0% 22.6%

33

Quarterly Net Income to Adjusted EBITDA














acquisitions paid to third parties

F. Represents the non-cash cost of sales



value

G. Represents mark-to-market adjustments for


H. Represents expenses paid to third-party


( $ in 000s) 1Q19 2Q19 3Q19 4Q19 FY19 1Q20

(Unaudited)

Net Income 8,650$ 24,912$ 5,815$ 16,625$ 56,002$ 24,820$

Add: Interest Expense 16,188 19,182 19,526 18,781 73,677 18,277

Less: Interest Income (236) 203 (10) (23) (66) (12)

Add: Income Tax Expense (Benefit) 2,836 8,059 1,442 1,702 14,039 7,590

Add: Depreciation Expense 10,610 11,538 11,919 12,389 46,456 12,422

Add: Amortization Expense 15,712 19,249 18,301 17,741 71,003 16,853

EBITDA 53,760$ 83,143$ 56,993$ 67,215$ 261,111$ 79,950$

Adjustments

Stock appreciation rights expense (A) 334 649 442 1,305 2,730 60

Redeemable noncontrolling interests (B) 531 282 (35) 410 1,188 662

Equity-based compensation (C) 404 1,094 1,140 1,268 3,906 1,395

Severance and other permitted costs (D) 4,836 882 229 2,205 8,152 554

Transaction costs (acquisition and other) (E) 4,753 841 1,066 1,198 7,858 972

(Gain) loss on disposal of assets (121) (173) (118) (113) (525) (156)

Effects of fair value adjustments to inventory (F) 4,129 - - 47 4,176 151

Change in fair value of financial instruments (G) 6,019 376 - - 6,395 -

Debt transaction costs (H) 627 51 - - 678 -

Total Add-Backs 21,512$ 4,002$ 2,724$ 6,320$ 34,558$ 3,638$

Adjusted EBITDA (as reported) 75,272$ 87,145$ 59,717$ 73,535$ 295,669$ 83,588$

34

Q1 2020 Income Before Taxes to Adjusted Net Income


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 the acquisition of Titan.

B. Normalized cash tax rate determined based on our estimated taxes for fiscal 2020

excluding the impact of purchase accounting and certain other deferred tax

amounts.

C. Includes the effect of 1.1 million shares of equity issued in connection with the

acquisition of Titan that were exchangeable for the Company’s common stock as

of April 30, 2019.

($ in 000s) 1Q20 1Q19

(Unaudited)

Income before taxes 32,410$ 11,486$

EBITDA add-backs 3,638 21,512 Purchase accounting depreciation and amortization (A) 12,385 12,455

Adjusted pre-tax income 48,433 45,453 Adjusted income tax expense 10,897 10,227

Adjusted net income 37,536 35,226

Effective tax rate (B) 22.5% 22.5%

Weighted average shares outstanding:

Basic 41,001 41,094 Diluted (C) 42,148 43,203

Adjusted net income per share:

Basic 0.92$ 0.86$

Diluted 0.89$ 0.82$

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