March 2020
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 strategic growth priorities, and statements
about growth potential across the Company’s business and the ability to deliver growth and value creation and cash generation contained in this presentation are forward-
looking statements. 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 executive management transitions; variations in the performance of the financial markets, including the credit markets; the risk that acquisitions will not be
integrated successfully; the risk of customer attrition; our ability to efficiently manage and control our costs; 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
• 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
• Enterprise Value: $2.2 billion
• Founded in 1971
• 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
* 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 provides a complementary
and complete product offering
with value-added service delivery
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
• Fasteners
Description
Products
Core Offering Complementary
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 and ceiling distribution channels
- Neither big boxes nor lumberyards want to make the investment in required capital-intensive specialized equipment, which limits
their addressable market
- 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 provides for 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
• Repair & Remodel
• Commercial
• New Construction
• Repair & Remodel
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
measure, see Appendix.
Significant growth achieved over the past 5 years through a combination of acquisitions,
greenfield openings and market share gains, coupled with margin expansion through
synergy realization and increased operational effectiveness and efficiencies
12
$34 $40$57
$68
$140
$35
32.1%29.0% 30.3%
34.2% 47.3%
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.
• Target Free Cash Flow* as % of Adj. EBITDA* is 40 – 45% in FY 2020 (FY 2019 included ~$35 million increase in
accounts payable not expected to recur)
• Priorities for Free Cash Flow* include debt repayment and selective acquisitions
Non-Recurring
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
measure, see Appendix.
5 Year CAGR through FY 2019:
Net Sales - 18.2%
Adj. EBITDA* - 27.7%
South Central
Texas
Central Midwest
Gulf Coast
14
GMS has a significant opportunity to expand its geographic footprint in under-served and under-penetrated markets
through accretive greenfields and acquisitions
• Current footprint
comprises 259
locations covering 43
U.S. States and 5
Canadian Provinces
• At least some level of
market presence in
69 of the Top 100
U.S. Metropolitan
Statistical Areas
(“MSA’s”) and 13 of
the Top 25 Canadian
Metropolitan Areas
(“CMA’s)
• Significant
whitespace and
underpenetrated
markets remaining
in both the U.S. and
Canada
• Opportunities to
develop “Other
Products” in
markets where GMS
already has an
established
presence to drive
further share gains
Opportunity to Further Expand
Map Legend
- GMS Location as of Dec-19
- Targeted Expansion Area
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
July-19: Greenfield Expansion in Manchester, NH
5
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 31
companies
representing a total of
96 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
Date
Expansion
Type Acquisition/Greenfield Locations Strategic Rationale
Nov-19 Acquisition ▪ Kingston, ON
▪ Expands Titan’s footprint further into the Eastern Ontario market with a
strategic location in Kingston, ON, where Titan does not currently have
a facility within 85 km
▪ Joins existing Watson Building Supplies platform (6 locations in
Southern Ontario)
Nov-19 Greenfield Cambridge, ON ▪ Cambridge, ON
▪ Additional market density in Cambridge / Kitchener / Guelph, ON metro
area
▪ Highly complementary footprint relative to existing platform, adds much
needed market coverage in Cambridge / Kitchener / Guelph where
majority of business was serviced via Burlington, ON located ~50KM to
southwest
Apr-19 Greenfield Wilsonville, OR ▪ Wilsonville, OR
▪ Additional market density in Portland-Vancouver-Hillsboro, OR-WA
metro area
▪ Highly complementary footprint relative to existing platform, adds much
needed market coverage in southern Portland
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)
17
US Non-Residential Spending ($MM)US Housing Starts
CAN Non-Residential Spending ($MM)Canada Housing Starts
~15% of
GMS
Sales
~85% of
GMS
Sales
Source: U.S. Census Bureau, Bloomberg and CIBC World Markets Inc. US Housing starts 2019E and 2020E estimates are taken from
average projections of Fannie Mae, Fannie Mac, Mortgage Bankers Association and NAHB.
Construction End Markets Outlook
18
Operating Leverage Opportunity
◼ North American scale, local market leadership, differentiated operating platform and value-added services drive
industry-leading margins
◼ Positioned to benefit from operating leverage and operational excellence initiatives
◼ Some near-term headwinds from lower selling prices and inflationary cost pressures
◼ Making additional investments in business initiatives to drive growth and productivity
$2,511
$2,647
$2,833
$2,972
$3,116
$3,185$3,213
$3,251
24.8%
24.3%
23.5%
23.1%23.0% 23.0%
23.2%
23.5%
22%
23%
23%
24%
24%
25%
25%
$2,000
$2,200
$2,400
$2,600
$2,800
$3,000
$3,200
$3,400
LTM Q4 18 LTM Q1 19 LTM Q2 19 LTM Q3 19 LTM Q4 19 LTM Q1 20 LTM Q2 20 LTM Q3 20
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
$ MM
19
Attractive Capital Structure
Net Debt / LTM PF Adjusted EBITDA*
4.3x
2.9x 2.8x
4.2x
3.8x 3.8x3.6x 3.7x
3.5x3.3x
3.0x
2016 2017 2018 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Near-TermObjective
$11$48 $45 $39 $30
$908
2020 2021 2022 2023 2024 Thereafter
Debt** Maturity Schedule as of Q3 2020
($ 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 $41 million of cash on hand and an additional $425 million available under
our ABL Facilities as of 1/31/2020
• First Lien Term Loan (~85% of total long term debt) does not mature until 2025
• Moody’s and Standard & Poors current ratings of B1 and BB- respectively
20
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
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
ProfitabilityLeverage our scale and employ
technology and best practices to deliver
further margin expansion
21
Investment Rationale
• A 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
Appendix
23
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
24
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
25
Reported SG&A to Adjusted SG&A
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
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 LTM 1Q20 LTM 2Q20 LTM 3Q20
($ in millions)
LTM Reported SG&A 633.9$ 663.2$ 688.6$ 710.5$ 739.5$ 748.7$ 763.8$ 779.0$
LTM Adjustments
Stock appreciation rights (expense) benefit (A) (2.3) (2.1) (2.1) (1.9) (2.7) (2.5) (3.1) (2.3)
Redeemable noncontrolling interests (B) (1.9) (1.5) (1.7) (1.3) (1.2) (1.3) (1.0) (0.7)
Equity-based compensation (C) (1.7) (1.6) (2.3) (3.1) (3.9) (4.9) (6.1) (6.4)
Severance and other permitted costs (D) (0.6) (5.2) (6.0) (6.2) (8.2) (3.9) (4.4) (4.6)
Transaction costs (acquisition and other) (E) (3.4) (8.0) (8.7) (9.7) (7.9) (4.1) (3.6) (2.9)
Gain (loss) on disposal of assets 0.5 0.2 0.2 0.3 0.5 0.6 1.0 1.0
Secondary Public Offering (F) (1.5) (0.9) (0.9) - - - (0.4) (0.4)
Debt Related Costs (G) (1.3) (1.2) (1.2) (1.2) (0.7) (0.1) - -
LTM Adjusted SG&A 621.7$ 643.0$ 666.0$ 687.5$ 715.5$ 732.5$ 746.3$ 762.7$
LTM Revenue 2,511.5$ 2,647.4$ 2,833.3$ 2,971.7$ 3,116.1$ 3,185.2$ 3,213.3$ 3,250.7$
LTM Adjusted SG&A as % of LTM Sales 24.8% 24.3% 23.5% 23.1% 23.0% 23.0% 23.2% 23.5%
26
Net Income (Loss) to Pro Forma Adjusted EBITDA
Reconciliation Commentary
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
noncontrolling interests
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$
27
Net Income to Pro Forma Adjusted EBITDA
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
( $ in 000s) 3Q20 LTM 2Q20 LTM 1Q20 LTM 2019 2018 2017 2016
(Unaudited)
Net Income 81,462$ 76,398$ 72,172$ 56,002$ 62,971$ 48,886$ $ 12,564
Add: Interest Expense 71,091 74,143 75,766 73,677 31,395 29,360 37,418
Add: Write off of debt discount and deferred financing fees 707 707 - - 74 7,103 -
Less: Interest Income (49) (51) 158 (66) (177) (152) (928)
Add: Income Tax Expense 20,035 18,661 18,793 14,039 20,883 22,654 12,584
Add: Depreciation Expense 50,333 49,322 48,268 46,456 24,075 25,565 26,667
Add: Amortization Expense 68,012 69,821 72,144 71,003 41,455 43,675 37,548
EBITDA 291,591$ 289,001$ 287,301$ 261,111$ 180,676$ 177,091$ $ 125,853
Adjustments
Stock appreciation rights expense (A) 2,285 3,074 2,456 2,730 2,318 148 1,988
Redeemable noncontrolling interests (B) 736 1,019 1,319 1,188 1,868 3,536 880
Equity-based compensation (C) 6,443 6,118 4,897 3,906 1,695 2,534 2,699
Severance and other permitted costs (D) 5,853 4,382 3,870 8,152 581 (157) 379
Transaction costs (acquisition and other) (E) 2,931 3,563 4,077 7,858 3,370 2,249 3,751
Gain on disposal of assets (985) (973) (560) (525) (509) (338) (645)
AEA management fee (F) - - - - - 188 2,250
Effects of fair value adjustments to inventory (G) 508 198 198 4,176 324 946 1,009
Change in fair value of financial instruments (H) - - 376 6,395 6,125 382 -
Secondary public offerings (I) 363 363 - - 1,525 1,385 19
Debt transaction costs (J) - - 51 678 1,285 265 -
Total Add-Backs 18,134$ 17,744$ 16,684$ 34,558$ 18,582$ 11,138$ 12,330$
Adjusted EBITDA (as reported) 309,725$ 306,745$ 303,985$ 295,669$ 199,258$ 188,229$ 138,183$
Contributions from acquisitions (K) 1,635 905 1,293 6,717 1,280 9,500 12,093
Pro Forma Adjusted EBITDA 311,360$ 307,650$ 305,278$ 302,386$ 200,538$ 197,729$ 150,276$
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