GMS Stock

GMS Inc., through its subsidiaries, distributes wallboard, ceilings, steel framing and complementary construction products.

The company also operates more than 100 tool sales, rental and service centers. Through these operations, the company provides a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across the United States and Canada. The company’s unique operating model combines the benefits of a national platform and strategy with a local go-to-market focus, enabling it to generate significant economies of scale while maintaining high levels of customer service.

The company has grown its business from a single location to various branches and tool sales, rental and service centers across 47 U.S. states and six Canadian provinces through a combination of strategic acquisitions and organic growth, including the opening of new branches (greenfields) and tool sales, rental and service centers. Underpinning that growth is the company’s entrepreneurial culture, which both enables the company to drive organic growth by delivering outstanding customer service and makes it an attractive acquirer for smaller distributors.

On June 1, 2022, the company acquired certain assets of Construction Supply of Southwest Florida, Inc., a distributor of various stucco, building and waterproofing supplies serving markets in the southwest Florida area. On December 30, 2022, the company acquired certain assets of Tanner Bolt and Nut, Inc., a distributor of various tools, fasteners, sealants, and related construction products to the broader New York City market.

On April 3, 2023, the company acquired certain assets of Blair Building Materials, Inc., a distributor of exterior, insulation, and waterproofing products to customers in the Greater Toronto Area. Also on April 3, 2023, the company acquired Engler, Meier and Justus, Inc., a leading distributor of drywall, acoustical ceilings and related interior construction products to the greater Chicago market and exterior insulation finishing systems (EIFS) related products in the Southeastern United States.

Business Strategy

The key elements of the company’s business strategy are to expand core products; grow complementary products; and expand its platform.

Products

The company provides a comprehensive product offering of wallboard, ceilings, steel framing and complementary construction products. By carrying a full line of wallboard and ceilings along with steel framing and complementary products, the company serves as a one-stop-shop for its customers.

Wallboard

Wallboard is one of the most widely used building products for interior and exterior walls and ceilings in residential and commercial structures due to its low cost, ease of installation and superior performance in providing comfort, fire resistance, thermal insulation, sound insulation, mold and moisture resistance, impact resistance, aesthetics and design elements. Wallboard is sold in panels of various dimensions, suited to various applications. In commercial and institutional construction projects, architectural specifications and building codes provide requirements related to the thickness of the panels and, in some cases, other characteristics, including fire resistance. In addition, there are wallboard products that provide some additional value in use. These include lighter weight panels, panels with additional sound insulation, and panels coated to provide mold and moisture resistance. In addition to the interior wallboard products described above, exterior sheathing is a water-resistant wallboard product designed for attachment to exterior sidewall framing as an underlayment for various exterior siding materials. Wallboard demand is driven by a balanced mix of both residential and commercial new construction as well as repair and remodeling (R&R) activity.

Ceilings

The company’s ceilings product line consists of suspended mineral fiber, soft fiber and metal ceiling systems primarily used in offices, hotels, hospitals, retail facilities, schools and a variety of other commercial and institutional buildings. The principal components of the company’s ceiling systems are typically square mineral fiber tiles and the metal grid that holds the tile in place, complemented by architectural specialty products in certain applications. Architectural specialty ceiling products, which are made from a variety of materials, are a growing component of the company’s product offering given their specified, often customized nature and its ability to service customer requirements through a dedicated and experienced sales force focused on such products.

The company’s ceilings product line is primarily sold into commercial and institutional applications. Because interior contractors frequently purchase ceilings and wallboard from the same distributor, the breadth of its offerings serves to increase sales of all of its product lines, which are often delivered together to the same worksite as part of a commercial package. In the ceilings market, brand is highly valued and often specified by the architect of a commercial building. Because of its strong market position, the company has exclusive access to the leading ceilings brands in many of its local markets. In addition, because ceiling tile systems differ in size, shape, performance characteristics and aesthetic appeal between manufacturers, they often can only be replaced with the same brand for R&R projects.

Steel Framing

The company’s steel framing product line consists of steel track, studs and the various other steel products used to frame the interior walls of a commercial or institutional building. Typically, the contractor who installs the steel framing also installs the wallboard, and the two products, along with ceilings, insulation and complementary products are sold together as part of a commercial package. Most of the company’s steel framing products are sold for use in commercial buildings.

Complementary Products

The company offers its customers complementary products, including tools and fasteners, insulation, EIFS and stucco, lumber and other wood products, ready-mix joint compound and safety products. The company partners with leading vendors for many of these products and merchandise them in showrooms that are adjacent to many of its warehouses or free-standing, in the case of its Ames tool sales, rental and service centers. In addition, certain products are provided on a regional basis to address local preferences. The company’s customers value its product breadth and geographic reach, as well as its delivery capabilities and on-site expertise and consultation services.

The company is a leading provider of automatic taping and finishing (ATF) tools and related products to the professional drywall finishing industry. ATF tools enable interior finishing contractors to finish drywall joints faster than less productive hand finishing methods.

Markets

The company’s addressable commercial construction market consists of a variety of commercial and institutional sub-segments with varying demand drivers. The company’s commercial markets include offices, hotels, retail stores, warehouses and other commercial buildings, while its institutional markets include educational facilities, healthcare facilities, government buildings and other institutional facilities.

Distribution

The company distributes its core products and most complementary products through its distribution centers. The company distributes ATF tools and related tools and products through its tool sales, rental and service centers and an independent network of wholesale dealers. The company also distributes its products through e-commerce platforms.

The company serves as a critical link between its suppliers and its fragmented customer base. The company’s sales, dispatch and delivery teams coordinate an often complicated, customized delivery plan to ensure that its delivery schedule matches the customer’s job site schedule, that deliveries are made taking into account the specific challenges of a customer’s job site, that no damage occurs to the customer’s property and, most importantly that proper safety procedures are followed at all times. Often this requires the company to send an employee to a job site before the delivery to document the specific requirements and safety considerations of a particular location. Given the logistical intensity of this process and the premium contractors place on distributors delivering the right product, at the right time, in the right place, the company can differentiate ourselves based on service. In addition to executing a logistics-intensive service, the company facilitates purchasing relationships between suppliers and its customer base by transferring technical product knowledge, educating contractors on proper installation techniques for new products, ensuring local product availability and extending trade credit.

Additionally, based on certain unique product attributes and delivery requirements for some of the company’s products, the distribution of these items requires a higher degree of logistics and service expertise than most other building products. For example, wallboard has a high weight-to-value ratio, is easily damaged, cannot be left outside and often must be delivered to a job site before or after normal business hours. As a value-added service, the company often delivers its products directly to the specific room where they are installed. For example, it can place the amount and type of wallboard necessary for a fifth story room of a new building through the fifth story window using a specialized truck with an articulating boom loader. To do this effectively, the company need to load the truck at the branch so that the amount and type of wallboard for each room of the building can be off-loaded by the articulating boom loader in the right sequence. In this way, the service the company provides delivers significant value to its customers.

Customers

The company has a diversified portfolio of customers across the United States and Canada that includes professional contractors and homebuilders. The company’s customers vary in size, ranging from small contractors to large contractors and builders that operate on a national scale. The company maintains local relationships with its contractors through its network of branches and its extensive salesforce. The company also serves its large homebuilder customers through its local branches, but often coordinate the relationships on a national basis through its corporate facility. The company’s ability to serve multi-regional homebuilders across their footprints.

Sales and Marketing

The company has an experienced sales force who manages its customer relationships and grows its customer base. The company markets its products through its websites, social media, targeted advertisements and a range of industry trade shows.

Competition

The company’s largest competitors are Foundation Building Materials, L&W Supply Co. Inc (a subsidiary of ABC Supply Company), Home Depot and Lowe's.

Seasonality

Generally, the company’s sales volume is higher in the first and second quarters of its fiscal year (year ended April 30, 2023) due to favorable weather and longer daylight conditions during these periods.

Intellectual Property

The company owns numerous intellectual property rights that it uses in its business, including trademarks, tradenames, domains and patents. The company maintains registered trademarks for the trade names and logos used by certain of its local branches, including Ames stores and TapeTech products. The company also holds patents that relate to the design of its ATF tools.

History

GMS Inc. was founded in 1971. The company was incorporated in 2013.