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America’s Mayors Sound the Alarm on Long-Term Impacts of COVID-19 Pandemic on their Cities, According to New Survey

Without Federal Support, Mayors Expect School Budget Cuts, Economic Upheaval for Small Businesses and Commercial Centers, and Deepening Racial Inequality

Findings Among Those From the Boston University Initiative on Cities’ Menino Survey of Mayors

BOSTON–(BUSINESS WIRE)–
As leaders in Washington continue to be divided over additional stimulus, America’s mayors paint a troubling picture for the future of their cities in the aftermath of the COVID-19 pandemic, according to this year’s Menino Survey of Mayors, the only national representative survey of America’s mayors conducted annually by Boston University’s Initiative on Cities.

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Most alarmingly, mayors cite the impact on schools as a top long-term concern. Nearly half of mayors expect to see “dramatic” cuts to public school budgets, more than any other budget item presented, despite the unprecedented adverse impact the pandemic has had on K-12 learning throughout the country. And while a slight majority of mayors believes public schools will “return to normal” in 2021, nearly half expect it will take even longer.

Mayors are also pessimistic about the future of small businesses in their cities, especially those owned by or that serve non-white communities. Only around one-third expect small businesses that closed due to the COVID-19 economy will be quickly replaced by new ones – signaling the possibility of a dramatic upheaval to the local small business landscape. Two-thirds of mayors fear non-white small business owners will be feeling a lot of economic harm into next summer, while half believe the same to be the case for white small business owners.

“In the seven years of conducting the Menino Survey of Mayors, one of the most consistent findings, no matter the question topic, is a general sense of optimism among our cities’ leaders,” said Graham Wilson, Director of Boston University’s Initiative on Cities. “This year, while we still hear glimmers of optimism, their pessimism in the face of a once-in-a-century pandemic is palpable. And with the pandemic still spreading and the federal government still unable to come to an agreement on additional stimulus, we suspect mayors may actually be underestimating just how much their cities will change.”

Among all their constituent groups, mayors are most worried about the long-term economic impact on communities already suffering from structural racism and inequality: roughly two in three said that Latinos, renters, immigrants, and Black residents would still be feeling at least “a lot” of economic harm from COVID-19 next summer. Additionally, over 80% of mayors expect racial health disparities to widen in the future – they do not expect the attention COVID-19 is bringing to the issues to lead to progress.

“The long-term implications of the pandemic and the nation’s continued struggles with racial injustice are unknown but will no doubt be profound – especially for cities,” said Jamie Alderslade, Director of Impact and Insights for Citi Community Investing and Development and an Initiative on Cities Advisory Board Member. “This year’s Menino Survey is essential reading with valuable new insights from mayors on racial equity, Covid-19, investment in public services, and the very future of America’s cities themselves.”

“The COVID-19 pandemic has caused a level of economic devastation that has upended many lives, and Black, Indigenous People of Color (BIPOC) continue to face the brunt of this crisis,” said Otis Rolley III, senior vice president of The Rockefeller Foundation’s U.S. Equity and Economic Opportunity Initiative. “The country’s persistent racial inequities have only become worse, and in response, we need to see innovative, transformative solutions that center impacted communities. Mayors are at the forefront of creating change across America’s cities, and the 2020 Menino Survey of Mayors provides the necessary insight needed to pinpoint and address specific challenges brought on by the pandemic.”

While additional economic stimulus from the federal government remains in limbo, mayors overwhelmingly agree that even the previous stimulus funding through the CARES Act was not enough to address the needs of their cities. Only 13% of mayors believe these programs provided enough support to match the needs of their cities’ small businesses, while nearly half said there was a “large gap” between what was made available and what was needed. In response to an open-ended question about the ways in which mayors can best protect vulnerable small businesses—without additional federal or state support—they most often discussed the creation of new grants (36%) and loans (28%), along with regulatory relief (30%).

“Our residents and businesses have made tremendous sacrifices throughout this pandemic, and as our collective response and recovery continues, we are very focused on how we ensure everyone makes it to the other side,” said DC Mayor Muriel Bowser. “This virus has laid bare long-standing inequities, and as the survey shows, mayors are leading from the frontlines to protect their communities. But cities and states can’t do it alone; we need a strong and cohesive federal response that addresses the health crisis, the economic crisis, and the disparities this pandemic has exacerbated.”

Nearly all mayors expect COVID-19 to permanently change some resident behaviors like working from home and shopping at stores: 90% expect the shift toward remote work to persist even after a vaccine is available and 60% expect a permanent reduction in in-person retail shopping. Accordingly, they are fearful of the hollowing out of their city centers, with 60% of mayors agreeing that downtown office buildings will become “less desirable” and 40% expecting less transit use in the future. Very few expect shops, restaurants, or transit to return to normal until at least next year, and over one third pushed normalcy back beyond that for each.

“COVID-19 has forced us to rethink what we’re doing and how we’re doing it, and it isn’t over,” said Mesa Mayor John Giles. “The Survey shows some of the ways mayors have been tackling the immediate crisis—imploring our constituents to mask up, creating small business support programs, and offering eviction and foreclosure prevention efforts. But we also have an eye down the road. We need to act now to keep people in their homes and keep businesses running if we’re to have vibrant cities in the years and months ahead.”

Mayors did express support (with some polarization) for potential state and federal policies related to the social safety net and the economic fallout from COVID-19. The single most popular policy was residential eviction moratoriums, supported by 80% of mayors. Three in four mayors support a $15 minimum wage and paid sick leave, while three in five support Medicare for All. Their responses to these policies largely reflect the national divides on them: 90% of Democratic mayors support universal paid sick leave, while 27% of Republicans expressed support. The partisan splits for a $15 minimum wage and Medicare for All were similar. Another key finding includes unified support of vote-by-mail, with 91% of mayors in favor of it. This includes 98% of Democrats and 71% of Republican mayors.

The survey, named after the late Mayor of Boston Thomas Menino and supported by Citi and The Rockefeller Foundation, is an annual project to understand the most pressing needs and policy priorities of America’s mayors from large and mid-size (over 75,000 residents) cities. In total, 130 mayors from 38 states were interviewed throughout the summer of 2020, providing a representative sample of mayors and cities nationally. Additional findings from the 2020 Survey – related to policing and protests and parks and greenspace – will be released as separate reports in the coming months.

The full findings report on COVID-19 recovery and implications can be found here.

About the Initiative on Cities

The Boston University Initiative on Cities catalyzes the social, natural, computational and health sciences to conduct research in, on and with cities in pursuit of sustainable, just, and inclusive urban transformation. Founded by a proven urban leader, the late Mayor of Boston Thomas Menino, and a highly regarded academic, Professor Graham Wilson, the Initiative serves as a bridge between academic research and the real-life practice of city governance. Additional information may be found at www.bu.edu/ioc and at www.surveyofmayors.com.

About Citi

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

About The Rockefeller Foundation

The Rockefeller Foundation advances new frontiers of science, data, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on Twitter @RockefellerFdn.

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Media Contacts:

Stacy Fox, [email protected] and (617) 358-8086

Stephanie Hyon, [email protected] and (212) 816-3397

Ashley Chang, [email protected] and (212) 852-8451

KEYWORDS: Massachusetts United States North America Canada

INDUSTRY KEYWORDS: Primary/Secondary Education Public Policy/Government State/Local Health Infectious Diseases University

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Piedmont Receives Key Permit for Chemical Operations

• Title V Air Permit has been issued by the North Carolina Department of Environmental Quality
• The air permit allows for the construction and operations of planned 22,700 t/y lithium hydroxide plant
• The permit was applied for and approved within the Company’s announced timetable
• Piedmont is now the only US greenfield lithium project to hold all federally regulated permits

NEW YORK–(BUSINESS WIRE)–Piedmont Lithium Limited (“Piedmont” or “Company”) is pleased to announce that it has received from the North Carolina Department of Environmental Quality (“NCDEQ”) Division of Air Quality (“DAQ”) the air permit (“Permit”) to construct and operate the Company’s planned 22,700 t/y lithium hydroxide chemical plant located in Kings Mountain, North Carolina.

The Permit defines the allowable limits for the construction and operations of emission sources as well as the construction and operation of air cleaning equipment to be used in the operation of the planned facilities. DAQ issued the Permit approval following a detailed review of Piedmont’s permit application submitted in October 2020. Receipt of the construction and operations air Permit for the Company’s planned chemical plant represents a significant milestone in the development of Piedmont’s proposed integrated lithium hydroxide business in North Carolina. HDR Engineering’s Charlotte Office acted as lead consultant in the preparation of the Company’s air permit application.

Combined with the Section 404 Standard Individual Permit received in November 2019 from the US Army Corps of Engineers for the Company’s planned concentrate operations, Piedmont now holds all of the federally-regulated permits required for the construction of the integrated project. The Company expects to apply for a North Carolina State Mining Permit and to complete local rezoning processes for the integrated project in the first half of 2021.

Keith D. Phillips, President and Chief Executive Officer, commented: “Securing our Title V Air Permit represents a major milestone for our integrated lithium hydroxide business, and we are very pleased to have received this authorization. Our project is unique in being the only spodumene-to-hydroxide project in the United States, and together with our previously received federal permit for our concentrate operations now also stands out as the most advanced American lithium project. We are very excited about the important milestones ahead of us as we look to deliver a DFS for a fully permitted integrated project next year.”

Click here to view the full ASX Announcement.

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Keith Phillips

President & CEO

+1 973 809 0505

[email protected]

Tim McKenna

Investor and Government Relations

+1 732 331 6457

[email protected]

KEYWORDS: North Carolina New York Ireland Australia/Oceania United States United Kingdom North America Australia Europe

INDUSTRY KEYWORDS: Commercial Building & Real Estate Construction & Property Natural Resources Environment Other Manufacturing Chemicals/Plastics Mining/Minerals Manufacturing

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GMS Reports Second Quarter Fiscal 2021 Results

Focused Execution Results in Solid Performance Despite Ongoing COVID-19 Market Pressure

TUCKER, Ga.–(BUSINESS WIRE)–
GMS Inc. (NYSE: GMS), a leading North American specialty distributor of interior building products, today reported financial results for the second quarter of fiscal 2021 ended October 31, 2020.

Second Quarter Fiscal 2021 Highlights

(Comparisons are to the second quarter of fiscal 2020, except where noted.)

• Net sales of $812.9 million decreased 5.7%; organic net sales decreased 6.4%. On a per day basis, net sales and organic net sales declined 4.2% and 5.0%, respectively.
• Net income of $28.5 million, or $0.66 per diluted share; adjusted net income of $40.2 million, or $0.93 per diluted share.
• SG&A and Adjusted SG&A as a percentage of sales were 23.2% and 22.5%, representing 10 and 20 basis points of improvement, respectively.
• Adjusted EBITDA of $82.5 million, or 10.2% of sales, compared to $89.9 million, or 10.4% of sales.
• The Company opened one new greenfield location during the second quarter of fiscal 2021.
• Net debt leverage was 3.0 times as of the end of the second quarter of fiscal 2021.
• Cash provided by operating activities and free cash flow totaled $39.8 million and $32.7 million, respectively.
• As of October 31, 2020, the Company had cash on hand of $118.2 million, and $415.4 million of available liquidity under its revolving credit facilities.

“Outstanding execution by our entire team enabled us to generate solid second quarter results, with net sales levels exceeding our earlier expectations,” said John C. Turner, Jr., President and Chief Executive Officer. “The overall operating environment remained challenged throughout the period, particularly with respect to commercial construction, although we realized benefits from the strong residential market. A disciplined alignment of our cost structure to current demand enabled us to improve SG&A and Adjusted SG&A as a percentage of sales while maintaining a relentless focus on serving our customers. Additionally, we continued to advance our strategic growth initiatives in the second quarter, as evidenced by the opening of a new greenfield location and generating yet another quarter of positive sales growth in our complementary Other products category, despite the difficult market conditions.”

Turner continued, “Looking ahead, the safety of our employees, customers and communities remains our top priority. I am confident in our team’s ability to continue to leverage opportunities, address challenges and ensure that GMS remains well-positioned to generate value for our shareholders.”

Second Quarter Fiscal 2021 Results

Net sales for the second quarter of fiscal 2021 were $812.9 million, down 5.7%, compared to $861.9 million for the second quarter of the prior fiscal year, as a result of continued COVID-19 related market declines. Organic net sales declined 6.4%.

• Wallboard sales of $330.5 million decreased 5.7% (down 6.0% on an organic basis) compared to the second quarter of fiscal 2020, principally due to a decline in mix, volume and, to a lesser extent, price.
• Ceilings sales of $111.3 million decreased 9.4% (down 9.5% on an organic basis) year over year driven by lower volume partially offset by higher price/mix.
• Steel framing sales of $111.3 million decreased 18.3% (down 18.6% on an organic basis) year over year due to a decline in both volumes and price/mix.
• Other product sales of $259.8 million increased 2.9% (up 1.2% on an organic basis) year over year due to positive contributions from acquisitions and execution of strategic growth initiatives.

There was one less selling day in the second quarter of fiscal 2021 than the same period a year ago. Net sales and organic net sales on a per day basis declined 4.2% and 5.0%, respectively.

Year over year sales declines were more pronounced in ceilings and steel framing, as these product categories are tied primarily to commercial construction which remained challenged during the quarter.

Gross profit of $265.1 million decreased 6.8% compared to the second quarter of fiscal 2020 primarily due to lower sales. Gross margin of 32.6% declined 40 basis points year over year principally due to challenging mix dynamics, particularly in the commercial segment.

Selling, general and administrative (“SG&A”) expense as a percentage of net sales was 23.2% for the quarter compared to 23.3% in the second quarter of fiscal 2020. Adjusted SG&A expense as a percentage of net sales was 22.5% compared to 22.7% in the prior year quarter. This 20 basis point improvement resulted from ongoing actions to align the Company’s cost structure with the current demand environment resulting from the COVID-19 pandemic. This SG&A leverage was realized despite deflationary price and unfavorable mix impacts with certain of the Company’s products.

Net income of $28.5 million, or $0.66 per diluted share, compared to $29.1 million, or $0.68 per diluted share, in the second quarter of the prior fiscal year. Adjusted net income of $40.2 million, or $0.93 per diluted share, compared to $42.7 million, or $1.00 per diluted share, in the second quarter of the prior fiscal year. Adjusted EBITDA of $82.5 million compared to $89.9 million in the second quarter of the prior fiscal year. Adjusted EBITDA margin of 10.2% compared to 10.4% a year ago.

Platform Expansion Activity

During the second quarter of fiscal 2021, the Company opened a new greenfield location in Hillsboro, Oregon.

Balance Sheet and Liquidity

As of October 31, 2020, the Company had cash on hand of $118.2 million, total debt of $996.0 million and $415.4 million of available liquidity under its revolving credit facilities. Net debt leverage was 3.0 times as of the end of the quarter, equal to that at the end of the first quarter of fiscal 2021, and down from the 3.5 times as of the end of the second quarter of fiscal 2020. The Company generated cash provided by operating activities and free cash flow of $39.8 million and $32.7 million, respectively, in the second quarter.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the second quarter of fiscal 2021 ended October 31, 2020 and other information related to its business at 8:30 a.m. Eastern Time on Thursday, December 3, 2020. Investors who wish to participate in the call should dial 877-407-3982 (domestic) or 201-493-6780 (international) at least 5 minutes prior to the start of the call. The live webcast will be available on the Investors section of the Company’s website at www.gms.com. There will be a slide presentation of the results available on that page of the website as well. Replays of the call will be available through January 3, 2021 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13713234.

About GMS Inc.

Founded in 1971, GMS operates a network of more than 260 distribution centers across the United States and Canada. GMS’s extensive product offering of wallboard, suspended ceilings systems, or ceilings, and complementary construction products is designed to provide a comprehensive one-stop-shop for our core customer, the interior contractor who installs these products in commercial and residential buildings.

Use of Non-GAAP Financial Measures

GMS reports its financial results in accordance with GAAP. However, it presents Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin, which are not recognized financial measures under GAAP. GMS believes that Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA and Adjusted EBITDA margin assist investors and analysts in comparing its operating performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s management believes Adjusted net income, Adjusted SG&A, free cash flow, Adjusted EBITDA and Adjusted EBITDA margin are helpful in highlighting trends in its operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which the Company operates and capital investments. In addition, the Company utilizes Adjusted EBITDA in certain calculations under its senior secured asset based revolving credit facility and its senior secured first lien term loan facility.

You are encouraged to evaluate each adjustment and the reasons GMS considers it appropriate for supplemental analysis. In addition, in evaluating Adjusted net income, Adjusted SG&A and Adjusted EBITDA, you should be aware that in the future, the Company may incur expenses similar to the adjustments in the presentation of Adjusted net income, Adjusted SG&A and Adjusted EBITDA. The Company’s presentation of Adjusted net income, Adjusted SG&A, Adjusted SG&A margin, Adjusted EBITDA, and Adjusted EBITDA margin should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. In addition, Adjusted net income, free cash flow, Adjusted SG&A and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in GMS’s industry or across different industries. Please see the tables at the end of this release for a reconciliation of Adjusted EBITDA, free cash flow, Adjusted SG&A and Adjusted net income to the most directly comparable GAAP financial measures.

When calculating organic net sales growth, the Company excludes from the calculation (i) net sales of acquired businesses until the first anniversary of the acquisition date, and (ii) the impact of foreign currency translation.

Forward-Looking Statements and Information:

This press release 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, actions taken to optimize our operations and align our business consistent with demand, our ability to continue successfully navigating the evolving operating environment, strategic initiatives and growth potential across the Company’s business, our efforts in response to COVID-19, and the ability to deliver growth, value creation and long-term success contained in this press release 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 are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control, including current public health issues that may affect the Company’s business. Forward-looking statements 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 its other periodic reports filed with the SEC. In addition, the statements in this release are made as of December 3, 2020. 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. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to December 3, 2020.

GMS Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
		Three Months Ended						Six Months Ended
		October 31,						October 31,
		2020			2019				2020		2019
Net sales		$	812,856		$	861,929		$	1,615,429		$	1,709,105
Cost of sales (exclusive of depreciation and amortization shown separately below)			547,785			577,436			1,089,900			1,150,958
Gross profit			265,071			284,493			525,529			558,147
Operating expenses:
Selling, general and administrative			188,352			200,457			371,464			395,088
Depreciation and amortization			27,245			29,518			54,342			58,793
Total operating expenses			215,597			229,975			425,806			453,881
Operating income			49,474			54,518			99,723			104,266
Other (expense) income:
Interest expense			(13,525)			(17,559)			(27,606)			(35,836)
Write-off of debt discount and deferred financing fees			—			(707)			—			(707)
Other income, net			797			813			1,452			1,752
Total other expense, net			(12,728)			(17,453)			(26,154)			(34,791)
Income before taxes			36,746			37,065			73,569			69,475
Provision for income taxes			8,277			7,927			17,881			15,517
Net income		$	28,469		$	29,138		$	55,688		$	53,958
Weighted average common shares outstanding:
Basic			42,723			41,761			42,674			41,382
Diluted			43,174			42,635			43,096			42,126
Net income per common share(1):
Basic		$	0.67		$	0.70		$	1.30		$	1.30
Diluted		$	0.66		$	0.68		$	1.29		$	1.27

(1) The following table sets forth the computation of basic and diluted earnings per share of common stock for periods presented:

		Three Months Ended						Six Months Ended
		October 31,						October 31,
		2020			2019			2020			2019
		(in thousands, except per share data)
Net income		$	28,469		$	29,138		$	55,688		$	53,958
Less: Net income allocated to participating securities			—			—			—			342
Net income attributable to common stockholders		$	28,469		$	29,138		$	55,688		$	53,616
Basic earnings per common share:
Basic weighted average common shares outstanding			42,723			41,761			42,674			41,382
Basic earnings per common share		$	0.67		$	0.70		$	1.30		$	1.30
Diluted earnings per common share:
Basic weighted average common shares outstanding			42,723			41,761			42,674			41,382
Add: Common Stock Equivalents			451			874			422			744
Diluted weighted average common shares outstanding			43,174			42,635			43,096			42,126
Diluted earnings per common share		$	0.66		$	0.68		$	1.29		$	1.27

GMS Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data)
		October 31,			April 30,
		2020			2020
Assets
Current assets:
Cash and cash equivalents		$	118,168		$	210,909
Trade accounts and notes receivable, net of allowances of $5,273 and $5,141, respectively			434,836			405,254
Inventories, net			302,357			299,815
Prepaid expenses and other current assets			19,042			14,972
Total current assets			874,403			930,950
Property and equipment, net of accumulated depreciation of $174,832 and $158,554, respectively			300,144			305,467
Operating lease right-of-use assets			114,198			115,257
Goodwill			557,486			553,073
Intangible assets, net			339,918			361,884
Deferred income taxes			12,651			8,904
Other assets			12,074			13,247
Total assets		$	2,210,874		$	2,288,782
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	163,927		$	213,230
Accrued compensation and employee benefits			43,843			67,590
Other accrued expenses and current liabilities			88,170			63,812
Current portion of long-term debt			49,302			50,201
Current portion of operating lease liabilities			31,694			33,040
Total current liabilities			376,936			427,873
Non-current liabilities:
Long-term debt, less current portion			946,721			1,047,279
Long-term operating lease liabilities			88,122			89,605
Deferred income taxes, net			7,837			12,018
Other liabilities			73,361			78,026
Total liabilities			1,492,977			1,654,801
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01 per share, 500,000 shares authorized; 42,690 and 42,554 shares issued and outstanding as of October 31, 2020 and April 30, 2020, respectively			427			426
Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of October 31, 2020 and April 30, 2020			—			—
Additional paid-in capital			534,646			529,662
Retained earnings			224,663			168,975
Accumulated other comprehensive loss			(41,839)			(65,082)
Total stockholders’ equity			717,897			633,981
Total liabilities and stockholders’ equity		$	2,210,874		$	2,288,782

GMS Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
		Six Months Ended
		October 31,
		2020			2019
Cash flows from operating activities:
Net income		$	55,688		$	53,958
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			54,342			58,793
Write-off and amortization of debt discount and debt issuance costs			1,505			2,368
Equity-based compensation			6,370			5,591
Loss (gain) on disposal and impairment of assets			875			(742)
Deferred income taxes			(9,296)			(2,380)
Other items, net			(1,057)			1,101
Changes in assets and liabilities net of effects of acquisitions:
Trade accounts and notes receivable			(26,137)			(29,932)
Inventories			(950)			1,800
Prepaid expenses and other assets			(4,776)			1,573
Accounts payable			(50,867)			(5,486)
Accrued compensation and employee benefits			(23,889)			(12,974)
Other accrued expenses and liabilities			22,240			(3,743)
Cash provided by operating activities			24,048			69,927
Cash flows from investing activities:
Purchases of property and equipment			(11,845)			(14,637)
Proceeds from sale of assets			720			1,056
Acquisition of businesses, net of cash acquired			(51)			(10,633)
Cash used in investing activities			(11,176)			(24,214)
Cash flows from financing activities:
Repayments on revolving credit facilities			(102,189)			(558,906)
Borrowings from revolving credit facilities			14,750			562,698
Payments of principal on long-term debt			(4,984)			(54,984)
Payments of principal on finance lease obligations			(14,629)			(12,310)
Repurchases of common stock			(1,222)			—
Debt issuance costs			—			(1,286)
Proceeds from exercises of stock options			863			6,761
Payments for taxes related to net share settlement of equity awards			(754)			—
Other financing activities			1,270			1,022
Cash used in financing activities			(106,895)			(57,005)
Effect of exchange rates on cash and cash equivalents			1,282			223
Decrease in cash and cash equivalents			(92,741)			(11,069)
Cash and cash equivalents, beginning of period			210,909			47,338
Cash and cash equivalents, end of period		$	118,168		$	36,269
Supplemental cash flow disclosures:
Cash paid for income taxes		$	20,224		$	25,642
Cash paid for interest			25,726			33,654

GMS Inc.
Net Sales by Product Group (Unaudited)
(dollars in thousands)
		Three Months Ended												Six Months Ended
		October 31,			% of				October 31,		% of			October 31,			% of			October 31,			% of
		2020			Total				2019		Total			2020			Total			2019			Total
Wallboard		$	330,515		40.6	%		$	350,618		40.7	%		$	658,512		40.8	%		$	692,213		40.5	%
Ceilings			111,293		13.7	%			122,807		14.2	%			224,995		13.9	%			251,917		14.7	%
Steel framing			111,293		13.7	%			136,159		15.8	%			221,780		13.7	%			267,988		15.7	%
Other products			259,755		32.0	%			252,345		29.3	%			510,142		31.6	%			496,987		29.1	%
Total net sales		$	812,856					$	861,929					$	1,615,429					$	1,709,105

GMS Inc.
Reconciliation of Net Income to Adjusted EBITDA (Unaudited)
(in thousands)
		Three Months Ended						Six Months Ended
		October 31,						October 31,
		2020			2019			2020			2019
Net income		$	28,469		$	29,138		$	55,688		$	53,958
Interest expense			13,525			17,559			27,606			35,836
Write-off of debt discount and deferred financing fees			—			707			—			707
Interest income			(14)			(6)			(51)			(18)
Provision for income taxes			8,277			7,927			17,881			15,517
Depreciation expense			12,710			12,592			25,537			25,014
Amortization expense			14,535			16,926			28,805			33,779
EBITDA		$	77,502		$	84,843		$	155,466		$	164,793
Stock appreciation expense(a)			314			1,267			1,106			1,327
Redeemable noncontrolling interests(b)			186			(18)			438			644
Equity-based compensation(c)			3,252			2,315			4,857			3,710
Severance and other permitted costs(d)			762			1,394			2,709			1,948
Transaction costs (acquisitions and other)(e)			25			327			125			1,299
Loss (gain) on disposal and impairment of assets(f)			481			(586)			875			(742)
Effects of fair value adjustments to inventory(g)			—			—			—			151
Secondary public offering costs(h)			—			363			—			363
EBITDA add-backs			5,020			5,062			10,110			8,700
Adjusted EBITDA		$	82,522		$	89,905		$	165,576		$	173,493
Net sales		$	812,856		$	861,929		$	1,615,429		$	1,709,105
Adjusted EBITDA margin			10.2	%		10.4	%		10.2	%		10.2	%
(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 Term Loan Facility, including certain unusual, nonrecurring costs due to the COVID-19 pandemic. (e) Represents costs related to acquisitions paid to third parties. (f) Includes impairment of assets resulting from restructuring plans to close certain facilities and gains from the sale of assets. (g) Represents the non‑cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value. (h) Represents costs paid to third-party advisors related to secondary offerings of our common stock.

 

GMS Inc.
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Unaudited)
(in thousands)
		Three Months Ended						Six Months Ended
		October 31,						October 31,
			2020		2019			2020			2019
Cash provided by operating activities		$	39,759		$	82,367		$	24,048		$	69,927
Purchases of property and equipment			(7,100)			(8,746)			(11,845)			(14,637)
Free cash flow(a)		$	32,659		$	73,621		$	12,203		$	55,290
(a) Free cash flow is a non-GAAP financial measure that we define as net cash provided by operations less capital expenditures.

GMS Inc.
Reconciliation of Selling, General and Administrative Expense to Adjusted SG&A (Unaudited)
(in thousands)
		Three Months Ended						Six Months Ended
		October 31,						October 31,
			2020		2019			2020			2019
Selling, general and administrative expense		$	188,352		$	200,457		$	371,464		$	395,088
Adjustments
Stock appreciation expense(a)			(314)			(1,267)			(1,106)			(1,327)
Redeemable noncontrolling interests(b)			(186)			18			(438)			(644)
Equity-based compensation(c)			(3,252)			(2,315)			(4,857)			(3,710)
Severance and other permitted costs(d)			(812)			(1,394)			(2,693)			(1,948)
Transaction costs (acquisitions and other)(e)			(25)			(327)			(125)			(1,299)
(Loss) gain on disposal and impairment of assets(f)			(481)			586			(875)			742
Secondary public offering costs(g)			—			(363)			—			(363)
Adjusted SG&A		$	183,282		$	195,395		$	361,370		$	386,539
Net sales		$	812,856		$	861,929		$	1,615,429		$	1,709,105
Adjusted SG&A margin			22.5	%		22.7	%		22.4	%		22.6	%
(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 Term Loan Facility, including certain unusual, nonrecurring costs due to the COVID-19 pandemic. (e) Represents costs related to acquisitions paid to third parties. (f) Includes impairment of assets resulting from restructuring plans to close certain facilities and gains from the sale of assets. (g) Represents costs paid to third-party advisors related to secondary offerings of our common stock.

 

GMS Inc.
Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited)
(in thousands, except per share data)
		Three Months Ended							Six Months Ended
		October 31,							October 31,
		2020				2019			2020				2019
Income before taxes		$	36,746			$	37,065		$	73,569			$	69,475
EBITDA add-backs			5,020				5,062			10,110				8,700
Write-off of discount and deferred financing fees			—				707			—				707
Purchase accounting depreciation and amortization (1)			10,121				12,276			20,256				24,661
Adjusted pre-tax income			51,887				55,110			103,935				103,543
Adjusted income tax expense			11,674				12,400			23,385				23,297
Adjusted net income		$	40,213			$	42,710		$	80,550			$	80,246
Effective tax rate (2)			22.5	%			22.5	%		22.5	%			22.5	%
Weighted average shares outstanding:
Basic			42,723				41,761			42,674				41,382
Diluted (3)			43,174				42,635			43,096				42,391
Adjusted net income per share:
Basic		$	0.94			$	1.02		$	1.89			$	1.94
Diluted		$	0.93			$	1.00		$	1.87			$	1.89
(1) 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. (2) Normalized cash tax rate determined based on our estimated taxes excluding the impact of purchase accounting and certain other deferred tax amounts. (3) Diluted shares outstanding for periods prior to June 13, 2019 have been adjusted to include 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. On June 13, 2019, the holders exchanged all of the exchangeable shares for 1.1 million shares of the Company’s common stock.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20201203005146/en/

Investors:

Leslie H. Kratcoski

[email protected]

770-723-3306

KEYWORDS: Georgia United States North America

INDUSTRY KEYWORDS: Interior Design Architecture Other Construction & Property Residential Building & Real Estate Commercial Building & Real Estate Construction & Property

MEDIA:

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M7 Group Selects Hansen Customer Care and Billing to Spearhead Digital-Age Billing Operations

MELBOURNE, Australia–(BUSINESS WIRE)–
Hansen Technologies is pleased to announce a product upgrade and multi-year license and support agreement with Luxembourg-headquartered M7 Group for Hansen CCB, as the leading European pay-TV operator looks to consolidate billing operations and enhance the ability to meet the demands of a new, digital era.

Hansen CCB is designed to enable service providers to capitalise on new business opportunities by quickly launching attractive products for specific target markets. The scalable customer-care and billing solution, designed for today’s leading pay-TV providers, delivers the power to bring new content and OTT partner services online fast. Hansen CCB is part of Hansen’s Create-Deliver-Engage Suite for communications service providers (CSPs).

The upgrade programme will deliver a full consolidation of three billing platforms, supporting over three million subscribers across eight countries, onto one Hansen CCB platform, with phase one having already been successfully completed.

Hans Troelstra, Chief Executive Officer, M7 Group, commented: “At M7 Group, we are firmly focused on the provision of excellent service and an optimal user experience. As a long-time partner, Hansen will continue to play an important role in our success. With the new Hansen CCB upgrade, we will be better equipped to continue building on our strengths, and to improve our position in a rapidly changing market while also reducing operational risk and on-going costs.”

Scott Weir, Chief Executive Officer, EMEA, Hansen Technologies, commented: “As a pay-TV provider with operations in geographically diverse regions across Europe, companies such as M7 Group are in need of market-leading billing solutions that are versatile, and can enable their business operations to meet the challenges of tomorrow. We are pleased to have been chosen by M7 Group and look forward to deepening our relationship in the years to come – enabling new market opportunities in the process.”

For further information about Hansen Technologies, please visit www.hansencx.com.

About Hansen Technologies

Hansen Technologies (ASX: HSN) is a leading global provider of software and services to the energy, water and communications industries. With its award-winning software portfolio, Hansen serves 550+ customers in over 80 countries, helping them to create, sell, and deliver new products and services, manage and analyse customer data, and control critical revenue management and customer support processes.

For more information, visit www.hansencx.com

About M7 Group

M7 Group SA, based in Luxembourg, is one of Europe’s largest operators of satellite and IP-based TV platforms. M7 Group uses different brands in different countries: CanalDigitaal and Online.nl in the Netherlands, TV Vlaanderen in Flanders and TéléSAT in French speaking Belgium, HD Austria in Austria, Skylink for the Czech and Slovak markets and Diveo in Germany. All brands offer tailor made packages for clients adapted to the local culture and language in these countries. Today, M7 Group provides more than 3 million viewers with hundreds of satellite and IP-based radio and television services in digital and HD quality. Since 2011, M7 Group also provides broadband and telephony services to its customers in the Netherlands and Belgium. M7 Platform Services provides broadcasters with end-to-end distribution solutions for DTH, cable and IPTV reception.

For more information: www.m7group.eu

View source version on businesswire.com: https://www.businesswire.com/news/home/20201203005065/en/

Adnan Bashir

Senior Corporate Communications Manager

Hansen Technologies

+1 647-204-0999

KEYWORDS: Europe Australia/Oceania Australia

INDUSTRY KEYWORDS: Technology Mobile/Wireless Audio/Video Telecommunications Software Networks

MEDIA:

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Moody’s Analytics Repeats in Four Categories at Chartis RiskTech100®

SAN FRANCISCO–(BUSINESS WIRE)–
Moody’s Analytics has earned repeat wins in four categories at this year’s Chartis RiskTech100®. These are four of our 10 wins to go along with the #2 overall ranking.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201203005152/en/

Credit Risk for the Banking Book: 5 straight wins

Predicting potential credit losses is more challenging than ever. Firms around the world rely on our solutions to assess and manage their credit risk exposure, for the duration of the credit lifecycle. Industry-leading capabilities from Moody’s Analytics turn credit risk data and analytics into insights that help our customers make better decisions.

Current Expected Credit Losses (CECL): 3 straight wins

Banks, credit unions, and insurance companies use our solution to automate allowance calculations, analysis, reporting, and workflow. Financial institutions must leverage a range of information to meet the CECL and Allowance for Loan and Lease Losses (ALLL) standards. Our solution includes award-winning Moody’s Analytics software, scenarios, data, and modeling, enabling banks to both meet these standards and create more profitable forward-looking strategies.

Model Validation: 3 straight wins

The current economic instability has made validating and monitoring credit risk models a higher priority for our customers than ever before. Moody’s Analytics winning this category for a third straight year reflects our deep expertise and broad capabilities. Our solutions cover retail and commercial asset classes for internally developed and third-party models.

Enterprise Stress Testing: 2 straight wins

Banks need to forecast the robustness of their enterprise, both to meet regulatory requirements and to fully understand the risks and opportunities in their portfolios. Our award-winning solution includes software and economic scenarios and provides banks with robust stress testing capabilities to meet the needs of executive management and regulators.

“The uncertainty caused by the pandemic makes it challenging to manage risk and puts even more pressure on our customers to make better decisions,” said Jacob Grotta, Head of Risk and Finance Solutions at Moody’s Analytics. “We’re honored to help them do that, especially in this difficult time, and gratified to again earn these awards from Chartis.”

Moody’s Analytics, Moody’s, and all other names, logos, and icons identifying Moody’s Analytics and/or its products and services are trademarks of Moody’s Analytics, Inc. or its affiliates. Third-party trademarks referenced herein are the property of their respective owners.

About Moody’s Analytics

Moody’s Analytics provides financial intelligence and analytical tools to help business leaders make better, faster decisions. Our deep risk expertise, expansive information resources, and innovative application of technology help our clients confidently navigate an evolving marketplace. We are known for our industry-leading and award-winning solutions, made up of research, data, software, and professional services, assembled to deliver a seamless customer experience. We create confidence in thousands of organizations worldwide, with our commitment to excellence, open mindset approach, and focus on meeting customer needs. For more information about Moody’s Analytics, visit our website or connect with us on Twitter and LinkedIn.

Moody’s Analytics, Inc. is a subsidiary of Moody’s Corporation (NYSE: MCO). Moody’s Corporation reported revenue of $4.8 billion in 2019, employs approximately 11,400 people worldwide and maintains a presence in more than 40 countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201203005152/en/

JUSTIN BURSZTEIN

Moody’s Analytics Communications

+1.212.553.1163

Moody’s Analytics Media Relations

moodysanalytics.com

twitter.com/moodysanalytics

linkedin.com/company/moodysanalytics

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

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