Investor Presentation September 2017
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. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Examples of forward-looking statements include those related to net sales, gross profit, gross margins, capital expenditures and market share growth, as well as non-GAAP financial measures such as Adjusted EBITDA, the ratio of debt-to-Adjusted EBITDA, adjusted net income and base business sales, including any management expectations or outlook for fiscal 2018 and beyond. In addition, statements regarding potential acquisitions and future greenfield locations are forward-looking statements, as well as statements regarding the markets in which the Company operates and the potential for growth in the commercial, residential and repair and remodeling, or R&R, markets. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our 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, margin, supply, and/or demand for products which we distribute; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended April 30, 2017, and in our other periodic reports filed with the SEC. In addition, the statements in this presentation are made as of September 13, 2017. We undertake 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 our views as of any date subsequent to September 13, 2017. 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. 2
GMS at a Glance Net Sales Breakdown (LTM FY18 Q1) (2) GMS Overview #1 North American specialty distributor Other of interior construction products (1) Residential 23% Steel ~40% ‒ More than 205 branches across 42 states Framing ‒ 14.6% market share in wallboard 16% ‒ 16.7% market share in ceilings Balanced mix of commercial new construction, commercial R&R, residential new construction and residential R&R Ceilings Critical link between suppliers and highly fragmented 15% customer base Wallboard 46% Commercial ~60% National scale drives purchasing advantages over peers while local expertise enhances service capabilities Net Sales (2) Adjusted EBITDA (3) ($ in millions, April FYE) ($ in millions, April FYE) $2,412 One-stop-shop for the interior contractor with broad product $2,319 $199 $198 offering of 20,000+ SKUs $10 CAGR: 41.1% (3) $4 $1,858 $150 $1,570 $195 $12 $188 $1,353 $114 Since the 2016 IPO, GMS has continued to execute on its $1,162 32.7% 32.6% $8 $138 $991 31.9% $87 strategy +360bps $106 30.5% ‒ Increased market share in wallboard by ~160 bps $57 29.7% 29.0% 29.0% $32 ‒ Executed 8 acquisitions and opened 5 new greenfields ‒ Increased LTM Q1 18 net sales by 29.8% and Adj. FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 LTM FY-12 FY-13 FY-14 FY-15 FY-16 FY-17 LTM EBITDA by 41.1% compared to FY16 Q118 Q1 18 +480bps ‒ Expanded Adj. EBITDA margins by 70 bps compared to % Margin (3) Net Sales Gross Margin 3.3% 5.0% 6.4% 6.7% 7.4% 8.1% 8.1% FY16 (1) Based on sales of wallboard and ceilings. Wallboard share based on LTM 6/30/17 volume. Ceilings share based on LTM 6/30/17 sales. (2) Net sales do not reflect net sales attributable to acquired entities for any period prior to their respective dates of acquisition. Breakdown based on FY2017 Net Sales. (3) FY2015, FY2016, FY2017 and 1Q18 LTM Adj. EBITDA includes approximately $8.1 million, $12.1 million, $10.0 million and $3.6 million, respectively, from entities acquired in FY2015, FY2016, FY2017 and 1Q18 LTM respectively, for the period prior to their respective dates of acquisition. However, Adj. EBITDA margin and the 5.25-year CAGR exclude the impact of the entities acquired for the period prior to their respective dates of acquisition. For a reconciliation of Adj. EBITDA to Net Income (loss), the most directly comparable GAAP measure, see Appendix. 3
National Platform With Local Presence And Independent Brands GMS combines the benefits of national scale with a local “go-to-market” strategy GMS has an integrated national platform, but operates through over 50 local brands that are highly regarded in their markets Branch managers are empowered and incentivized to run operations like entrepreneurs within parameters of the overall business model − GMS’s model ensures customer and product decisions are made by the individual with the best local market knowledge GMS’s model generates significant economies of scale, while maintaining the high service levels, entrepreneurial culture, and the customer intimacy of a local business Representative Local Brands 4
Product Overview Wallboard Ceilings Steel Framing Other Products Primarily consists of #1 Market Position #1 Market Position Steel framing products complementary interior for interior walls Suspended ceiling Used to finish the construction products, Sold into commercial interior walls and systems primarily including joint compound, comprised of mineral applications, typically as ceilings in residential, Description finishing materials, tools commercial and fiber, ceiling tile and grid part of a package with and fasteners, safety institutional construction wallboard, ceilings and Architectural specialty products and EIFS projects other products (exterior insulation and ceilings systems finishing system) Exterior wallboard Various types of Adhesives Acoustical ceiling tiles Drywall steel wallboard including: (standard and EIFS Flat stock 1/2 inch standard architectural specialty) Insulation (residential), 5/8 inch Plastering steel Clips fire rated (commercial), Joint compound and plaster Structural framing foil backed, lead lined, Covered fiberglass moisture resistant, Safety equipment Studs and track Ceiling tile grid mold resistant and Tools and fasteners vinyl covered Hangers Products 5
A One-Stop-Shop for the Interior Contractor GMS sells a complementary and complete product offering to the interior contractor who installs wallboard, ceilings, steel framing and all the ancillary products needed to complete the job GMS Serves as a Critical Link Between Suppliers and a Highly Fragmented Customer Base − Specialty wallboard distributors lead the wallboard distribution channel with ~65% − Specialty distributors account for ~90% of ceilings distribution channel Key manufacturers Channel (1) “One-stop-shop” for the Interior Contractor Wallboard Steel Fasteners Framing Specialty Distributors (~65%) Lumberyards (~15%) Joint Wallboard Compound Big Box Retailers (~20%) Ceilings Specialty Distributors (~90%) Ceilings Tools Other (~10%) Safety Insulation Products (1) Based on management estimates. Highlighted boxes indicate channels in which GMS competes. 6
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