Slide 1: Safe Harbor and Basis of Presentation
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
Slide 2: Today's Presenters
G. Michael Callahan, Jr. President and Chief Executive Officer H. Douglas Goforth Chief Financial Officer Today’s Presenters 3
Slide 3: An Exciting Acquisition for Shareholders, Customers, Suppliers and Employees
Establishes footprint into Canada and expands the leading North American distributor of wallboard and ceilings Pro forma LTM 1/31/18 net sales of ~$3 billion and Adjusted EBITDA of ~$305 million(1) Titan is the market leader in Canada with ~2x scale of nearest GSD competitor Impressive track record
Slide 4: Transaction Overview
Transaction Overview ~$627 million (C$800 million) assuming debt-free balance sheet at closing Less than 8.0x Adjusted EBITDA, including projected run-rate synergies(1) Purchase Price Estimated Synergies Approximately $10 million projected run-rate annual pre-tax synergies through procurement and ov
Slide 5: Business Overview
Business Overview Revenue by Product (CY 2017) (US$ in millions) (1) The largest gypsum specialty dealer (“GSD”) in Canada Key products include wallboard, insulation, lumber, roofing, steel framing and other complementary building materials Titan distributes building materials used in low-rise resid
Slide 6: Key Investment Highlights
Extends GMS’s Leadership Position in North America with Expanded Scale and Footprint Provides Foundation to Support Future Opportunities in Attractive, Highly Fragmented Canadian Market Creates Well-Balanced Platform Built for Growth Across Multiple Product Offerings in the United States and Canada
Slide 7: Extends GMS's Leadership Position in North America with Expanded Scale and Footprint
Pro forma LTM 1/31/18 sales of ~$3 billion with more than 240 locations (1) Focused on growing platform and scale while maintaining excellence in customer service and quality Optimized operations through performance tracking and improvement Entrepreneurial culture driving continued innovation and su
Slide 8: Provides Foundation to Support Future Opportunities in Attractive, Highly Fragmented Canadian Market
Provides Foundation to Support Future Opportunities in Attractive, Highly Fragmented Canadian Market Canadian GSD Landscape by Sales (1) Canadian GSD Market Overview The annual demand for wallboard totals ~2.9 billion square feet (BSF) ~50% are sold through GSDs ~50% are sold to small contractors an
Slide 9: Macro-Economic Fundamentals
Macro-Economic Fundamentals Canada Leads G7 Real GDP Growth Canada’s economy has been the strongest performer in the G7 over the last 20 years, growing at 2.4% per annum, and is expected to continue as a consistently strong performer among the G7 Steady demand for new homes driven by: Consistent pop
Slide 10: Creates Well-Balanced Platform Built for Growth Across Multiple Product Offerings
Creates Well-Balanced Platform Built for Growth Across Multiple Product Offerings in the United States and Canada Sales by Product (LTM) End Market Mix (LTM) Consolidated w/ Synergies Revenue (LTM) $2.5 billion $0.5 billion $3.0 billion Adj. EBITDA (LTM) $227 million (3) $68 million $305 million Adj
Slide 11: Canadian Insulation Market
(1) 12 Canadian Insulation Market Canadian building codes have continued to become more stringent with respect to insulation and energy efficiency As the codes continue to evolve and become implemented, they drive greater insulation consumption per housing start. As a result, Canadian insulation vol
Slide 12: Combines Complementary Cultures with Shared Commitment to Customer Service
Combines Complementary Cultures with Shared Commitment to Customer Service and Operational Excellence Unique culture combining a results driven environment with a highly entrepreneurial, self starter attitude Significant equity ownership by executive management; personally invested in the success an
Slide 13: Expected to Provide Meaningful Cost Synergies and Be Immediately Accretive
Expected to Provide Meaningful Cost Synergies and Expected to be Immediately Accretive to Adjusted EPS and Adjusted EBITDA Margin 14 Highly complementary business strategies with identified and achievable synergies, driven largely by purchasing savings generated from common suppliers Run-rate synerg
Slide 14: Pro Forma Adjusted EPS Impact
15 Based on estimated pro forma LTM January 31, 2018 results, our Adjusted earnings per share would have increased by approximately 25% on a pro forma basis We expect our estimated effective tax rate to be 23-25% in FY 2019 Assuming the effects of tax reform and the acquisition of Titan were effecti
Slide 15: Capital Structure Post Titan Transaction
Capital Structure Post Titan Transaction $425 million of new term debt Utilize cash-on hand, ABL Facility and $35 million equity rollover, less assumed liability of ~$20 million to fund balance of purchase price Pro-forma leverage of 4.1x Net Debt / LTM Adj. EBITDA as of 1/31/18 Compares favorably t
Slide 16: Key Investment Highlights
Extends GMS’s Leadership Position in North America with Expanded Scale and Footprint Provides Foundation to Support Future Opportunities in Attractive, Highly Fragmented Canadian Market Creates Well-Balanced Platform Built for Growth Across Multiple Product Offerings in the United States and Canada
Slide 17: Key Investment Highlights
Key Investment Highlights An acquisition of Titan is well-aligned with GMS’s strategic initiatives v Extends GMS's Leadership Position in North America with Expanded Scale and Footprint Y Provides Foundation to Support Future Opportunities in Attractive, Highly Fragmented Canadian Market Y Creates W
Slide 18: LTM Net Income to Pro Forma Adjusted EBITDA
LTM Net Income to Pro Forma Adjusted EBITDA Pro Forma Adjusted EBITDA Reconciliation Commentary 19 Represents non-cash compensation expenses related to stock appreciation rights agreements Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests Repr
Slide 19: LTM Net Income to Pro Forma Adjusted EBITDA
TM Net Income to Pro Forma Adjusted EBITDA Pro Forma Adjusted EBITDA Reconciliation {USSin mlins) um 'A. Represents non-cash compensation expenses related to stock appreciation (Unoudted) January 31,2018, rights agreements Netincome s B. Represents non-cash compensation expense related to changes in
Slide 20: Q&A