GMS : Fourth Quarter 2024 GMS Inc. Fourth Quarter Fiscal 2024 Earnings Conference Call Transcript

GMS, Inc.

Fourth Quarter Fiscal Year 2024 Earnings Conference Call

June 20, 2024

GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

C O R P O R A T E P A R T I C I P A N T S

Carey Phelps, Vice President, Investor Relations

John Turner, President and Chief Executive Officer

Scott Deakin, Senior Vice President and Chief Financial Officer

C O N F E R E N C E C A L L P A R T I C I P A N T S

Noah Merkousko, Stephens

Matthew Bouley, Barclays

David Manthey, Baird

Brian Biros, Thompson Research Group

Mike Dahl, RBC Capital Markets

Jeffrey Stevenson, Loop Capital Markets

P R E S E N T A T I O N

Operator

Greetings, and welcome to the GMS Inc. Fourth Quarter Fiscal Year 2024 Earnings Conference Call.

At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, please press star, zero on you telephone keypad. Please note this conference is being recorded. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Carey Phelps. Thank you, Ms. Phelps. You may begin.

Carey Phelps

Thank you, Kat. Good morning, and thank you for joining us for the GMS earnings conference call for the fourth quarter and full year fiscal 2024.

I'm joined today by John Turner, President and Chief Executive Officer, and Scott Deakin, Senior Vice President and Chief Financial Officer.

In addition to the press release issued this morning, we have posted PowerPoint slides to accompany this call in the Investors section of our website at www.gms.com.

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

Now looking at Slide 2. On today's call, Management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties many of which are beyond our control and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent Management's current estimates and expectations. The Company assumes no obligation to update any forward-looking statements in the future. Listeners are encouraged to review the more detailed discussions related to these forward-looking statements contained in the Company's filings with the SEC, including the Risk Factors section in the Company's 10- K and other periodic reports.

Today's presentation also includes a discussion of certain non-GAAP measures. The definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides. Please note that references on this call to the fourth quarter of fiscal 2024 relate to the quarter ended April 30, 2024.

Finally, once we begin the question-and-answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up.

With that, I'll turn the call over to John Turner, whose discussion will be starting on Slide 3. JT?

John Turner

Thank you, Carey. Good morning and thank you all for joining us today.

Volume growth across all four our major product categories for the year, as well as resilient pricing in wallboard and continued inflation in ceilings and complementary products, helped drive our record $5.5 billion in net sales and $5.3 billion in organic sales for the full year fiscal 2024. Benefiting from our balanced end markets, continuing demand in multifamily and solid levels of commercial activity helped to offset a more challenging single family backdrop as compared with the year before.

Looking at just our fourth quarter results, considering the significant steel pricing and associated margin headwinds, which accelerated particularly late in the quarter, we closed out fiscal 2024 with another solid level of performance, including generating net sales of $1.4 billion, net income of $56.4 million, and Adjusted EBITDA of $146.6 million. Cash flow generation was strong, with $204 million of cash from operating activities and $186.7 million of free cash flow.

As with our full year results, we delivered fourth quarter volume across all four of our major product categories, albeit at a much slower rate for steel in April than expected, particularly for multifamily applications. Single family, however, began to trend favorably, and for the first time since the fall of 2022, wallboard volumes for this sector were up year-over-year for the quarter. And although our fourth quarter average wallboard price was down slightly year-over-year, mostly due to mix, prices were flat sequentially, and in the coming months we expect to benefit from implementation of the previously announced manufacturer pricing actions, consistent with the typical three to six-month lag we traditionally see for wallboard price realization.

As we move into fiscal 2025, we believe we are prepared for what we expect to be an environment of changing end market dynamics once again.

First, although temporarily hindered by the current mortgage rate environment and record high home prices, significant pent-up demand remains for single family housing, which provides confidence for the medium to long term.

Through April, single family starts were up almost 26% calendar year-to-date as compared with a year ago. Therefore, we expect to see continued moderate year-over-year improvement for this end market in

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

the near term, followed by a more robust recovery thereafter, with what we expect will be an eventual downward shift in interest rates.

For multifamily, the demand environment was exceptionally strong for fiscal 2024, as compared to the prior year. However, given the significant decline in starts last year, this end market has likely peaked and we believe it will plateau as we serve the remaining backlog over the next quarter or so before we see a notable decline in activity levels during the back half of our fiscal year. At approximately 15% of our sales, we expect that the pace of declines will be manageable, particularly given the expectation for offsetting demand improvement in single family construction.

Finally, commercial construction activity remains solid during fiscal 2024, with a number of mega projects underway as well as still attractive demand in certain subsectors, primarily data centers, reshoring related and stimulus driven projects, education and healthcare. However, we've put in place spending flattening and new commercial starts declining, financing availability and cost, coupled with labor constraints and other inflationary pressures, appear to be headwinds, broadly.

In this environment, we would expect a mixed demand profile by sector, as some commercial applications will likely be pressured while others still have favorable support. As an indication of this varied environment, steel framing demand softened late in the fourth quarter, more than we had previously anticipated, both in terms of volume and price. However, more recently, most of this leading steel framing manufacturers have announced price increases, positive indicators for at least a flattening of recent deflationary pressures in the coming quarters.

This dynamic backdrop of end markets brings to life the benefits of our balanced customer base, with a revenue mix that is today roughly 50/50 commercial and residential. While still constrained in the near term, we believe that improvements in single family construction will help to offset the challenges facing the multifamily and commercial end markets, and all of these markets will ultimately benefit from relief in financing rates and availability when that occurs.

I would like to thank the entire GMS team for their continued commitment to delivering outstanding service and adding value for our customers. Through their efforts, we continue to flex our operations to successfully navigate the changing tides of customer demand.

Turning now to Slide 4. I'm very pleased to highlight that GMS continues to improve as we grow, and fiscal 2024 was another year of progress as our team executed with focus against our strategic pillars. We successfully expanded our share of U.S. wallboard sales by close to 80 basis points during the year when comparing our shipments to those reported by the gypsum manufacturers for the 12 month ended March 31, 2024, the closest proxy we have to our fiscal year. Likewise in steel, for that same time period, we gained approximately 130 basis points of share, as reported by the Steel framing Industry Association, and based upon available public disclosures from ceilings manufacturers, our share grew in this product space again in fiscal 2024, in total, and particularly in the higher end architectural specialties products.

Our service model, commitment to job site safety, and our expertise in every end market we serve, as well as our intentional effort to deepen our customer relationships and use technology to be faster and easier to work with, all contributed to our success this year. Our complementary products grew this past year by 7.4%, and in our key areas of focus, eaves and stucco, tools and fasteners, and insulation, we grew 11.5%. These outstanding results are due in many respects to those same things driving our core share, but are also due to our expanded sales organization, center-led purchasing programs, and the synergistic leveraging of acquired company expertise across the legacy business; while the newly acquired businesses benefit from GMS' systems and scale.

We remain committed to both organic and acquisitive growth in the strategically critical complementary product space. M&A has been and continues to be a key strategic driver of our growth. This past year was no exception, as we acquired Home Lumber and Building Supplies, which expanded our presence and complementary product offerings in Western Canada. AMW Construction Supply, which expanded

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

our complementary tools and fasteners, in Phoenix, Arizona, and Kamco Supply Corporation, which provided us with one of the leading market positions in New York City, the largest MSA where we lack a significant presence prior to this transaction. Also, subsequent to the end of our fiscal year, we announced a smaller acquisition of Howard & Sons to supplement our operations in Southern California, and our agreement to purchase Yvon Building Supplies and other affiliated companies in Ontario, Canada, which we expect to close next month.

We look forward to being able to welcome the Yvon team and adding their seven locations to our portfolio to better serve the Ontario market. Our current Canadian operations generated approximately 13% of our total net sales during fiscal 2024 and, of that, more than half of those sales were in complementary products, which tend to be margin accretive to the overall business. In addition to our more traditional acquisition targets in the United States, with substantial white space still available for us in Canada, we expect to continue to pursue additional margin enhancing opportunities, like the pending Yvon transaction.

Our "Yard of the Future" initiatives also took steps forward during fiscal 2024. For example, we have now completed the installation of yard-wideWi-Fi and added tablets in the 85% of our yards where doing so makes sense. With varying degrees of adoption so far, now that we have all of the tools in place, fiscal year '25 will be the year of further operational progression of this paperless picking and loading technology.

Where we have completed the necessary entity and data consolidations, we have simplified our back-of- house teams and processes and are working to implement more advanced ERP-embedded purchasing capabilities. We've seen improved service and inventory momentum as a result, which contributed to the free cash flow success we achieved in both our fiscal fourth quarter and the full year.

We expect to complete our entity consolidation and the associated process, organization and data simplification of our various divisions by the end of calendar 2025 and expect to see cost and productivity benefits as we continue these efforts.

And finally, we are making progress as we promote the value of our direct e-commerce platform to our customers. While adoption continues to evolve, we are seeing usage increase in many areas. For example, more than 70% of our customers have created online accounts by fiscal year end 2024, and as such, we have seen increases in web orders and activity. Importantly, as of the end of fiscal 2024, the percentage of payments we are receiving through our integrated online customer portal is now approaching 20% each month, making it easier for our customers and saving the Company both time and money.

Collectively, all of the productivity initiatives we have underway are intended to help preserve and drive additional profits and make it easier to do business with us. We continue to become better operators and reducing complexity in the business with the objective of providing greater value to all of our stakeholders.

With that, I will turn the call over to Scott.

Scott Deakin

Thank you, JT, and good morning everyone.

Starting with Slide 5, net sales for our fiscal fourth quarter increased 8.4% or 6.7% on a per-day basis, to $1.4 billion as volume growth across our major product categories helped to offset price deflation, notably including an estimated $29 million for steel, assuming current year volumes have been sold at prior year prices.

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

Commercial and multifamily activity levels remained solid for the quarter, while single family turned the corner with positive year-over-year growth in demand. Our recent acquisitions such as Kamco, EMJ and AMW also contributed positively to our quarter's top line results.

Organically, consolidated sales grew 4% or 2.4% on a same-day basis compared to the fourth quarter of fiscal 2023. From a U.S. end market perspective, commercial sales dollars grew 6% year-over-year on a per day basis despite continued and greater than expected steel price deflation. Single-family sales showed marked improvement with the year-over-year comparison turning positive for the first time since the fall of calendar 2022, with 2.8% growth per day as compared to the fourth quarter of fiscal 2023.

Multifamily activity also remains solid, particularly in wallboard, but a little slower overall than we had anticipated, principally on steel volumes with 2.4% growth per day in sales dollars as compared to the robust fourth quarter a year ago. Wallboard sales dollars of $586 million were up 7.6% over the same period last year, or 5.9% on a per day basis, with multifamily volumes up 5.4% and commercial volumes up 8.7%. As expected, single-family volumes also turned positive for the first time since the quarter of fiscal 2023, with wallboard volume growth per day of 7.6% as compared with the fourth quarter last year.

Organically, fourth quarter wallboard sales were up 6% compared with the prior year period, or 4.3% on a per day basis, comprised of a 6.3% increase in volume, partially offset by a 1.9% decline in price and mix as single-family board comprised a greater portion of our sales this quarter.

As expected, given the various supply-side dynamics, wallboard pricing remained resilient throughout calendar year 2023 despite the year-over-year slowdown in the single-family market. For our fiscal fourth quarter, the average realized wallboard price of $475 per thousand square feet was up slightly from the third quarter but down 1.3% from the same period a year ago, as the outperformance in single-family wallboard volumes led to a greater mix shift towards the less expensive board used in the end markets construction.

Moreover, as we said in past quarters, we would typically expect a lag between announced manufacturer price increases and our realization of those prices in the market. As such, our teams are still in the process of implementing the increases announced earlier this calendar year. Therefore, while we expect to see some of those pricing benefits late in our fiscal first quarter, we also expect continued mix shifts, which, combined, will likely result in wallboard pricing remaining roughly flat year-over-year for us for the next several quarters.

Longer term, the minimal capacity additions being made by the wallboard manufacturing space are expected to do little to alleviate the tight conditions we expect once single family demand gains some momentum, which together with higher operating and raw material cost increases, particularly in gypsum, should help drive further pricing improvements.

Ceiling sales of $188.9 million in the fourth quarter were up 21.7%, or 19.8% on a per day basis, with strong increases of 11.4% in volume and 8.4% in price and mix. Organic sales in ceilings grew 11.4%, or 9.7% on a per day basis, with a 5.5% increase in volume and a 4.2% increase in price and mix.

Fourth quarter steel framing sales of $220.5 million were down 1.5% or 3% on a same day basis versus the prior year quarter as deflationary pricing drove an 11.8% decline in price and mix while volumes increased 8.8%, still healthy but below our expectations due to slower multifamily conditions in certain markets, particularly late in the quarter. Organically, steel framing sales were down 6.6% on a same day basis, with a 13.5% decline in price and mix, partially offset by a 6.9% increase in volume.

Until we see some real recovery in either the office or other commercial remodeling space, steel volumes will likely continue to be less predictable as larger projects and a higher mix of end-market applications are driving a greater portion of our commercial activity than has been true historically.

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

Broadly speaking, prices for steel framing retreated farther and for longer than we would have expected. For the fourth quarter, prices for steel framing products were down 11.7% compared to a year ago but were roughly flat on a sequential basis. And although we have received multiple price increase notices from the formers, it will take some time to realize any potential acceptance by the market.

As a result, we expect monthly steel framing prices to soften sequentially through the remainder of Q1 at least slightly before flattening at or around the quarter end levels in subsequent quarters. Complementary product sales of $417.6 million for the quarter grew 9.8% year-over-year in total and 3.5% on an organic basis, representing the 16th consecutive quarter of growth for this category. On a per day basis, complementary product growth was 8% for total sales and 1.9% for organic sales. Expansion of complementary products, particularly for tools and fasteners, eaves and stucco, and insulation, continues to be a key element of our strategic priority as those categories grew 10.4% for the quarter.

Now turning to Slide 6, which highlights our profitability for the quarter. Gross profit of $451.2 million increased 6.3% compared to the prior year quarter due primarily to the favorable impact of our recent acquisitions and the improved volumes we delivered during the quarter across all of our major product lines, partially offset by deflationary dynamics in steel pricing.

Gross margin of 31.9% was down 60 basis points as compared to 32.5% a year ago, primarily related to steel price deflation partially offset by favorable volume-driven incentives. Cost of sales for the quarter also included the negative $1.2 million impact of non-cash purchase accounting adjustments, primarily related to Kamco, to increase acquired inventory to its estimated fair value.

These adjustments were $0.5 million a year ago. Absent these adjustments, gross margin would have been 32% for our fiscal fourth quarter. Together with the traditional price implementation lag, competitive dynamics and mix, also dampened fourth quarter gross margins as compared with our prior expectations for the quarter.

Selling, general and administrative expenses were $315.5 million for the quarter, an increase of $35.8 million over the prior year quarter, primarily related to our recent acquisitions in greenfield openings. Also contributing to the higher SG&A expenses were increased labor costs, unfavorable volumes, coupled with some inflationary pressures in wages and benefits. Relative to our expectations going into the fourth quarter, SG&A also included a $2 million reserve for bad debt expense.

SG&A as a percentage of net sales was 22.3%, an increase of 80 basis points for the quarter of fiscal 2023, with 55 basis points of the leveraged change attributable to reduced revenue as a result of product price deflation. Increased wages, benefits and other costs resulting mostly from improved volumes as well as some inflationary pressure in these costs negatively impacted SG&A leverage by an estimated 15 basis points. Approximately 10 basis points of the remaining variance was primarily due to our recent acquisitions and greenfield yard openings. Adjusted SG&A expense as a percentage of net sales of 21.8% increased 90 basis points from 20.9% in the prior year quarter.

All in, inclusive of a 4.6% increase in interest expense and a 17.1% increase in income tax expense, net income decreased 25.4% to $56.4 million for the quarter, or $1.39 per diluted share compared to net income of $75.6 million, or $1.80 per diluted share a year ago. State taxes were higher in the quarter, primarily the result of acquisitions that resulted in an increase in apportionment to higher tax jurisdictions, together with a one-time revaluation of the Company's deferred tax liability.

Also contributing to the decrease in net income was an increase in depreciation expense and a write-off of debt discount and deferred financing fees in connection with our term loan refinancing. Over the longer term, this refinancing is expected to benefit net income by approximately $2.6 million per year until the loan's expiration in May of 2030. For the full year of 2025, we expect our tax rate to be consistent with that of FY '24.

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

Adjusted EBITDA of $146.6 million decreased 5% or $7.8 million as compared with a year ago, and Adjusted EBITDA margin decreased to 10.4% compared to last year's fourth quarter level of 11.8%.

Now, shifting to our balance sheet, which is highlighted on Slide 7. At April 30, we had cash on hand of $166.1 million and $655.9 million of available liquidity under our revolving credit facilities. We had no near-term debt maturities and our net Adjusted EBITDA debt leverage at the end of the quarter was 1.7 times, better than indicated following the Kamco transaction. Last year's leverage at the end of the fourth quarter for fiscal 2023 was 1.4 times.

As JT mentioned, subsequent to the end of our fiscal fourth quarter, we entered into an agreement to acquire 100% of the stock of Yvon Supply Company and affiliates for a purchase price of up to CAD196.5 million, or about USD143 million. With more than a quarter of the purchase price to be paid over the next five years, the transaction value is consistent with our track record of acquiring at or near GMS' market multiple.

For the 12 months ended February 29, 2024, Yvon generated net revenues in excess of CAD190 million, which is just under USD140 million at current exchange rates. This transaction, which we expect to close next month, is expected to be slightly margin accretive in line with our broader Canadian operations. We expect to fund this transaction with cash on hand and from borrowings under our ABL, which we expect would all else being equal, initially raise our net debt leverage ratio to just over 2 times Adjusted EBITDA with an expected one-half turn improvement over the course of FY '25.

Our team generated significant cash flow as we traditionally do during the fourth quarter. Cash provided by operating activities was $204.2 million for our fiscal fourth quarter compared to $204.8 million a year ago. Free cash flow was $186.7 million compared to $185.4 million for the same period last year. Free cash flow for the quarter totaled 127.4% of Adjusted EBITDA. For the full year, we generated cash provided by operating activities of $433.2 million and free cash flow of $376 million, representing 61.1% of Adjusted EBITDA, exceeding our expectations.

Capital expenditures was $17.5 million for the quarter compared to $19.4 million a year ago. For the full year fiscal 2025, we expect capital expenditures to total between $50 million and $55 million. We repurchased another 174,600 shares of stock during the quarter for $16 million and had $200.5 million of share repurchase authorization remaining at April 30.

Looking forward, we expect to continue our balanced approach of capital allocation with continued investment in our business and attractive M&A opportunities, while also seeking to opportunistically return value to our shareholders through our share buyback program. We have a solid balance sheet with no near term maturities and an attractive capital structure providing an effective foundation for the continued execution of our strategic priorities.

Before turning the call over to JT, I have just a couple of housekeeping items. First, we will have an equal number of selling days per quarter year-over-year for our first three quarters of fiscal 2025. In our fiscal fourth quarter, we will have 63 days compared with 64 in the prior year period. And second, the projections that JT will provide exclude any benefit we expect to get from Yvon after that transaction closes in the last month of our quarter.

With that, I'll now turn the call over to JT. He'll start on Slide 8.

John Turner

Thank you, Scott.

We are pleased with the results we delivered for fiscal 2024 and believe that despite some short-term pressures in our end markets, we are well positioned to pivot as needed to address any shifts in end market demand and economics as we move throughout fiscal 2025. The resilience we saw in wallboard

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

pricing during fiscal 2024 continued to prove out the new realities of the wallboard industry, including tight capacity with few newer planned additions expected in the near term, coupled with rising manufacturing costs, notably including those driven by the declining availability of synthetic gypsum, primarily in the Eastern U.S.

After a slow year for single-family activity with an undersupply of new and existing homes on the market, we've seen some improving trends, but anticipate a more substantial recovery to be tied to lower mortgage rates over time. Meanwhile, we believe that the long anticipated multifamily decline has indeed reached certain geographic markets, even as others continue to have significant units in backlog.

And as I stated earlier in my remarks, commercial put-in-place spending is flattening while starts are slowing. Therefore, we expect commercial conditions to be a bit bumpy going forward as certain mega projects, data centers and some other less financing sensitive projects likely continue, while smaller project starts are expected to be more limited until we see some improvements in rates.

Given this backdrop, let me turn to our expectations looking forward. Starting with wallboard volumes as compared to the prior year, we anticipate single family to be up mid-single-digits for our fiscal first quarter, and as we progress through the balance of the year on normal seasonality and without any expectation for accelerated market recovery, we expect growth to be in the high-single-digits for single-family wallboard volumes on a year-over-year basis.

Multifamily wallboard volumes will likely be flat to up slightly during our fiscal first quarter before declining progressively into the back half of our fiscal year. And commercial wallboard volumes are expected to be up low-single-digits for our fiscal first quarter before flattening for the next couple of quarters and then likely declining year-over-year in our fiscal fourth quarter.

Considering all of these end-market dynamics, in total for GMS, first quarter wallboard volumes are expected to be up low to mid-single-digits and also up mid-single-digits in the next couple of quarters thereafter. After a nearly one-year pause in pricing actions, we believe we have begun a renewed inflationary period for wallboard. Our pricing for wallboard is expected to remain resilient this quarter as we continue to work to pass through the earlier announced manufacturer price increases.

While implementation of these actions is taking longer than we would like, we expect to see some benefits from these price increases beginning in July, tempered by the impact of the expected mix shift from higher single-family volume. As such, we expect first quarter wallboard prices to be roughly flat as compared with the prior year period. Post our first quarter, we expect to see sequentially improved pricing in the low single-digits with further realization of this round of price increases.

For steel framing, as noted, pricing and gross margin have softened more than we expected and demand will most likely be choppy as multifamily high rise and certain commercial projects conclude while key mega projects and other commercial activity continue. For the first quarter, we expect volumes to be up low to mid-single-digitsyear-over-year, a notable slowdown from fiscal 2024 with prices down low single- digits sequentially and down in the low-teensyear-over-year. While the underlying rolled commodities are driven by other end market sectors and thus very difficult to predict, all of the major framing formers in our markets recently announced price increases, which should support some greater stability in future months.

In ceilings, given the noted level of activity in our commercial end market, we expect low to mid-teen increases year-over-year for volume, inclusive of recent acquisitions, and a low to mid-single-digit increase for price and mix. All considered, we expect healthy mid to high-teens sales growth in ceilings for the next several quarters.

Finally, net sales for our complementary products are expected to grow at mid-single-digit levels as compared with the first quarter of fiscal 2024, and we expect this pacing to continue through the remainder of the year.

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GMS, Inc. - Fourth Quarter Fiscal Year 2024 Earnings Conference Call, June 20, 2024

All in, as shown on Slide 9, we anticipate net sales for our fiscal first quarter to be up mid-single-digits as compared with a year ago, with organic sales up low single-digits despite the deflationary pressures in steel prices. For Q2 and the full year, we expect similar growth, but with some improved pacing versus Q1.

Principally on the continued pressures in steel pricing and the still in process implementation of wallboard pricing, we'd expect first quarter gross margins to be constrained versus prior year and prior quarter at approximately 31.5% before returning to more normal levels around 32% for the remainder of our fiscal year, despite actions being taken to manage near-term discretionary and investment spending.

We also expect that deflationary steel pricing relative to strong delivery activity will continue to have a deleveraging effect on SG&A for the quarter before improving later in the year. As a result, we anticipate Adjusted EBITDA to be in the range of $160 million to $165 million for our fiscal first quarter, with a slight margin improvement from our fourth quarter.

Assuming general stability elsewhere, given our outlook for markets and the actions we are taking to manage within them, we expect second quarter EBITDA margins to be consistent with prior year. And on a stronger overall year-over-year growth profile for the full year, we also expect to see year-over-year profitability improve in subsequent quarters.

Thank you for joining us today. Operator, we are ready to open the line for questions.

Operator

We will take our first question coming from the line of Trey Grooms with Stephens. Please proceed with your question.

Noah Merkousko

Good morning. Thanks for taking my questions. This is Noah Merkousko on for Trey.

Operator

(Audio interference) I apologize for that. Go ahead and continue, please.

Noah Merkousko

All right. Some cool tunes. Yes, so just…

John Turner

Hi, Noah.

Noah Merkousko

Hi. Yes, so just wanted to touch on wallboard pricing. I mean, it sounds like there's maybe some limited traction, but it's kind of taking longer than expected, and we'll kind of see that play out in the coming quarters. And so I guess, first I was wondering if you could kind of break out what you see as like-for-like pricing versus what you're seeing from a negative mix impact as you see single-family accelerate relative to commercial.

John Turner

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