Greetings. Welcome to GMS Third Quarter Fiscal 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to Leslie Kratcoski, Vice President, Investor Relations. Leslie you may now begin..

Thanks Rob. Good morning and thank you for joining us for the GMS earnings conference call for the third quarter of fiscal 2021. I'm joined today by John Turner, President and Chief Executive Officer and Scott Deakin, Vice President and Chief Financial Officer.

In addition to the press release issued this morning, we have posted presentation slides to accompany this call in the Investors section of our website at gms.com. 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 third quarter of fiscal 2021 relate to the quarter ended January 31st, 2021.

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.

JT?.

Thank you, Leslie. Good morning and thank you for joining us today. All of us at GMS hope everyone joining this call as well as your families and colleagues are remaining safe and well and that we may be getting closer to getting the COVID-19 pandemic behind us.

I'll start with a review of our operating highlights and then turn it over to Scott, who will cover our financial results. I'll then share some closing thoughts before taking your questions.

If you start on slide three, outstanding execution in the quarter by our entire team coupled with further strengthening in residential markets enabled us again to deliver results that exceeded our previous expectations.

The overall operating environment can be described as nothing short of dynamic including a stark contrast between a very strong residential market and continued softness in the commercial market, as well as significant activity on the pricing front and tightening availability of several product categories.

Our team continues to seize the opportunities and address the challenges of this landscape, delivering an increase in net sales on a per day basis in the quarter.

As anticipated, our gross margin of 32.4% was lower than the quarter record of 33.3% last year, but was in line with our prior expectation and consistent with that realized in the first half of the fiscal year.

Continued alignment of our cost structure to current demand enabled us to improve SG&A and adjusted SG&A as a percentage of sales for the third quarter in a row, while ensuring that we maintain the customer focus that continues to differentiate us in the market.

As a result, we realized an adjusted EBITDA margin of 8.3%, which reflects a 10 basis point improvement over the prior year despite lower sales.

We generated positive free cash flow and our balance sheet and liquidity position provide us with strong financial flexibility enabling us to continue our focused drive for growth via both greenfields and M&A.

On the health and safety front we maintain enhanced operating protocols aimed at reducing the spread of COVID-19 and the health and safety of our employees, business, partners, and communities remains our top priority. At the same time, we continue to realize benefits from the ongoing commitment to our strategic priorities.

This is evidenced by our ability to generate higher volume in wallboard through further penetration of residential end markets, increased sales of complementary other products, and our execution of several platform expansion transactions during, and just following the third quarter.

Considering the market under occurrence, which we continue to navigate we performed very well in the third quarter. My congratulations and thanks go out to the entire GMS team, who made these results possible remaining engaged, focused, and proactive, as we come together in support of our customers and each other.

At the same time, we offer our gratitude for the continued partnership we share with both our customers and suppliers. With that, I'll now turn it over to Scott to provide more perspective on our financial results for Q3.

Scott?.

Thanks J.T. Good morning, everyone. Looking at slide 4, net sales of $751.2 million were down 1.3% year-over-year as continued COVID-19 market pressures in commercial construction were largely offset by higher sales to residential construction. Adjusting for the one less selling day year-over-year daily net sales were up 0.3%.

This is the first quarter of positive per day sales growth since the onset of the pandemic. Organically, net sales and daily net sales were down just 1.9% and 0.3% respectively. The teams continued ability to reposition and realign resources to capture demand, where it is the strongest, allowed us to again exceed our previous sales expectations.

Wallboard sales of $311.1 million decreased 1% or 1.4% on an organic basis, due to a modest decline in price and mix partially offset by slightly higher volume. On a per day basis, however, wallboard sales increased 0.6% driven by 2.1% higher volume as strong residential volume more than offset lower commercial activity.

In light of our response to recent supplier pricing actions, realized wallboard price was up sequentially from the second quarter, as well as for the month of January up on a year-over-year basis.

Ceiling sales of $101.9 million decreased 9.6% year-over-year, virtually the same on an organic basis driven by lower volume and mix partially offset by higher price. Daily net sales of ceilings were down 8.1% year-over-year.

Steel framing sales of $104 million decreased 12.5% year-over-year, again, similar on an organic basis due principally to a decline in volume and to a lesser extent price and mix combined. On a per day basis, net sales of steel framing declined 11.1%.

Reflecting the upward movement in commodity steel prices our steel pricing lows, like wallboard up sequentially from the second quarter, as well as on a year-over-year basis for the month of January.

Consistent with the first half of fiscal 2021 year-over-year sales declines were seen principally in ceilings and steel, product categories tied primarily to commercial construction. Our commercial business exhibited a low double-digit year-over-year decline, which was similar to what we experienced in the second quarter.

Our complementary other product sales of $234.2 million increased 8.7%, up 7.5% on an organic basis year-over-year, due to our execution of growth initiatives to increase other product sales, positive contributions from acquisitions and strong pricing in certain product categories, including roofing, insulation and lumber.

Strength in our Canadian business for which other products comprises a larger portion of sales also contributed to this growth. Daily net sales of other products were up an impressive 10.5%.

Gross profit of $243.3 million decreased 4% compared to the third quarter of fiscal 2020 as expected on a relatively difficult year-over-year comparison gross margin of 32.4% declined 90 basis points, principally due to unfavorable mix in the commercial segment and price cost dynamics related to timing around the implementation of price actions.

Turning to slide 5. Adjusted SG&A expense as a percentage of net sales of 24.2% improved 100 basis points year-over-year.

Approximately 120 basis points of that benefit was realized from continued disciplined cost containment and productivity initiatives, as well as favorable business mix towards single-family residential, with respect to operating costs.

This was partially offset by 20 basis points associated with the previously mentioned deflationary price and unfavorable mix impact seen with certain of the company's products. As a result, third quarter adjusted EBITDA of $62.6 million was essentially flat compared to a year ago, despite a $10.2 million decrease in sales for the quarter.

Adjusted EBITDA margin of 8.3% improved 10 basis points year-over-year and represented a modest 1% decremental adjusted EBITDA margin. Turning to slide 6. We generated a free cash flow of $38.4 million or 61% of adjusted EBITDA in the third quarter.

This was lower year-over-year principally due to some proactive inventory build in advance of manufacturer price increases and to ensure product availability for our customers and made the anticipation of certain areas of tightening supply. Despite these actions, we generated healthy free cash flow and expect to continue to do so.

Capital expenditures of $6 million were consistent with last year and we maintain our estimate for cash capital expenditures in fiscal 2021 of approximately $25 million. As of January 31, 2021 we had cash on hand of $150.6 million and $407 million of available liquidity under our revolving credit facilities.

During the third quarter, we reduced our net debt by $34.3 million and net debt leverage was 2.9 times down from 3 times at the end of the second quarter of fiscal 2021 and down from the 3.3 times as of the end of the third quarter of fiscal 2020.

Our balance sheet remains healthy and our liquidity position of forges ample resources to continue pursuit of our strategic growth priorities. With that now let me turn the call back over to J.T., before we open the lines for questions. .

Thank you, Scott. While we remain laser-focused tactically in the current environment, we continue to execute on our long-term strategic growth priorities. Our third quarter progress on these four initiatives can be seen in many ways. First, expanding share in core products particularly in geographies where we are under-penetrated.

Our focus here is notably evidenced over the last few quarters by our increasing penetration in residential construction in geographies where we have historically been underrepresented. This enabled us to generate higher wallboard volumes year-over-year overcoming continued softness in commercial construction.

Next to diversify and profitably expand our product offering, we are focused on growing select other product opportunities outside of our core products.

Our multiple initiatives in both the United States and Canada are bearing fruit as evidenced by higher year-over-year growth in this category for the third quarter in a row despite variability across our end markets.

Third, we are developing our platform through accretive acquisitions and greenfield opportunities, while maintaining balanced progress in debt reduction.

During the third quarter, we opened a new greenfield location in Waco, Texas and stepping strongly into the fourth quarter on February 1, we closed on the acquisition of DL Building Supplies Inc., providing entrance to the important Ottawa-Gatineau market in Canada.

We complemented this with further US expansion launching a new location in the growing Atlantic City, New Jersey market as well as three new locations in Metro Memphis, Tennessee complementing our already strong position in Nashville. These moves enabled us to extend our geographic presence to four new and attractive markets.

At the same time, with the strength of our free cash flow we reduced our net debt by over $34 million. And finally, so that we deliver a best-in-class customer experience as well as drive productivity and further profit improvement, we are leveraging our scale and employing technology and best practices across the business.

Deployment of our e-commerce platform progresses with key adoption metrics by our customers continuing to increase.

In addition, we are deploying data management and visualization dashboards initially focused on the sales teams further leveraging our business intelligence capabilities to provide enhanced real-time insights as we focus on further driving growth and profitability. Before making some closing remarks a few thoughts about our fourth quarter.

In the near-term, we expect a continued bifurcation in residential and commercial market conditions. Continued strength in residential construction is well documented with a multitude of strong housing data and forecast, particularly around single family.

Commercial construction remains challenged with external forecast calling for a wide range of low to high single-digit declines in calendar 2021.

However, we are encouraged by the advancements being made in addressing in COVID-19, particularly with respect to vaccine deployment and believe that those will ultimately enable resumption of growth in commercial demand.

For our fourth quarter ended April 30, we currently expect to generate a low double-digit year-over-year increase in reported sales, noting that last year's fourth quarter was significantly impacted by COVID-19 related shutdowns in March and April. This estimate assumes end market conditions, similar to those experienced in the third quarter.

In terms of profitability, we anticipate a continuation of unfavorable mix and price/cost dynamics experienced in the third quarter, resulting in an expected year-over-year gross margin decline in the fourth quarter, similar to that realized in the third quarter.

As a result and coupled with continued SG&A leverage, we expect to generate an incremental adjusted EBITDA margin within the range of 10% to 20% for the fourth quarter of fiscal 2021. And turning to slide eight. In closing, GMS is well positioned, now and for the long term.

As the North American market leader in the distribution of specialty interior construction products, we enjoy significant scale advantages, employ a differentiated service model and embrace an entrepreneurial culture.

All three combined are enabling us to successfully execute for our customers and shareholders, while keeping the health and safety of our many contributing stakeholders as our top priority.

At the same time, our strong free cash flow generation, balance sheet and liquidity provide not only near-term advantages but enable us to effectively pursue our strategic priorities to capitalize on long-term growth opportunities.

Finally, as we conclude with slide nine, calendar 2021 marks the 50th anniversary of the founding of GMS and we are excited to be celebrating this important milestone.

I am confident that our focus on our strategic priorities, coupled with our team's capabilities and ongoing commitment to our tradition of delivering world-class service to our customers will enable us to generate value for our shareholders well into the future. Operator, we are now ready to open the call for questions. .

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from the line of Matthew Bouley with Barclays. Please proceed with your questions..

Hey. Good morning. Thanks for taking the questions. I wanted to ask about the platform expansion.

Just given you opened several new greenfields there at the end of the quarter and into the new quarter, is there anything we should read into that in terms of how you're thinking about M&A versus greenfields going forward, or are you sort of thinking about delevering the balance sheet more, or is that really just a timing issue? What kind of drove the decision to do so many greenfields there? Thank you..

Yes. Good morning, Matthew. So the reality of some of those greenfields were, those were existing businesses in the past that had struggled. And as we mentioned in prior calls, we had the opportunity to look at certain markets where there had been struggling competition.

And so, while these were not actual purchases they -- we classified them as greenfields. In many cases these were previously existing businesses. So we will be up and running much faster in those four markets than we would have been with a historical greenfield. So there's no real change in focus.

We still have six to eight new greenfields slated for our next calendar year. We may have one or two more in the next quarter. I think that there's still a balance between acquisition and greenfield. No real change in the strategy. We just took advantage of some opportunity here to add some really nice markets very quickly..

Okay. Understood. Second one on the margin side. You discussed in the quarter some of the price cost dynamics on the gross margin side impacting. Obviously, there's more price increases. We've heard sort of coming through the pike perhaps this month in wallboard. I think I heard you say that this expectation, some of these impacts should continue.

Just my question is, is there any reason that as more price increases come down the line that the headwind you're currently seeing in the gross margin should get any larger than it already is, or as you guys kind of catch-up on pricing this kind of level of gross margin where we're at today should be relatively consistent.

Just any kind of puts and takes on how to think about that going forward? Thank you..

Yes. I mean, I think you summarized it nicely and that as we continue to catch the price increases, there's a lag period obviously between implementation price increases and what we actually pay for goods and then what we can actually charge for those goods.

And being GMS and being prudent and also being a customer-friendly company, there are times when we need to help our customers push pricing into the market as well. And in many cases it's more difficult for them than it is for us and certainly more difficult for our customer base than it is for the manufacturing base to take price increases.

So they tend to take a little while to get through the pipeline and that's where we are right now. I think we just mentioned that we expect the fourth quarter to look a lot like the third quarter from a year-over-year decline perspective on a percentage basis.

So, we're thinking the same kind of degree of increase and we're getting pricing, and we mentioned that also in both steel and in wallboard. So it's just how much can we get through with what's coming back up into the pipeline. So the next big wallboard increase that's been announced is in April.

But a lot of the other product categories as you know are just continually trying to increase price at the moment. Steel is kind of on a monthly increase basis. Insulation continues to be inflationary lumber, continues to be inflationary although it seems to be topping out potentially, roofing a little bit inflationary.

So I think that we will basically do what we said we would do, and our view of this quarter is it going to look a lot like last quarter from a year-over-year perspective. .

I would just add Matt if you look back across a couple of quarters before that you've got a deflationary environment where pricing actions were being put in place. I think as we've talked about in prior calls, those weren't necessarily taking hold, but in this environment it's just a completely different context.

It takes a little while to turn that ship. But we believe it's headed back towards a more inflationary direction at least in the short-term..

Got it. Thanks Scott. Thanks JT. And good luck in Q4..

Thank you. Appreciate it..

Our next question comes from the line of Noah Merkousko with Stephens. Please proceed with your question..

Hi. Thanks for taking my questions. So, first, I just wanted to ask, how are the lead times with your suppliers right now? We've been hearing that there have been some shortages for wallboard in some markets just given the strength in housing.

Have you guys seen any of that?.

We have. As the largest player in the space, we tend to be in a better inventory position. As we mentioned, we used our balance sheet intelligently during the quarter to continue to bring inventory into service our customers. We don't have acute problems, but we're certainly in some markets at a level that -- a little lower than we'd like to be.

The weather didn't help here this last month in Texas in particular with several of the wallboard manufacturers having to be shut down, the latex issues coming out of Houston for some of the other products, as well as natural gas problems for the Mexican wallboard producer. They pulled their gas out of Texas. So they had some problems too.

So I think that's just going to exacerbate things for a few weeks. But we're getting the wallboard we need for the most part. We are not running out on a regular basis across multiple locations or anything like that. Steel has a very extended lead time right now. I mean, steel is out anywhere from eight to 12 weeks, and we've taken that into account.

Again, we brought inventory up to account for that lead time. I think that's just going to be more of a difficult environment to operate in as contractors are going to have to be prepared to provide 12 weeks of lead time on special order steel. And that's a reflection of the inventory of the manufacturers not being available the raw material.

It's just taking them a long time to get rolled steel. Everything else is okay spotty hand-to-mouth insulation is tight. I think you've heard all the roofing guys talk about roofing being tight. I mean, it's tight, but it's not acute at this point..

Got you. And then a quick follow-up here. The other products growth in the quarter was pretty impressive. Just your thoughts going forward there.

I know this is a strategic focus for you guys, but should we continue to expect this kind of magnitude? And then maybe you guys talked about seeing inflation in insulation and lumber and some of those other products.

So is -- can you kind of break out the growth there between volume and price?.

I mean we – because of the complexity of the product category, we don't have it as easily as we would with wall wallboard, steel or ceilings. But just from a gut check perspective, there's certainly a good percentage of that growth is price. I wouldn't chalk up more than half of it to price for sure, as we continue to drive good volumes.

We're having a lot of success in Canada and we're having a lot of success in the US in insulation in lumber in particular. We have a business called tool Source warehouse, up underneath. We don't talk about it a lot. It's a fantastic supply business. It's doing very well.

So I feel like we will continue to have good success in other products will they be 10% on a safety basis going forward? I don't think we expect that, but we do expect good single-digit growth in that category moving forward..

Great. That’s helpful. And I’ll leave it there..

Thank you..

Thank you. Our next question is from the line of Dave Manthey with Baird. Please proceed with your question..

Hi, good morning, everyone. Just to clarify on the gross margin guidance, where you're talking about a similar decline year-over-year. You're talking about the dollars being down a similar percentage year-over-year. You're not talking about percent of sales being down the same amount.

Are you?.

Well, specifically, we're talking about gross margins. So Dave, if you look at of this year versus last year we were down about 90 basis points that order of magnitude on a gross margin basis is in the ballpark of what we're talking about for Q4 as well..

Okay. Could you talk a little bit about the drivers there? It seems like you've been pretty steady in a 32.4% to 32.6% range. And that would imply sort of a 60 basis point drop-off sequentially.

Could you talk about what the drivers are that are leading to that kind of outcome?.

Yes, there's two things. The commercial mix versus the residential mix. The residential mix is much stronger right? So we automatically get a little bit of a downside impact to our gross margins with residential products versus commercial products. And then the price cost dynamics, we just talked about and that's just pushing that through.

So as long as we're chasing price increases, which again, we're anticipating a continued inflationary environment during the quarter similar to what we just experienced. Now if that was to change then maybe gross margins would be a little bit better.

But we do anticipate chasing across our other product category as well as potentially wallboard and steel in particular, we do anticipate chasing these prices up. Eventually that stabilizes. And we kind of return to what we would expect to be the long-term, solid good average that we expect to get out of our gross margins.

In the meantime, continuing to keep our costs in check and being sure that we – we're doing that prudently so we can continue to deliver a nice bottom line..

I think we'd agree with you, Dave. If you look at that number relative to a trend, certainly it's a tick lower but we continue to guide towards more adjusted EBITDA as the best indication of the profitability for the business because while there's a little bit of decline in gross margin, we're making up for that in our operating costs.

And certainly, you see that in the kind of decrementals we're talking about for the fourth quarter and that you saw in the third quarter as well..

Right.

And that brings me to the next question, which is without giving specific guidance when you think about fiscal 2022 and where those lines intersect, do you think you can get back to a somewhat normal contribution margin there, or could it be actually better in fiscal 2022 than usual?.

I guess that's going to depend on the inflationary environment on the product side, right now. I don't think 2022 we're going to see a lot of inflation on the cost side of the business. I think we've got that identified in a tremendous amount of work and focus on that part of the business by all of our team.

So, if the inflationary environment on the cost side of what we're buying was to level off then could we be better than our – in our previous 10% to 15%, we were kind of delivering from an incremental perspective on sales. We could be a little bit better for a period of time than that.

But at the moment we're viewing next quarter out and given that 10% to 20% range..

Got it. Okay. Thank you very much..

Thank you. Our next question is from the line of Steven Ramsey with Thompson Research Group. Please proceed with your question..

Hi, good morning. Maybe to start with you mentioned weather in Texas impact disrupting the supply chain.

Can you maybe talk to if there is some level of meaningful incremental demand coming from damage there in the coming quarters?.

I think there'll be some, but again that demand a lot of that is residential remodel type demand and we're not -- we don't do it as big a business particularly in Texas and residential remodels we might another in other parts of the country.

But I'm not sure it's nothing like the Houston floods right? I mean, the damage was done and everybody's got some wallboard that has to be replaced in their homes but it's not entire homes, entire levels of homes, entire warehouses, et cetera. So it's not going to be an event like we saw down there a few years ago with the hurricane for sure..

Okay. And then I wanted to think about the expansion in Memphis, Nashville MSAs you discussed, which is a three-hour difference between them since that's my neck of woods.

Curious to think about how -- this is maybe a framework for expanding your network when there's meaningful distance between two MSAs, how you can do greenfields and acquisitions and how two distant MSAs can complement each other as you expand? Is this something that you think is a meaningful push for you guys going forward?.

I mean, this is right in line. We were not in Memphis at all. It was one of the major MSAs we were not in previously. So we've talked about white space. We would have considered Memphis white space. Atlantic City was also white space for us. So we had that advantage.

But when we mentioned Nashville and we talk about Memphis there's -- and also back down to Jackson, Mississippi there's some customer crossover for sure. And so customers that we do business with in Nashville did not have the opportunity to do business with us in Memphis.

And we think we have a differentiated service model and we continue to drive that entrepreneurial culture and I think customers enjoy that and like to buy from us as a result and being available to them in Memphis is important. But the reality of the strategic play here is that we just weren't in Memphis. And now we are.

So there's not a tremendous amount of let's say logistics coordination between National and Memphis. It can be done and we certainly have delivered into Memphis in the past for great customers that needed us to. But I think the bigger news here is we're in a new MSA that we were not in before in a meaningful way.

And we've assumed some locations and some people that are really, really good in our space that existed previously in a previous supplier in that market that for generations had a wonderful brand name, it just got into trouble. And we've been able to get up to speed pretty quickly. So feel great about the Memphis expansion..

Great. Thanks..

Thank you..

Our next question comes from the line of Mike Dahl with RBC Capital Markets. Please proceed with your question..

Good morning. Thanks for taking my questions..

Sure, Mike..

I wanted to ask first about non-revs and you laid out what are the ranges that are being put out there by some forecasters. But based on what you've been reporting, it doesn't seem immediately clear that there's been any real inflection. Maybe there's been some stabilization on your non-revs commercial business.

I was hoping you could elaborate what you're seeing or hearing from the field what you're seeing on bidding activity, anything incremental on project delays or cancellations that would be relevant as we think through and in commercial aside from just obviously you'll come up against some easier comps.

But just curious to get some color on incremental changes or anything on green shoots and that sort of stuff?.

Sure. I mean, from a cancellation perspective, I think most of what's going to be canceled been canceled. And that's what we're hearing. There are still some delays. There are still some people not comfortable getting started, not sure what the environment might look like six, 10, 12, 18 months from now and neither are we all that sure.

And, obviously, as you can tell by the -- when you talk about the AIA consensus when you have really smart people, one group of really smart people saying commercial is going to be down 1% and another group of really smart people saying commercial is going to be down 10%, they don't know either.

So I think that what we're seeing is relatively flat beating activities. It's kind of in line with the volume and where we are today. And the big gap for us at the moment is this tenant work and short-term commercial remodel.

That's just not happening that I still think that with a light at the end of the tunnel that we know is not the proverbial train when it comes to COVID that we should see some pickup in that environment. We should see some commercial remodel.

And maybe Texas will be an early indicator of that I don't know with the market being opened up this week, we'll see how people are and how comfortable people are with that environment and their willingness to go back out and spend on services versus goods.

And I think that's just another indicator we can all look at right? We'll look at services, consumption versus goods, consumption as people move back into that category that will drive a lot of commercial spending. If overnight hotels were to fill up and office space was to fill up, I think we see a lot of remodel activity kick in.

But again, everybody -- nobody's best guess that's why in the fourth quarter we expect conditions to remain very much like they were in the third. .

Got it. Okay. That's helpful. And that kind of segues into my second question, which is really more specifically about fourth quarter revenue that guide for up low double-digits. That seems fairly strong. And then your comps do get a little bit easier, but they didn't drop off more meaningfully until I think your fiscal 1Q.

So it's not a huge difference in comps. It doesn't sound like there's a meaningful near-term inflection in the commercial side. So can you just give us the building blocks for how to get to that low double-digits? I know there was a question earlier that asked about price volume.

I thought that was other products, but just any sense of kind of the inflationary aspect behind that versus volume and would be great?.

Yes. I mean the one thing in that whole comment statement you said that was not correct, is the April declines of last year were very significant because that was the first full month of complete shutdown for COVID. So I think we gave a big number last year a pretty significant number somewhere around $60 million of volume in the quarter in dollars.

Again, it was a rough estimate based on everything that was going on that we lost as a direct result of COVID. We're not -- and now we're in an environment where we're rolling over that and we're looking at our business conditions in the third quarter and how we performed organically in the third quarter.

And the reality is how we performed organically in the third quarter plus the acquisition volume that we just acquired up in Canada, great acquisition in Canada by the way really excited about that one. That inorganic volume in the quarter gets you to low double-digit growth for our business. .

Plus the inflationary dynamics that are part of the equation as well. .

Okay. So if I'm thinking through like monthly cadence, I was looking at kind of the overall quarter, but it would -- it sounds like it might be something like low single-digit growth in Feb, March similar to what you're exiting you exited 3Q and then you get back to the significant volumes -- volume in April.

Is that fair thinking through the month please?.

Yes. Yes that's exactly right. And February is technically going to be a little challenge. We're going to have to make it up because of the weather that we had across the country in February and particularly in the south. .

Okay. Got it. Got it. Okay. Thanks..

Thank you..

Thank you. At this time, we've reached the end of the question-and-answer session. And I'll now turn the call back to Leslie Kratcoski for closing remarks. .

As always thanks for joining us this morning. A replay of the call will be available shortly on gms.com and we certainly appreciate your interest. Good day. .

Bye. Thank you. .

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation..