Record top and bottom-line annual
results
Cash flow from operations grows to US$127 million in the fourth quarter
LANGLEY,
BC, March 13, 2023 /CNW/ - ADENTRA Inc.
(formerly, Hardwoods Distribution Inc.) ("ADENTRA" or the
"Company") (TSX: ADEN) today announced financial results for the
three and twelve months ended December 31,
2022. ADENTRA is one of North
America's largest distributors of architectural building
products to the residential, repair and remodel, and commercial
construction markets. The Company currently operates a network of
87 facilities in the United States
and Canada. All amounts are shown
in United States dollars
("U.S. $" or "$"), unless otherwise noted.
Financial Highlights for 2022
- Sales grew 59.6% to a record $2.6
billion (C$3.4 billion), from
$1.6 billion (C$2.0 billion) in 2021, an increase of
$963.4 million (C$1.4 billion)
-
- Sales results included organic growth1 of 14.6% and
acquisition-based growth1 of 45.8%
- Gross profit grew 49.3% year-over-year to $556.7 million; gross margin percentage of
21.6%
- Operating expenses as a percentage of sales remained stable at
14.0%
- Adjusted basic earnings per share1 increased to a
record $5.71 per share, up 9.6%, or
$0.50, year-over-year; basic earnings
per share increased 14.3%, or $0.69,
to $5.50 per share
- Adjusted EBITDA1 climbed 37.2% to a record
$267.9 million (C$348.7 million) and Adjusted EBITDA
margin1 of 10.4%; net income increased 24.7% to
$128.7 million (C$167.4 million)
- Cash flow from operating activities grew to $210.7 million, including cash flow from
operating activities of $127.2
million in the fourth quarter
-
- Inventory destocking contributed $81.8
million of the fourth quarter cash release
- Effectively deployed capital throughout the year: Completed the
purchase of Mid-Am for $273.7
million; repurchased 1,245,028, or over 5%, of the Company's
issued and outstanding shares; and announced an increase to the
quarterly dividend of 8%, the Company's tenth increase in the last
ten years
- Ended the year with a strong balance sheet, and a Leverage
Ratio1 of 2.4 times
Other Highlights
- Released our inaugural sustainability report in February 2023
- Acquired Rojo Distributors in February
2023
- Unveiled growth plans, including our "Destination 2026" goal of
$3.5 billion in run-rate sales by
2026
- Disclosed our strategic priorities, including a continued focus
on digital engagement with our customers
- Rebranded the Company to ADENTRA
___________________________
|
1 See
"Non-GAAP and other Financial Measures".
|
|
"It was an exceptional year for ADENTRA as our growth strategy,
proven business model, and disciplined operating management drove
record top and bottom-line performance," said Rob Brown, ADENTRA's President and CEO. "Our
results were supported by our business platform, which is now more
balanced than at any time in our history and includes significant
diversification of end-markets, customer channels, product
categories, and geographic coverage."
"Our strong financial performance further enabled us to generate
over $210 million of cash flow from
operations in 2022, which speaks to our business model's ability to
translate financial results into attractive cash flows. We put this
capital to work to enhance shareholder value, including financing
the purchase of the Mid-Am acquisition, repurchasing over 5% of our
issued and outstanding shares, and increasing our quarterly
dividend by 8%."
"Heading into 2023, we are already creating new value for
shareholders," added Mr. Brown. "In February
2023, we closed on our acquisition of Rojo Distributors,
which strategically complements our footprint and product mix in
West Texas. Also in February, we
reached a new milestone as we issued our first sustainability
report. Our intention is to build a highly sustainable future for
ADENTRA and our stakeholders, and we believe reporting on our
progress will help to support this goal."
"As we move forward, we will continue to closely monitor
changing economic conditions and the impacts that price inflation,
rising interest rates, and other factors can have on our business.
We benefit from an experienced team with a long track record of
successfully managing our operations and controlling costs through
changing markets. We are further supported by our diversification
and by our proven ability to generate cash flows even in periods of
reduced activity."
"On a multi-year basis, we continue to see runway for growth and
value creation as we benefit from our leading market
position, the long-term fundamentals underpinning the North
American buildings products market, and our proven strategies for
achieving profitable growth. Our top-line goal, as set out at our
most recent analyst day, is to achieve $3.5
billion in run-rate sales by 2026. I am confident in our
ability to achieve this goal and excited by the opportunity to
continue building long-term value for our shareholders in the
process," said Mr. Brown.
Outlook
Rising inflation and interest rate hikes are expected to have a
near-term negative impact on economic activity. This, in
turn, will result in a moderation of demand for our products and
could lead to softer product pricing and volumes as compared to our
recent trend. As a result, we expect reduced financial performance
in 2023 as compared to the record setting levels achieved in
2022.
Sales pace in January and February of 2023 was similar to that
in the fourth quarter of 2022. Gross margin percentage through the
first two months of 2023 was 20%.
As we have demonstrated in previous business cycles, we intend
to effectively manage our business and cash flows. Our size and
scale, together with the diversity in our product categories,
customer channels and end-markets, provide important stability
while reducing our exposure to any one geography or segment of the
economy. Additionally, we maintain a strong balance sheet which
provides financial stability through periods of changing market
conditions. Our business model also converts a high proportion of
EBITDA to operating cash flows before changes in working capital.
During periods of reduced activity, our investment in working
capital typically decreases, resulting in an additional source of
cash.
Over the longer term we expect demand for our
products to remain robust, supported by strong fundamentals in our
end markets. We continue to see a multi-year runway for growth in
the repair and remodel, residential, and commercial markets we
participate in.
Outlook for our end-markets
Growth rates in the repair and remodel market (~40% of
sales) are expected to moderate in 2023 following two years of
higher-than-normal growth. The Joint Center for Housing Studies of
Harvard University anticipates a growth
rate of 2.6% for the U.S. repair and remodel market by the fourth
quarter of 2023. Overall, market fundamentals are well supported by
record levels of home equity in the U.S. and a median home age of
over 40 years. Disaster repairs and mitigation projects following
Hurricane Ian are also expected to support the home remodeling
market in the coming year.
In the residential construction market (~40% of sales),
new building starts decreased 25% in 2022 as affordability
headwinds weigh on consumers. However, we continue to benefit from
an elongated demand curve, with significant volumes of homes
already under construction still moving toward completion and our
products typically installed during the finishing stages of home
construction. Over the longer term, leading indicators for the
residential construction market remain favorable. Housing starts
have meaningfully lagged population growth this past decade and
this supply deficit, combined with positive demographic factors, is
expected to underpin long-term demand for new housing.
The demand outlook for U.S. commercial markets (~15% of
sales) is mixed, with some sectors showing strength and others
recovering at a slower pace. Commercial market participation is
highly diverse for ADENTRA and includes construction activity in
healthcare, education, public buildings, hospitality, office,
retail facilities and recreational vehicles. We expect this market
to be flat in 2023.
As we move forward, we are well positioned with an
industry-leading, world-class platform for architectural
products that supports the continued growth and profitability of
our business. This includes continued opportunities for
acquisition-based growth in a highly fragmented industry. Although
we are one of the largest distributors in our industry, our market
share amounts to approximately 6%. We see significant market share
opportunities, both organic and acquisitions based, which we intend
to capture. Our goal is to grow sales to $3.5 billion by 2026 (run-rate). Further details
on our goal and financial KPI's can be found in the investor
presentation on our website.
Q4 and Year-end 2022 Investor
Call
ADENTRA will hold an investor call on Monday March 13, 2023 at 8:00 am Pacific (11:00
am Eastern). Participants should dial 1-888-664-6392 or
(416) 764-8659 (GTA) at least five minutes before the call begins.
A replay will be available through March 27,
2023 by calling toll free 1-888-390-0541 or (416) 764-8677
(GTA), followed by passcode 344267.
Summary of Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
|
Three
months
|
|
For the
year
|
|
For the
year
|
|
|
ended
December 31
|
|
ended
December 31
|
|
ended
December 31
|
|
ended
December 31
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Total sales
|
$
|
574,734
|
|
$
|
515,353
|
|
$
|
2,579,568
|
|
$
|
1,616,199
|
|
Sales in the
US
|
|
533,179
|
|
|
470,727
|
|
|
2,380,659
|
|
|
1,441,119
|
|
Sales in Canada
(CAD$)
|
|
56,987
|
|
|
56,268
|
|
|
258,840
|
|
|
219,803
|
|
Gross profit
|
|
116,174
|
|
|
122,890
|
|
|
556,749
|
|
|
372,910
|
|
Gross profit
%
|
|
20.2 %
|
|
|
23.8 %
|
|
|
21.6 %
|
|
|
23.1 %
|
|
Operating
expenses
|
|
(91,567)
|
|
|
(76,419)
|
|
|
(360,117)
|
|
|
(224,579)
|
|
Income from
operations
|
$
|
24,607
|
|
$
|
46,471
|
|
$
|
196,632
|
|
$
|
148,331
|
|
Add: Depreciation and
amortization
|
|
16,931
|
|
|
12,516
|
|
|
65,455
|
|
|
36,579
|
|
Earnings before
interest, taxes, depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization
("EBITDA")2
|
$
|
41,538
|
|
$
|
58,987
|
|
$
|
262,087
|
|
$
|
184,910
|
|
EBITDA as a % of
revenue
|
|
7.2 %
|
|
|
11.4 %
|
|
|
10.2 %
|
|
|
11.4 %
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
(16,931)
|
|
|
(12,516)
|
|
|
(65,455)
|
|
|
(36,579)
|
|
Net finance
expense
|
|
(13,765)
|
|
|
(4,016)
|
|
|
(33,862)
|
|
|
(10,680)
|
|
Income tax
expense
|
|
2,548
|
|
|
(10,310)
|
|
|
(34,102)
|
|
|
(34,506)
|
|
Net income for the
period
|
$
|
13,390
|
|
$
|
32,145
|
|
$
|
128,668
|
|
$
|
103,145
|
|
Basic earnings per
share
|
$
|
0.59
|
|
$
|
1.47
|
|
$
|
5.50
|
|
$
|
4.81
|
|
Diluted earnings per
share
|
$
|
0.58
|
|
$
|
1.46
|
|
$
|
5.47
|
|
$
|
4.77
|
|
Average U.S. dollar
exchange rate for one Canadian dollar
|
$
|
0.736
|
|
$
|
0.793
|
|
$
|
0.768
|
|
$
|
0.798
|
|
Analysis of Specific
Items Affecting Comparability (in thousands of Canadian
dollars)
|
|
Three
months
|
|
Three
months
|
|
For the
year
|
|
For the
year
|
|
|
ended
December 31
|
|
ended
December 31
|
|
ended
December 31
|
|
ended
December 31
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Earnings before
interest, taxes, depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization
("EBITDA"), per table above
|
$
|
41,538
|
|
$
|
58,987
|
|
$
|
262,087
|
|
$
|
184,910
|
|
LTIP expense
|
|
972
|
|
|
1,960
|
|
|
3,899
|
|
|
5,537
|
|
Professional
fees
|
|
1,061
|
|
|
—
|
|
|
1,061
|
|
|
—
|
|
Transaction
expense
|
|
—
|
|
|
711
|
|
|
892
|
|
|
4,782
|
|
Adjusted
EBITDA
|
$
|
43,571
|
|
$
|
61,658
|
|
$
|
267,939
|
|
$
|
195,229
|
|
Adjusted EBITDA as a
% of revenue
|
|
7.6 %
|
|
|
12.0 %
|
|
|
10.4 %
|
|
|
12.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period, as reported
|
$
|
13,390
|
|
$
|
32,145
|
|
$
|
128,668
|
|
$
|
103,145
|
|
Adjustments, net of
tax
|
|
1,653
|
|
|
2,246
|
|
|
4,909
|
|
|
8,558
|
|
Adjusted net income for
the period2
|
$
|
15,043
|
|
$
|
34,391
|
|
$
|
133,577
|
|
$
|
111,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share, as reported
|
$
|
0.59
|
|
$
|
1.47
|
|
$
|
5.50
|
|
$
|
4.81
|
|
Net impact of above
items per share
|
|
0.07
|
|
|
0.10
|
|
|
0.21
|
|
|
0.40
|
|
Adjusted basic earnings
per share
|
$
|
0.66
|
|
$
|
1.57
|
|
$
|
5.71
|
|
$
|
5.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share, as reported
|
$
|
0.58
|
|
$
|
1.46
|
|
$
|
5.47
|
|
$
|
4.77
|
|
Net impact of above
items per share
|
|
0.07
|
|
|
0.10
|
|
|
0.21
|
|
|
0.40
|
|
Adjusted diluted
earnings per share2
|
$
|
0.65
|
|
$
|
1.56
|
|
$
|
5.68
|
|
$
|
5.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________
|
2 See
"Non-GAAP and other Financial Measures".
|
|
Results from Operations - Year
Ended December 31, 2022
For the year ended December 31, 2022, total sales increased
59.6% to a record $2.6 billion, from
$1.6 billion in 2021. Of the
$963.4 million year-over-year
improvement, organic sales growth accounted for a $236.4 million, or a 14.6%, increase in total
sales. Acquisition-based growth, including Novo's January to
July 2022 revenue of $453.5 million and Mid-Am's February to
December 2022 revenue of $287.5 million, increased consolidated revenue by
a combined 45.8% year-over-year. These gains were partially offset
by the first quarter 2021 divestiture of our Hardwoods of
Michigan ("HMI") business, which
resulted in $6.4 million of sales not
recurring in the current period and a $7.6
million unfavorable foreign exchange impact related to the
translation of Canadian sales to U.S. dollars for reporting
purposes.
Full-year sales from our U.S. operations grew $939.5 million, or 65.2% to $2.4 billion, from $1.4
billion in 2021. Organic sales growth accounted for
$198.6 million of this improvement,
representing a 13.8% year-over-year increase in U.S. sales. The
strong organic sales growth was primarily supported by robust
market demand, which in turn contributed to improved product
prices. The Novo and Mid-Am operations contributed an additional
$741 million to U.S. sales growth for
the period, representing a 51.4% increase in U.S. sales over the
same period last year.
In Canada, full-year sales
increased by C$39.0 million, or
17.8%, compared to 2021. The Canadian sales growth was entirely
organic and reflects the strong market demand, which resulted in
improved market prices for our products year-over-year.
Gross profit for the year ended December
31, 2022 grew 49.3% to $556.7
million, from $372.9 million
compared to 2021. This $183.8 million
improvement reflects our significant organic growth and
acquisition-based growth. At 21.6%, our 2022 gross profit as a
percentage of total sales was below the exceptionally strong 23.1%
achieved in the prior year. Our 2021 gross profit percentage was
temporarily elevated due to favorable market dynamics, including
strong demand and tight supply.
For the year ended December 31, 2022, operating expenses
were $360.1 million as compared to
$224.6 million the prior period, an
increase of $135.5 million. As a
percentage of total sales, operating expenses for the year ended
December 31, 2022 were well
controlled at 14%, similar to 13.9% in 2021.
The $135.5 million increase in
operating expenses includes $102.2
million of expenses related to the acquisition and
operations of the Novo and Mid-Am businesses ("Acquired
Businesses"), $23.0 million to
support organic growth, and $14.9
million of amortization on intangible assets acquired in
connection with the Novo and Mid-Am acquisitions. These increases
were partially offset by $3.9 million
higher transaction costs incurred in 2021 compared to 2022.
For the year ended December 31, 2022, depreciation and
amortization increased by $28.9
million to $65.5 million, from
$36.6 million in 2021. This increase
mainly relates to the acquisition and operations of the Acquired
Businesses and is primarily comprised of $14.9 million of amortization on acquired
intangible assets and $13.3 million
from depreciation related to operations.
For the year ended December 31, 2022, net finance expense
increased to $33.9 million, from
$10.7 million in the prior year. The
increase reflects higher interest rates combined with the issuance
of new bank indebtedness used to finance the acquisitions of Novo
and Mid-Am.
For the year ended December 31, 2022, income tax expense
decreased to $34.1 million, from
$34.5 million in 2021, primarily
driven by a higher effect of tax rate differentials and
restructuring and partially offset by higher income before income
taxes.
Adjusted EBITDA climbed 37.2% to $267.9
million in 2022, from $195.2
million in 2021. This $72.7
million improvement reflects the $183.8 million increase in gross profit,
partially offset by the $111.1
million increase in operating expenses (before changes in
depreciation and amortization, LTIP expense, professional fees, and
transaction expenses).
Net income for the year ended December 31, 2022 grew 24.7%
to $128.7 million, from $103.1 million in 2021. The $25.5 million improvement primarily reflects the
$77.2 million increase in EBITDA,
partially offset by a $28.9 million
increase in depreciation and amortization, and the $23.2 million increase in net finance
expense.
For the year ended December 31, 2022, basic earnings per
share climbed 14.3% to $5.50, from
$4.81 in 2021. Adjusted net income
increased 19.6% to $133.6 million,
from $111.7 million in 2021 and
Adjusted diluted earnings per share grew 9.9% to $5.68, from $5.17
in 2021.
Results from Operations - Three
Months Ended December 31, 2022
For the three months ended December 31, 2022, total sales
grew 11.5% to $574.7 million, from
$515.4 million in the same period in
2021. This $59.4 million increase was
driven by the acquisition of Mid-Am, which contributed $68.5 million of sales during the period. This
was partially offset by a $5.9
million, or 1.1%, decrease in organic sales, and by a
$3.2 million unfavorable foreign
exchange impact related to the translation of Canadian sales to US
dollars for reporting purposes.
Fourth quarter sales from our U.S. operations grew 13.3% to
$533.2 million, an increase of
$62.5 million from $470.7 million in the same period in 2021.
Incremental revenue from the acquisition of Mid-Am contributed
$68.5 million to fourth quarter U.S.
sales growth, representing a 15% increase in U.S. sales. This was
partially offset by a $6.0 million,
or 1.3%, decrease in organic sales, reflecting lower volumes,
partially offset by higher year-over-year product prices.
In Canada, fourth quarter sales
increased by C$0.7 million, or 1.3%,
compared to the same period in 2021. The Canadian sales growth was
entirely organic and reflects higher product prices year-over-year,
partially offset by a modest decrease in volumes.
We generated gross profit for the fourth quarter of $116.2 million, as compared to $122.9 million in the same period last year. The
$6.7 million, or 5.5%, year-over-year
change reflects lower organic sales and a reduced gross profit
percentage of 20.2%. Gross profit in the fourth quarter included
$7.6 million of inventory
write-downs. Excluding the impact of these inventory write-downs,
gross profit as a percentage of total sales was 21.5% as compared
to 24.1% in Q4 2021. The unusually high gross profit percentage
achieved in the fourth quarter of 2021 was not expected to repeat
and reflected favorable market dynamics, including strong demand
and tight supply which resulted in a rapid increase in product
prices in that period.
For the three months ended December 31, 2022, operating
expenses increased by $15.1 million
to $91.6 million, from $76.4 million in the same period last year. As a
percentage of sales, operating expenses were 15.9%, as compared to
14.8% in the same period last year.
The $15.1 million increase in
operating expenses includes $8.7
million related to incremental operating expenses from the
Acquired Businesses, $3.9 million
related to organic growth initiatives, including temporary
inventory storage and sales and marketing activities, and
$2.6 million of amortization on
intangible assets acquired in connection with the Mid-Am
acquisition.
For the three months ended December 31, 2022, depreciation
and amortization increased to $16.9
million, from $12.5 million in
Q4 2021. This $4.4 million increase
primarily relates to the acquisition and operations of the Mid-Am
business and is comprised of $2.6
million of amortization on acquired intangible assets and
$1.4 million from depreciation
related to operations during the period.
For the three months ended December 31, 2022, net finance
expense increased to $13.8 million,
from $4.0 million in the same period
last year. This increase was primarily driven by higher interest
rates and interest costs on the additional bank indebtedness used
to finance the acquisitions of Novo and Mid-Am.
For the three months ended December 31, 2022, income tax
recovery was $2.5 million compared to
$10.3 million income tax expense last
year, primarily reflecting lower taxable income and the benefit of
tax restructuring.
We generated Adjusted EBITDA of $43.6
million in Q4 2022, as compared to $61.7 million during the same period in 2021. The
$18.1 million, or 29.3%, change was
driven primarily by the $6.7 million
decrease in gross profit and the $11.4
million increase in operating expenses (before changes in
depreciation and amortization, LTIP expense, professional fees and
transaction expenses).
Net income for the fourth quarter of 2022 was $13.4 million, as compared to $32.1 million in Q4 2021. The $18.8 million or 58.3% change primarily reflects
the $17.4 million decrease in EBITDA,
the $4.4 million increase in
depreciation and amortization, and the $9.7
million increase in net finance expense, partially offset by
the $12.9 million decrease in income
tax expense.
For the three months ended December 31, 2022, we generated
basic earnings per share of $0.59, as
compared to $1.47 in Q4 2021.
Adjusted net income was $15.0
million, as compared to $34.4
million in Q4 2021, and Adjusted diluted earnings per
share was $0.65, as compared to
$1.56.
About ADENTRA
ADENTRA is one of North
America's largest distributors of architectural building
products to the residential, repair and remodel, and commercial
construction markets. The Company currently operates a network of
87 facilities in the United States
and Canada. ADENTRA's common
shares are listed on the Toronto Stock Exchange under the symbol
ADEN.
Non-GAAP and other Financial
Measures
In this news release, reference is made to the following
non-GAAP financial measures:
- "Adjusted EBITDA" is EBITDA before long term incentive plan
("LTIP") expense, professional fees and transaction expenses. We
believe Adjusted EBITDA is a useful supplemental measure for
investors, and is used by management, for evaluating our ability to
meet debt service requirements and fund organic and inorganic
growth, and as an indicator of relative operating performance.
- "Adjusted net income" is net income before LTIP expense,
professional fees and transaction expenses. We believe adjusted
profit is a useful supplemental measure for investors, and is used
by management, for evaluating our profitability, our ability to
meet debt service and capital expenditure requirements, our ability
to generate cash flow from operations, and as an indicator of
relative operating performance.
- "EBITDA" is earnings before interest, income taxes,
depreciation and amortization, where interest is defined as net
finance income (expense) as per the consolidated statement of
comprehensive income. We believe EBITDA is a useful supplemental
measure for investors, and is used by management, for evaluating
our ability to meet debt service requirements and fund organic and
inorganic growth, and as an indicator of relative operating
performance.
- "Organic growth" and "acquisition-based growth" consists of
quantifying the change in total sales as either related to organic
growth or acquisition-based growth, or the impact of foreign
exchange related to the translation of Canadian sales to U.S.
dollars. Total sales earned by acquired companies in the first 12
months following an acquisition is reported as acquisition-based
growth and thereafter as organic growth. Organic growth excludes
the impact of acquisitions and foreign exchange impact related to
the translation of Canadian sales to U.S. dollars. From time to
time, we also quantify the impacts of certain unusual events to
organic growth to provide useful information to investors to help
better understand our financial results.
In this news release, reference is also made to the following
non-GAAP ratios: "adjusted basic earnings per share", "adjusted
diluted earnings per share", "Adjusted EBITDA margin" and "Leverage
Ratio". For a description of the composition of each non-GAAP ratio
and how each non-GAAP ratio provides useful information to
investors and is used by management, see "Non-GAAP and Other
Financial Measures" in the Company's management's discussion and
analysis for the year ended December 31,
2022 (which is incorporated by reference herein).
Such non-GAAP financial measures and non-GAAP ratios are not
standardized financial measures under International Financial
Reporting Standards ("IFRS") and might not be comparable to similar
financial measures disclosed by other issuers. For reconciliation
between non-GAAP measures and the most directly comparable
financial measure in our financial statements, please refer to the
"Summary of Results".
Forward-Looking
Statements
Certain statements in this press release contain forward-looking
information within the meaning of applicable securities laws in
Canada ("forward-looking
information"). The words "anticipates", "believes", "budgets",
"could", "estimates", "expects", "forecasts", "intends", "may",
"might", "plans", "projects", "schedule", "should", "will", "would"
and similar expressions are often intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words.
The forward-looking information in this press release includes,
but is not limited to: our goal to grow sales to $3.5 billion by 2026 (run-rate); our intention is
to build a highly sustainable future for ADENTRA and our
stakeholders; our expectations regarding our ability to deliver
growth and profitability; our expectations regarding future
economic conditions and industry trends; our ability to generate
cash flow; we expect reduced financial performance in 2023 as
compared to the record setting levels achieved in 2022; our
intention to effectively manage our business and cash flows;
expected demand for our products; our plans to grow our business
through organic growth and acquisitions; and, expected future
dividends and considerations as to the payment of any future
dividends.
The forecasts and projections that make up the forward-looking
information are based on assumptions which include, but are not
limited to: there are no material exchange rate fluctuations
between the Canadian and U.S. dollar that affect our performance;
the general state of the economy does not worsen; we do not lose
any key personnel; there is no labor shortage across multiple
geographic locations; there are no circumstances, of which we are
aware that could lead to the Company incurring costs for
environmental remediation; there are no decreases in the supply of,
demand for, or market values of our products that harm our
business; we do not incur material losses related to credit
provided to our customers; our products are not subjected to
negative trade outcomes; we are able to sustain our level of sales
and earnings margins; we are able to grow our business long term
and to manage our growth; we are able to integrate acquired
businesses; there is no new competition in our markets that leads
to reduced revenues and profitability; we can comply with existing
regulations and will not become subject to more stringent
regulations; no material product liability claims; importation of
components or other innovative products does not increase and
replace products manufactured in North
America; our management information systems upon which we
are dependent are not impaired; we are not adversely impacted by
disruptive technologies; an outbreak or escalation of a contagious
disease does not adversely affect our business; and, our insurance
is sufficient to cover losses that may occur as a result of our
operations.
The forward-looking information is subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from historical results or results anticipated by
the forward-looking information. The factors which could cause
results to differ from current expectations include, but are not
limited to: exchange rate fluctuations between the Canadian and
U.S. dollar could affect our performance; our results are dependent
upon the general state of the economy; impacts of COVID-19, further
mutations thereof or other outbreaks of disease, could have
significant impacts on our business; we depend on key personnel,
the loss of which could harm our business; a labour shortage across
multiple geographic locations could harm our business; decreases in
the supply of, demand for, or market values of hardwood lumber or
sheet goods could harm our business; we may incur losses related to
credit provided to our customers; our products may be subject to
negative trade outcomes; we may not be able to sustain our level of
sales or earnings margins; we may be unable to grow our business
long term or to manage any growth; we are unable to integrate
acquired businesses; competition in our markets may lead to reduced
revenues and profitability; we may fail to comply with existing
regulations or become subject to more stringent regulations;
product liability claims could affect our revenues, profitability
and reputation; importation of components or other innovative
products may increase, and replace products manufactured in
North America; disruptive
technologies could lead to reduced revenues or a change in our
business model; we are dependent upon our management information
systems; disruptive technologies could lead to reduced revenues or
a change in our business model; our information systems are subject
to cyber securities risks; our insurance may be insufficient to
cover losses that may occur as a result of our operations; an
outbreak or escalation of a contagious disease may adversely affect
our business; our credit facility affects our liquidity, contains
restrictions on our ability to borrow funds, and impose
restrictions on distributions that can be made by us and certain of
our subsidiaries; the market price of our Shares will fluctuate;
there is a possibility of dilution of existing Shareholders; and,
other risks described in our annual information form and in our
management's discussion and analysis for the year ended
December 31, 2022, each of which are
available on the Company's profile at www.sedar.com.
This news release contains information that may constitute a
"financial outlook" within the meaning of applicable securities
laws. The financial outlook has been approved by management as of
the date of this news release. The financial outlook is provided
for the purpose of providing readers with an understanding of the
Company's anticipated financial performance. Readers are cautioned
that the information contained in the financial outlook may not be
appropriate for other purposes.
All forward-looking information in this news release is
qualified in its entirety by this cautionary statement and, except
as may be required by law, the Company undertakes no obligation to
revise or update any forward-looking information as a result of new
information, future events or otherwise after the date
hereof.
Third Party Information
Certain information contained in this news release includes
market and industry data that has been obtained from or is based
upon estimates derived from third party sources, including industry
publications, reports and websites. Although the data is believed
to be reliable, the Company has not independently verified the
accuracy, currency or completeness of any of the information from
third party sources referred to in this news release or ascertained
from the underlying economic assumptions relied upon by such
sources. The Company hereby disclaims any responsibility or
liability whatsoever in respect of any third-party sources of
market and industry data or information.
SOURCE ADENTRA Inc.