Doman Building Materials Group Ltd. (“Doman” or “the Company”)
(TSX:DBM; DBM.NT.A) announced today its third quarter 2021
financial results(1) for the period ended September 30, 2021.
For the three-month period ended September 30,
2021(1), consolidated revenues increased by 32.4% to $625.3 million
when compared to $472.2 million in the same period in 2020. The
increase in revenues was largely due to the results from
acquisitions which was partially offset by a decrease attributable
to the Company’s legacy operations, caused by industry-wide
declines in pricing for construction materials during the quarter.
The Company’s sales by product group in the quarter were made up of
66% construction materials, compared to 65% last year, with the
remaining balance resulting from specialty and allied products of
30%, and other of 4%.
Gross margin dollars totaled $80.7 million,
compared to $86.8 million during the corresponding period in 2020.
Gross margin percentage amounted to 12.9% of revenues versus 18.4%
during the same period in 2020. The decrease in margin dollars and
margin percentage is mainly attributable to the previously
mentioned decline in construction materials pricing, which was
partially offset by the results from the acquisitions.
Adjusted EBITDA(3) and EBITDA(2) for the period
amounted to $34.5 million and $33.2 million, respectively, compared
to $57.0 million during the third quarter of 2020. Net earnings for
the quarter ended September 30, 2021 were $7.7 million, compared to
net earnings of $31.0 million in the same quarter of 2020.
Subsequent to quarter-end, on October 15, 2021,
the Company paid a $0.12 per share dividend to its shareholders of
record on September 30, 2021(4).
The Company is pleased to announce that
reflecting its confidence in the performance of the business, the
Board of Directors is increasing the Company’s quarterly dividend
to $0.14 per share starting in the fourth quarter of 2021, which
dividend will be paid on January 14, 2022, to shareholders of
record on December 31, 2021. This marks the Company’s 47th
consecutive quarter of paying a dividend as a corporation.
For the nine-month period ended September 30,
2021(1), the Company generated Adjusted EBITDA and EBITDA of $188.6
million and $183.7 million, respectively, on revenues of $1.9
billion. Gross margin and gross margin percentage during the period
amounted to $302.3 million, and 15.9%, respectively. This compares
to 2020 EBITDA and Adjusted EBITDA of $106.4 million, on revenues
of $1.2 billion. Gross margin and gross margin percentage during
the 2020 period amounted to $189.2 million and 15.6%. Net earnings
for the nine-month period ended September 30, 2021 were $94.9
million versus $44.6 million in the comparative period of 2020.
“I am pleased with how our growth strategy
continues to unfold, resulting in record sales in the quarter. For
most of the third quarter, we continued to work through the
downward commodity pricing pressures which were seen industry-wide,
while remaining focused on margin protection as we worked through
our inventories," commented Amar S. Doman, Chairman of the Board.
"With pricing stabilizing late in the third quarter, we are
optimistic that the above average volatility we have experienced in
recent months may be behind us, which will enable us to leverage
our top line growth, economies of scale and stabilize margins at
our target levels in the coming quarters.”
Reconciliation of Net Earnings to Earnings
before Interest, Tax, Depreciation and Amortization (EBITDA):
|
Three months ended September
30, |
Nine months ended September
30, |
|
2021 |
|
2020 |
2021 |
2020 |
(in thousands of dollars) |
$ |
|
$ |
$ |
$ |
Net earnings |
7,655 |
|
31,019 |
94,900 |
44,576 |
(Recovery of) Provision for
income taxes |
(489 |
) |
11,653 |
30,324 |
16,774 |
Finance costs |
8,665 |
|
3,484 |
18,724 |
12,774 |
Depreciation and
amortization |
17,339 |
|
10,850 |
39,614 |
32,180 |
Share-based compensation |
34 |
|
23 |
148 |
58 |
|
|
|
|
|
EBITDA |
33,204 |
|
57,029 |
183,710 |
106,362 |
Acquisition costs |
1,303 |
|
- |
4,893 |
- |
Adjusted EBITDA |
34,507 |
|
57,029 |
188,603 |
106,362 |
About Doman Building Materials Group
Ltd. Doman is headquartered in Vancouver, British Columbia
and trades on the Toronto Stock Exchange under the symbol DBM and
is a leading North American distributor of building materials and
is Canada's only fully integrated national distributor in the
building materials and related products sector. Doman operates
several distinct divisions: CanWel Building Materials with multiple
treating plant, planing facilities and distribution centres
coast-to-coast in all major cities and strategic locations across
Canada; founded in 1959, Hixson Lumber Company in the central
United States, with 19 treating plants, two specialty planing mills
and five specialty sawmills located in eight states, headquartered
in Dallas, Texas, distributing, producing and treating lumber,
fencing and building materials; California Cascade in the western
United States near Portland, Oregon, San Francisco and Los Angeles,
California with treating facilities and distribution of building
materials, lumber and renovation products; founded in 1935, the
Honsador Building Products Group in 14 locations in the State of
Hawaii, with treating facilities, truss plants and distribution of
a wide range of building materials, lumber, renovation and
electrical products. In addition, through its CanWel Fibre
division, the Company operates a vertically integrated forest
products company based in Western Canada, operating from British
Columbia to Saskatchewan, also servicing the US Pacific Northwest.
CanWel Fibre owns approximately 117,000 acres of private
timberlands, strategic licenses and tenures, log harvesting and
trucking operations, several post and pole peeling facilities and
two pressure-treated specialty wood production plants and a
specialty sawmill. Please see our filings on SEDAR under Doman
Building Materials Group Ltd. (formerly, CanWel Building Materials
Group Ltd.) for additional information.
For further information regarding Doman please
contact:
Ali MahdaviInvestor Relations416-962-3300
ali.mahdavi@domanbm.com
Certain statements in this press release may
constitute “forward-looking” statements. When used in this press
release, forward-looking statements often but not always, can be
identified by the use of forward-looking words such as, including
but not limited to, “may”, “will”, “would”, “should”, “expect”,
“believe”, “plan”, “intend”, “anticipate”, “predict”, “remain”,
“estimate”, “potential”, “forecast”, “budget”, “schedule”,
“continue”, “could”, “might”, “project”, “targeting”, "future" and
other similar terminology or the negative or inverse of such words
or terminology. Forward-looking information in this news release
includes, without limitation, statements with respect to: the
ultimate impact (express or implied) of: a) fluctuations in
commodity and construction materials pricing; b) the performance of
recently acquired businesses; and c) the novel coronavirus COVID-19
(“COVID-19”) pandemic, on the Company’s operational and financial
results and on consumer behavior and economic activity, including
but not limited to the third quarter and full-year 2021 results,
which impact is difficult to estimate or quantify as it will depend
on, inter alia, the duration of the contagion, the impact of
government policies, and the pace of economic recovery. These
forward-looking statements reflect the current expectations of
Doman’s management regarding future events and operating
performance, but involve other known and unknown or unpredictable
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Doman, including but not
limited, to sales, earnings, cash flow from operations, EBITDA(2)
generated, dividends generated or paid by Doman, including whether
at the rate as of the date hereof or some other dividend rate in
the future which may be lower than either of the preceding rates
discussed therein, or industry results, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking
statements should therefore be construed in the light of such
factors. Actual events could differ materially from those projected
herein and depend on a number of factors. These factors include but
are not limited to those set out in the Company’s annual
information form dated March 12, 2021, and other public filings. By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future. In addition, a number
of material factors or assumptions were utilized or applied in
making the forward-looking statements, and may include, but are not
limited to, assumptions regarding the performance of the Canadian
and U.S. economies, the relative stability of or level of interest
rates, exchange rates, volatility of commodity prices, availability
or more limited availability of access to equity and debt capital
markets to fund, at acceptable costs, Doman’s future growth plans,
the implementation and success of the integration of Doman’s
acquisitions, the ability of Doman to refinance its debts as they
mature, the Canadian and United States housing and building
materials markets; the direct and indirect effect of the U.S.
housing market and economy; exchange rate fluctuations between the
Canadian and US dollar; retention of key personnel; Doman’s ability
to sustain its level of sales and earnings margins; Doman’s ability
to grow its business long term and to manage its growth; Doman’s
management information systems upon which it is dependent are not
impaired or compromised by breaches of Doman’s cybersecurity;
Doman’s insurance is sufficient to cover losses that may occur as a
result of its operations; international trade and tariff risks,
political risks, the amount of Doman’s cash flow from operations;
tax laws; and the extent of Doman’s future acquisitions and capital
spending requirements or planning as well as the general level of
economic activity, in Canada and the U.S., and abroad,
discretionary spending and unemployment levels; the effect of
general economic conditions, including market demand for Doman’s
products, and prices for such products; the effect of forestry,
land use, environmental and other governmental regulations; and the
risk of losses from fires, floods and other natural disasters and
unemployment levels. There is a risk that some or all of these
assumptions may prove to be incorrect. These and other factors
could cause or contribute to actual results differing materially
from those contemplated by forward-looking statements. Accordingly,
readers should not place undue reliance on any forward-looking
statements or information. These forward-looking statements speak
only as of the date of this press release. We caution that the
foregoing factors that may affect future results are not
exhaustive. When relying on our forward-looking statements to make
decisions with respect to Doman, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. Neither Doman nor any of its associates or
directors, officers, partners, affiliates, or advisers, provides
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statements
in these communications will actually occur. You are cautioned not
to place undue reliance on these forward-looking statements. Except
as required by applicable securities laws and legal or regulatory
obligations, Doman is not under any obligation, and expressly
disclaims any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
(1) Please refer to our Q3 2021 MD&A and
Financial Statements for further information. Our Q3 2021 Financial
Statements filings are reported under International Financial
Reporting Standards (“IFRS”).
(2) In the discussion, reference is made to
EBITDA, which represents earnings from continuing operations before
interest, including amortization of deferred financing costs,
provision for income taxes, depreciation and amortization. This is
not a generally accepted earnings measure under IFRS and does not
have a standardized meaning under IFRS, and therefore the measure
as calculated by Doman may not be comparable to similarly-titled
measures reported by other companies. EBITDA is presented as we
believe it is a useful indicator of a company’s ability to meet
debt service and capital expenditure requirements and because we
interpret trends in EBITDA as an indicator of relative operating
performance. EBITDA should not be considered by an investor as an
alternative to net earnings or cash flows as determined in
accordance with IFRS. For a reconciliation of EBITDA to the most
directly comparable measures calculated in accordance with IFRS
refer to “Reconciliation of Net Earnings to Earnings before
Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted
EBITDA”.
(3) In the discussion, reference is made to
Adjusted EBITDA, which is EBITDA as defined above, before certain
non-recurring or unusual items. This is not a generally accepted
earnings measure under IFRS and does not have a standardized
meaning under IFRS. The measure as calculated by Doman may not be
comparable to similarly-titled measures reported by other
companies. Adjusted EBITDA is presented as we believe it is a
useful indicator of Doman’s ability to meet debt service and
capital expenditure requirements from its regular business before
non-recurring items. Adjusted EBITDA should not be considered by an
investor as an alternative to net earnings or cash flows as
determined in accordance with IFRS. For a reconciliation from
Adjusted EBITDA to the most directly comparable measures calculated
in accordance with IFRS refer to “Reconciliation of Net Earnings to
Earnings before Interest, Tax, Depreciation and Amortization
(EBITDA) and Adjusted EBITDA”.
(4) The Company adjusted its quarterly common
share dividend from $0.14 to $0.12 per share, effective for the
dividend paid on October 15, 2020, to shareholders of record on
September 30, 2020. Please refer to the press release dated June
15, 2020 for further information. On September 15, 2021, Doman
declared a quarterly dividend of $0.12 per share, which was paid on
October 15, 2021 to shareholders of record on September 30, 2021.
Please refer to our Q3 2021 MD&A and our Q3 2021 Financial
Statements for more information.
Doman Building Materials (TSX:DBM)
Historical Stock Chart
From Jul 2024 to Aug 2024
Doman Building Materials (TSX:DBM)
Historical Stock Chart
From Aug 2023 to Aug 2024