LANGLEY, BC, April 2, 2020 /CNW/ - Hardwoods Distribution Inc.
("HDI" or the "Company") (TSX: HDI) provided an update today on
business conditions and the Company's response to the COVID-19
pandemic.
In recent weeks the impacts of COVID-19 have grown both
domestically and abroad, and accordingly the Company has taken
actions to protect its employees, operations, and financial
position.
"The health and safety of our employees is our primary concern
and we have instituted a number of policies and procedures to
ensure a safe work environment," said Rob
Brown, President and CEO. Actions taken include detailed
cleaning and disinfecting procedures, social distancing protocols,
suspension of air travel, continuing education for employees
designed to minimize the chances of infection and spread of the
virus, increased work-from-home procedures, and contingency plans
in the event a COVID-19 diagnosis is found in one of our
facilities. "We took action early on to protect our over 1,350
employees and I am proud of the work we have done in this area,"
commented Mr. Brown.
From an operations perspective, the Company meets the U.S.
federal definition of an essential business and as a result the
Company, and most of its suppliers and customers, have generally
remained open during the COVID-19 pandemic. "We provide services
that are essential to the support and maintenance of critical
infrastructure, and take seriously our responsibility in these
times to continue to operate," said Mr. Brown. "A majority of our
suppliers and customers continue to operate as well, and demand in
March was strong," commented Mr. Brown.
As this pandemic continues it is possible that even essential
businesses may see a disruption in their operations. "We maintain a
North American wide footprint of 66 locations, have no significant
supplier or customer concentration, and our products are used in
diverse end markets including residential, repair and remodel, and
commercial end-use applications. The diversification in our
business helps to mitigate the potential impact of downward shifts
that certain regions, suppliers, or customers may face as a result
of the COVID-19 pandemic."
Mr. Brown continued, "As it relates to our financial position,
we have a strong balance sheet and business model that positions us
well during this time of uncertainty." The Company converts a
significant portion of EBITDA to operating cash flow, has no term
debt, and maintains revolver loans secured against high quality
working capital.
Given the pace at which the COVID-19 pandemic is affecting the
economy, HDI will continue to carefully manage liquidity and
utilize its revolver facility to increase cash on hand, limit
non-essential operating expenses, and defer capital
expenditures.
The COVID-19 pandemic has resulted in an unprecedented global
crises impacting economies around the world, and this may impact
the Company going forward. "We are closely monitoring the impact of
this pandemic on our business. We are confident that our people,
diversification, discipline, and financial position will put us in
a position to succeed over the long term," commented Mr. Brown.
About HDI
HDI is North America's largest
distributor of architectural grade building products to the
residential and commercial construction markets. The Company
operates a North American network of 66 distribution centres
utilizing three industry leading distribution brands:
Hardwoods Specialty Products; the Frank Paxton Lumber Company; and
Rugby Architectural Building Products. HDI also operates one
sawmill and kiln drying operation, Hardwoods of Michigan.
Forward-Looking Statements
Certain statements in this news release may constitute
"forward-looking information" within the meaning of applicable
securities laws in Canada. 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. Such information may involve, but is
not limited to, comments with respect to strategies, expectations,
planned operations or future actions. Forward-looking information
in this news release includes, without limitation, statements with
respect to: the anticipated impact of the COVID-19 pandemic on our
business; the diversification in our business helping to mitigate
the potential impact of downward shifts that certain regions,
suppliers, or customers may face as a result of the COVID-19
pandemic; we have a strong balance sheet and business model that
positions us well during this time of uncertainty; and, we are
confident that our people, diversification, discipline, and
financial position will put us in a position to succeed over the
long term.
The forecasts and projections that make up the forward-looking
information in this news release are based on assumptions which
include, but are not limited to: there are no material exchange
rate fluctuations between the Canadian and US dollar that affect
the Company's performance; the general state of the economy does
not worsen; the Company does not lose any key personnel; there are
no decreases in the supply of, demand for, or market values of
hardwood lumber or sheet goods that harm the Company's business;
the Company does not incur material losses related to credit
provided to its customers; the Company's products are not subjected
to negative trade outcomes; the Company is able to sustain its
level of sales and earnings margins; the Company is able to grow
its business long term and to manage its growth; the Company is
able to integrate acquired businesses; there is no new competition
in the markets in which the Company operates that lead to reduced
sales and profitability; the Company can comply with existing
regulations and will not become subject to more stringent
regulations; no material product liability claims; importation of
products manufactured with hardwood lumber or sheet goods does not
increase and replace products manufactured in North America; the Company's management
information systems upon which it is dependent are not impaired;
and, the Company's insurance is sufficient to cover losses that may
occur as a result of its operations.
The forward-looking information in this news release 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: escalation of the COVID-19 pandemic; the
COVID-19 pandemic decreasing the willingness of customers to
purchase products from the Company, causing labour shortages for
the Company, interrupting supplies from third parties upon which
the Company relies, or resulting in governmental regulation
adversely impacting the Company's business; exchange rate
fluctuations between the Canadian and US dollar could affect the
Company's performance; the Company's results are dependent upon the
general state of the economy; the Company depends on key personnel,
the loss of which could harm its business; decreases in the supply
of, demand for, or market values of hardwood lumber or sheet goods
could harm the Company's business; the Company may incur losses
related to credit provided to the Company's customers; the
Company's products may be subject to negative trade outcomes; the
Company may not be able to sustain its current level of sales or
earnings margins; the Company may be unable to grow its business
long term or to manage any growth; the Company may be unable to
integrate acquired businesses; competition in the Company's markets
may lead to reduced sales and profitability; the Company may fail
to comply with existing regulations or become subject to more
stringent regulations; product liability claims could affect the
Company's sales, profitability and reputation; importation of
products manufactured with hardwood lumber or sheet goods may
increase, and replace products manufactured in North America; the Company is dependent upon
its management information systems; the Company's insurance may be
insufficient to cover losses that may occur as a result of the
Company's operations; the Company's credit facilities affect its
liquidity, contain restrictions on the Company's ability to borrow
funds, and impose restrictions on distributions that can be made by
certain subsidiaries of the Company; the market price of the
Company's common shares will fluctuate; and there is a possibility
of dilution of the Company's existing shareholders. More
information about the risks and uncertainties affecting Hardwoods'
business can be found in the "Risk Factors" section of its Annual
Information Form dated March 19, 2020
,which is available under the Hardwoods' profile on SEDAR at
www.sedar.com.
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.
SOURCE Hardwoods Distribution Inc.