Doman Building Materials Group Ltd. Announces Second Quarter 2022 Financial Results

Doman Building Materials Group Ltd. (“Doman” or “the Company”) announced its second quarter 2022 financial results(1) for the period ended June 30, 2022.

Q2 2022 Financial Highlights⁽¹⁾:

• Revenues increased by 15.0% to $870.7 million
• Gross Margin at 11.8%
• Adjusted EBITDA⁽³⁾ amounted to $52.1 million
• Net Earnings⁽⁴⁾ amounted to $20.7 million
• Quarterly dividend of $0.14 per share paid⁽⁴⁾

For the three-month period ended June 30, 2022(1), consolidated revenues increased by 15.0% to $870.7 million, compared to $756.8 million in 2021, partially due to contributions from the Company’s 2021 acquisitions. The Company’s sales by product group in the quarter were made up of 77% construction materials, with the remaining balance of sales resulting from specialty and allied products of 20%, and other of 3%.

Gross margin dollars decreased to $102.7 million, compared to $131.2 million in 2021. Gross margin percentage was 11.8%, representing a decrease from the 17.3% achieved in the same quarter of 2021.

Revenues and gross margin were negatively impacted due to the recent underlying construction material pricing trends, with prices peaking as a result of inflationary pressures at the end of the first quarter of 2022, but then declining sharply again during the second quarter. The recent jump in interest rates and the expectation of a slowing North American housing market also cooled consumers’ demand, and resulted in further downward pressure on pricing during the second quarter.

EBITDA(2) and Adjusted EBITDA(3) for the second quarter amounted to $52.1 million, compared to EBITDA and Adjusted EBITDA of $90.4 million, and $94.0 million, respectively, during the same period in 2021. Adjusted EBITDA in the second quarter of 2021 included $3.6 million in non-recurring acquisition related costs. Net earnings for the three-month period ended June 30, 2022 were $20.7 million versus $53.1 million in the comparative period of 2021.

The Company declared a $0.14 per share(4) quarterly dividend during the second quarter, which was paid on July 15, 2022, to shareholders of record at the close of business on June 30, 2022.

For the six-month period ended June 30, 2022(1), the Company generated EBITDA and Adjusted EBITDA of $130.2 million, respectively, on revenues of $1.7 billion. Gross margin and gross margin percentage during the period amounted to $235.3 million, and 13.7%, respectively. This compares to 2021 EBITDA and Adjusted EBITDA of $150.4 million and $154.0 million respectively, on revenues of $1.3 billion. Gross margin and gross margin percentage during the 2021 period amounted to $221.6 million and 17.4%. Net earnings for the six-month period ended June 30, 2022 were $62.8 million versus $87.2 million in the comparative period of 2021.

“We continue to see market demand albeit at more normalized levels and we are seeing the expected benefits of our larger and growing footprint in the U.S. In the 12 months since we acquired Hixson Lumber, our balance sheet has strengthened substantially, with reductions in debt approaching $100 million,” commented Amar S. Doman, Chairman of the Board. “Despite our record top-line results, the severe downward pricing trend going into, and during the quarter impacted our margins, however we are confident that we will see margin stability and improvement as the pricing environment levels off.”

For the full second quarter results, click here.

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.

Contact:

Ali Mahdavi – Investor Relations – ali.mahdavi@domanbm.com – (416) 962-3300

Source: Doman Building Materials Group Ltd.