ADENTRA Announces Third Quarter 2024 Results

Third quarter 2024 sales of US$568.8 million

Earnings per share of US$0.42 and Adjusted EBITDA of US$48.0 million

Quarterly dividend increased by 7% to C$0.15 per share

ADENTRA Inc. (“ADENTRA” or the “Company”) announced financial results for the three and nine months ended September 30, 2024. ADENTRA is one of North America’s largest distributors of architectural building products to the residential, repair and remodel, and commercial construction markets. We currently operate a network of 86 facilities in the United States and Canada. All amounts are shown in United States dollars (“US $” or “$”), unless otherwise noted.

Highlights for Q3 2024 (as compared to Q3 2023)

• Generated sales of $568.8 million (C$775.9 million), as compared to $558.7 million (C$749.4 million)
• Gross margin of $121.4 million, up from to $118.3 million
• Gross margin percentage increased to 21.3%, a 10 basis points improvement
• Operating expenses decreased by $4.2 million, or 4.1%
• Net income increased by 28.7% to $10.4 million; Basic earnings per share grew 16.7% to $0.42 (C$0.57)
• Operating cash flow before changes in working capital increased $12.6 million to $38.6 million, from $25.9 million
• Increased the quarterly dividend to C$0.15 per share from C$0.14 per share, payable on January 31, 2025 to shareholders of record as of January 20, 2025
• On July 29, 2024, announced the US$130 million acquisition of Woolf Distributing Company, Inc. (“Woolf”), a US Midwest-based value-added distributor of architectural building and millwork products for residential and commercial markets.

“We achieved a solid third-quarter performance, marked by disciplined execution and steadfast adherence to our strategic roadmap, effectively navigating headwinds in select markets,” stated Rob Brown, President and CEO of ADENTRA. “Notably, affordability constraints and the slower-than-anticipated pace of interest rate reductions in the U.S. contributed to tempered activity levels during the period.”

“Despite these challenges, our third-quarter performance held steady. Organic sales volumes decreased by just 1%, with total sales growing by 1.8% year-over-year, including two months of revenue contribution from our recent acquisition of Woolf.

“We also saw early signs of relief from the prolonged product price deflation that has impacted the past two years. Third-quarter price deflation of  3% represented the lowest rate of decline over the past five quarters, a substantial improvement from the year-to-date rate of 6%. Encouragingly, we achieved a modest increase in average product prices compared to Q2 2024, signaling a potential easing in product price pressures.”

“Our gross margin performance of 21.3%, up 10 basis points year-over-year, further underscores the stability of our operations. Organically, our operating expenses remained consistent with Q2 2024 levels, demonstrating our continued tight control over costs across the business.”

“A key highlight of the quarter was our strong cash flow generation, totaling $66 million. We strategically leveraged this cash flow, along with our credit facility, to complete the acquisition of Woolf, closing the quarter with a solid balance sheet and a pro forma leverage ratio of 2.5x. This places us comfortably within our target leverage range of 2-3x, providing us with the financial agility to advance our strategic priorities.”

“Reflecting on our business’s strength and our positive outlook for the coming year, I am pleased to announce that our Board of Directors has approved a 7% increase in our quarterly dividend to $0.15 per share—our 12th dividend increase in 12 years,” Mr. Brown concluded.

For full results click here.

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 operates a network of 82 facilities in the United States and Canada. ADENTRA’s common shares are listed on the Toronto Stock Exchange under the symbol ADEN.

Source: ADENTRA Inc.