Doman Building Materials Group (DBM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were CAD 689.8 million, down 2.9% year-over-year due to a slowing construction market and higher interest rates, partially offset by the Southeast Forest Products acquisition.

• Gross margin was 15.7%, down from 17.0% in Q2 2023, reflecting lower average pricing but supported by disciplined cost management.

• Adjusted EBITDA for Q2 2024 was CAD 50.6 million, including CAD 371,000 in non-recurring acquisition costs.

• Net earnings for the quarter were CAD 17.0 million, down 41.8% from CAD 29.2 million in Q2 2023.

• A quarterly dividend of CAD 0.14 per share was declared and paid in July 2024.

Financial highlights

• Revenue for Q2 2024 was CAD 689.8 million, down from CAD 710.7 million in Q2 2023.

• Gross margin dollars were CAD 108.1 million, compared to CAD 121.2 million last year.

• Adjusted EBITDA was CAD 50.6 million in Q2 2024 versus CAD 66.0 million in Q2 2023.

• Net earnings were CAD 17.0 million in Q2 2024 versus CAD 29.2 million in Q2 2023.

• Six-month 2024 revenues were CAD 1.29 billion, with EBITDA of CAD 95.0 million and Adjusted EBITDA of CAD 96.2 million.

Outlook and guidance

• Management remains cautiously optimistic, expecting flat to slightly lower volumes for the remainder of 2024, with some pricing appreciation in lumber.

• Management expects continued volatility in market activity and pricing.

• No formal earnings guidance will be provided in future quarters.

• Treated lumber prices in the South are expected to improve modestly in the second half, but the market remains oversupplied.

• Forward-looking statements highlight risks from economic conditions, commodity pricing, and housing starts.