Doman Building Materials Group (DBM) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues rose 3% year-over-year to CAD 663.1 million, driven by higher volumes and recent acquisitions, despite volatile market conditions and lower average pricing.

• Gross margin was 15.5% (CAD 103 million), with adjusted EBITDA at CAD 47.4 million, excluding CAD 1.2 million in non-recurring acquisition costs.

• Net earnings were CAD 14.6 million, down from CAD 21.2 million last year; a quarterly dividend of CAD 0.14 per share was paid.

• Acquisition of Tucker Lumber post-quarter end expands U.S. footprint and is expected to be immediately accretive to EBITDA, free cash flow, and EPS.

• Southeast Acquisition completed late in Q1 2024 contributed to revenue growth.

Financial highlights

• Sales increased 3% year-over-year to CAD 663.1 million, driven by higher volumes and Southeast Forest Products acquisition.

• Gross margin dollars slightly increased to CAD 103 million, but margin percentage declined to 15.5% from 16%.

• Adjusted EBITDA (excluding acquisition costs) was CAD 47.4 million, down 8.8% year-over-year.

• Net earnings fell to CAD 14.6 million from CAD 21.2 million; adjusted net earnings were CAD 15.4 million.

• Nine-month 2024 revenues were CAD 1.96 billion; adjusted EBITDA was CAD 143.6 million; net earnings were CAD 45.9 million.

Outlook and guidance

• Early Q4 shows strong volumes, especially in Texas and the Carolinas, aided by post-storm demand.

• Management remains optimistic about growth prospects and integration of Tucker acquisition, with positive indicators including firming prices and steadier activity in key markets.

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