HDI Provides Business Update Regarding COVID-19
Hardwoods Distribution Inc. (“HDI” or the “Company”) provided an update 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 nonessential 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.
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.
Faiz Karmally – Chief Financial Officer – firstname.lastname@example.org – (604) 881–1982
Source: Hardwoods Distribution Inc.