HDI Provides Business Update for the Month of May 2020
Hardwoods Distribution Inc. (“HDI” or the “Company”) provided an update on business conditions and the Company’s financial position.
The Company’s average daily organic sales were up 16% in May as compared to April. “In May we saw increased activity across our distribution network as the pace of construction in many regions increased,” said Rob Brown, President and CEO. “I am also pleased to report that our policies and procedures related to ensuring a safe environment for employees are working, and the productive capacity of our business has not been impacted by the COVID-19 pandemic”.
In April the Company took a number of actions to reduce costs, including a reduction in the workforce, lowering of variable compensation, and curtailing non-essential operating expenditures. These measures assisted the Company in generating positive cash flow before changes in working capital in the months of April and May.
Consistent with the Company’s expectations, additional cash was also generated by reducing working capital in the months of April and May. The Company’s net debt position was reduced in in the last two months, in line with the Company’s focus on generating cash flow. “The accounts receivable collection cycle in May was excellent, and inventory balances that typically increase this time of year are being managed to reflect our current sales pace,” said Mr. Brown.
The ultimate impact of the COVID-19 pandemic on the Company’s second quarter and full-year 2020 results is difficult to quantify as it will depend on the duration of the contagion, the impact of government policies, and the pace of economic recovery. The Company remains confident that its business model, cash flow profile, and liquidity will be sufficient to address a varied range of COVID-19 scenarios that may occur in 2020. The Company will continue to firmly manage the business in the short term and make continued progress with respect to its long-term growth strategies.
As it relates to the the Company’s long-term growth strategy, and specifically its digital strategy, in May the Company launched DesignOneSource (“DOS”), the specification division of HDI. DOS provides architects and designers seamless specification support for decorative surfaces through an interactive online platform. “DesignOneSource distinguishes us from the competition,” commented Mr. Brown. “It supports our specification sales channel, provides real value to architects and designers, and increases the prospect of having our products specified in more construction projects going forward.”
DesignOneSource website: https://designonesource.com/
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 – CFO – email@example.com – (604) 881-1982
Source: Hardwoods Distribution Inc.