Doman Building Materials Group Ltd. Announces Record Second Quarter 2021 Financial Results
Doman Building Materials Group Ltd. (“Doman” or “the Company”) announced its second quarter 2021 financial results(1) for the period ended June 30, 2021.
For the three-month period ended June 30, 2021(1), consolidated revenues increased by 83.3% to $756.8 million when compared to $412.9 million in the same period in 2020. The increase in revenues was partially comprised of the results from acquisitions, with the balance of the increase attributable to the Company’s legacy operations, demonstrating continued resilience and strong overall end-market demand. The increase in sales in the Company’s legacy operations is a result of improvements in pricing. Construction materials pricing generally continued to increase during the second quarter of 2021, before beginning to decline in May 2021 and continuing to decline through the second quarter. The Company’s sales by product group in the quarter were made up of 76% construction materials, compared to 67% last year, with the remaining balance resulting from specialty and allied products of 21%, and other of 3%.
Gross margin dollars more than doubled to $131.2 million, compared to $58.9 million during the corresponding period in 2020. Gross margin percentage also increased to 17.3% of revenues versus 14.3% during the same period in 2020. The increase in margin dollars and margin percentage is mainly attributable to the improvements in construction materials pricing throughout the majority of the second quarter of 2021, as well as ongoing implementation of the Company’s strategies.
EBITDA(2) and Adjusted EBITDA(3) for the period increased to a quarterly record at $90.5 million and $94.0 million, respectively, compared to $32.8 million during the second quarter of 2020. Net earnings for the quarter ended June 30, 2021 increased to $53.1 million, compared to net earnings of $12.7 million in the same quarter of 2020.
Subsequent to quarter-end, on July 15, 2021, the Company paid a $0.12 per share dividend to its shareholders of record on June 30, 2021(4).
Q2 2021 Business Highlights:
– May 10, 2021, the Company completed a private placement offering of $325 million aggregate principal amount of 5.25% senior unsecured notes due May 15, 2026.
– May 11, 2021, the Company completed a bought deal equity offering at a price of $10.00 per common share, for aggregate gross proceeds of $86.2 million.
– May 27, 2021, the Company announced its corporate name change to Doman Building Materials Group Ltd. with the ticker symbol “DBM” to commence trading effective May 31, 2021, on the Toronto Stock Exchange.
– June 4, 2021, the Company completed the acquisition of Hixson Lumber Sales, resulting in significant expansion in Doman’s operational footprint, distribution network and reach in the Central U.S., by adding 19 lumber treating plants, five specialty sawmills and a captive trucking fleet.
– June 4, 2021, the Company amended its existing senior credit facility with Wells Fargo Capital Finance, increasing the revolving credit limit from $360 million to $500 million.
– June 22, 2021, the Company completed the acquisition of Fontana Wholesale and Lumber and Wood Preserving, adding fire retardant treating along with an almost doubling of overall capacity in Doman’s operations in Southern California.
For the six-month period ended June 30, 2021(1), the Company generated EBITDA and Adjusted EBITDA of $150.5 million and $154.1 million, respectively, on revenues of $1.3 billion. Gross margin and gross margin percentage during the period amounted to $221.6 million, and 17.4%, respectively. This compares to 2020 EBITDA and Adjusted EBITDA of $49.3 million, on revenues of $739.7 million. Gross margin and gross margin percentage during the 2020 period amounted to $102.4 million and 13.8%. Net earnings for the six-month period ended June 30, 2021 were $87.2 million versus $13.6 million in the comparative period of 2020.
“The combination of strong sales growth across all our product categories with lumber pricing at peak levels, resulted in all of our key financial metrics coming in at new record levels, which combined with our focus and execution on strategic growth opportunities, resulted in yet another transformational period for the business,” commented Amar S. Doman, Chairman of the Board. “Shortly after the onset of COVID19, construction material pricing experienced sharp increases that were largely driven by changes in consumer behaviour. Although these increases manifested over several quarters, as a result of recent changes in demand, primarily resulting from the easing of pandemic related restrictions, there has been a rapid decrease in construction material pricing at the end the second quarter, carrying over into the third quarter, which is expected to impact our results.”
For the full second quarter results, click here.
About Doman Building Materials Group Ltd.
Doman is headquartered in Vancouver, British Columbia and trades on the Toronto Stock Exchange under the symbol DBM and is a leading North American distributor of building materials and is Canada’s only fully integrated national distributor in the building materials and related products sector. Doman operates several distinct divisions: CanWel Building Materials with multiple treating plant, planing facilities and distribution centres coast-to-coast in all major cities and strategic locations across Canada; founded in 1959, Hixson Lumber Company in the central United States, with 19 treating plants, two specialty planing mills and five specialty sawmills located in eight states, headquartered in Dallas, Texas, distributing, producing and treating lumber, fencing and building materials; California Cascade in the western United States near Portland, Oregon, San Francisco and Los Angeles, California with treating facilities and distribution of building materials, lumber and renovation products; founded in 1935, the Honsador Building Products Group in 14 locations in the State of Hawaii, with treating facilities, truss plants and distribution of a wide range of building materials, lumber, renovation and electrical products. In addition, through its CanWel Fibre division, the Company operates a vertically integrated forest products company based in Western Canada, operating from British Columbia to Saskatchewan, also servicing the US Pacific Northwest. CanWel Fibre owns approximately 117,000 acres of private timberlands, strategic licenses and tenures, log harvesting and trucking operations, several post and pole peeling facilities and two pressure-treated specialty wood production plants and a specialty sawmill. Please see our filings on SEDAR under Doman Building Materials Group Ltd. (formerly, CanWel Building Materials Group Ltd.) for additional information.
Ali Mahdavi – Investor Relations – firstname.lastname@example.org -(416) 962-3300
Source: Doman Building Materials Group Ltd.