Adjusted EBITDA grows to US$44.5 million in the fourth
quarter
US$238.1 million of
cash flow from operations in 2023, including US$56.5 million in Q4
LANGLEY,
BC, March 18, 2024 /CNW/ - ADENTRA Inc.
("ADENTRA" or the "Company") today announced financial results for
the three and twelve months ended December 31, 2023. ADENTRA
is one of North America's largest
distributors of architectural building products to the residential,
repair and remodel, and commercial construction markets. We operate
a network of 86 facilities in the United
States and Canada. All
amounts are shown in United States
dollars ("US $" or "$"), unless otherwise noted.
Financial Highlights
- Generated full-year sales of $2.2
billion (C$3.0 billion),
compared to $2.6 billion
(C$3.4 billion) in 2022, a decrease
of 13.2% attributable equally to a decrease in volumes and product
prices; Q4 sales of $514.9
million (C$699.1 million),
compared to $574.7 (C$780.4 million) in Q4 2022
- Gross margin percentage of 20.8% in 2023; Q4 gross
margin percentage of 21.6%, representing our eleventh
consecutive quarter with a gross margin percentage above 20.0%
- Operating expenses, after adjusting for accrued trade
duties, decreased by $1.8 million to
$358.3 million in 2023 despite
significant inflationary pressures across the economy. Q4
operating expenses decreased by $5.5
million, or 6.0%, to $86.1
million
- Adjusted basic earnings per share were $2.43 (C$3.28) in
2023, compared to $5.71 (C$7.43) in 2022; Q4 adjusted basic earnings
per share were $0.46 (C$0.62), as compared to $0.66 (C$0.90) per
share in Q4 2022
- Full-year Adjusted EBITDA was $185.2 million (C$250.0
million), compared to $267.9
million (C$348.7 million) in
2022; Q4 Adjusted EBITDA increased to $44.5 million (C$60.4
million), up 2% from $43.6
million (C$59.2 million) in Q4
2022
- Generated strong cash flow from operating activities of
$238.1 million in 2023, including
$56.5 million in Q4 2023
- Effectively deployed capital in 2023, returning
$17.8 million in cash to shareholders
via dividends and share repurchases, and reducing debt by
$223.6 million
- Announced an 8% increase to the quarterly dividend to
C$0.14 per share, or C$0.56 annually, effective November 8, 2023
"We demonstrated the capabilities of our diversified business
model in 2023, delivering strong results despite industry-wide
volume declines and price deflation," said Rob Brown, ADENTRA's President and CEO. "While
our results did not match the exceptional performance of 2022, our
quarterly sales exhibited strong sequential resilience throughout
the year and we maintained a gross margin percentage above 20% in
every period."
"Our fourth quarter performance was notable. Sales volumes
stabilized year-over-year, contributing to Q4 sales of $514.9 million. Our gross margin reached 21.6%,
the highest of 2023, and marked our eleventh consecutive quarter
with a gross margin above 20%. This, together with a $5.5 million reduction in operating expenses,
helped us grow fourth quarter Adjusted EBITDA to $44.5 million, up 2% year-over-year, while
our Q4 Adjusted EBITDA margin increased to 8.6%, from 7.6%."
"Our results for the full year affirm ADENTRA's business
strategy, particularly our success in building a stable,
predictable business model that performs well throughout all
business cycles. We demonstrated our business model's ability to
convert a high percentage of Adjusted EBITDA into operating cash
flow before changes in working capital, and to release working
capital and generate cash flow in periods of reduced economic
activity. We generated full-year operating cash flow of
$238.1 million, enabling us to reduce
bank debt by $223.6 million, while
lowering our Leverage Ratio to 2.7x. Additionally, we continued to
provide returns for shareholders with the repurchase of 2% of our
issued and outstanding shares in 2023 and an 8% increase in our
quarterly dividend."
"Looking forward we see signs that the macroeconomic environment
is beginning to stabilize and, combined with our continued gross
margin strength and disciplined management of operating expenses,
will help to support our 2024 performance. Longer term, the
fundamentals underpinning the North American building products
market remain highly favorable, and combined with our own
strategies for capturing share in our large addressable market,
provide a multi-year runway for growth," said Mr. Brown.
Outlook
Moving into 2024, the inflation and interest rate hikes of
recent years are expected to continue to moderately impact economic
activity. While our sales volumes have stabilized in recent
quarters, we continue to experience softness in product pricing.
Forecasters are anticipating a stable environment for residential
construction in 2024 and a stable-to-lower year of demand for the
repair and remodel market. Each of these markets represents
approximately 40% of our business respectively.
We expect first quarter 2024 sales to be lower than in the same
period in 2023, with higher volumes being offset by weaker product
prices year-over-year. Sales comparisons to 2023 are expected to
improve in the latter half of the year. In this environment, we
anticipate modest growth in 2024 Adjusted EBITDA, driven by
continued gross margin strength and disciplined management of
operating expenses.
As we have demonstrated in previous business cycles and most
recently in 2023, we are adept at managing our business and cash
flows effectively in challenging market conditions. Our size and
scale, together with the diversity in our product categories,
customer channels and end-markets, provide important stability
while reducing our exposure to any one geography or segment of the
industry. Our strong balance sheet provides financial stability as
we move through periods of changing market conditions, and our
business model is expected to continue converting a high proportion
of EBITDA to operating cash flows before changes in working
capital. In addition, our investment in working capital typically
decreases during periods of reduced activity, resulting in an
additional source of cash.
Over the longer term our business is supported by strong
fundamentals in our end markets which include historic
under-building of homes, positive demographic factors, strong home
equity, and an aging housing stock. Forecasters are also
anticipating potential interest rate cuts in the latter half
of 2024, which could further support end-market demand for
our products. We continue to see a multi-year runway for growth in
the repair and remodel, residential, and commercial markets we
participate in.
Introducing Revised Targets
At our analyst day in December
2022 we unveiled our strategic priorities and plans to
continuing creating shareholder value. These priorities included
our Destination 2026 goal of $3.5
billion in run-rate sales by 2026.
In 2023, the impact of the challenging macroeconomic
environment, including industry-wide volume retraction and product
price deflation, was stronger than we anticipated in our
Destination 2026 plan. As noted in our outlook above, we also do
not expect the market to grow meaningfully in 2024. As a result of
these factors we have modified our plan with the revised goal of
achieving $3.5 billion in run-rate
sales by 2028, or the "Destination 2028" goal.
The other key metrics underpinning our $3.5 billion sales goal have not changed
significantly from what was presented in the original plan. For
further information, please refer to our investor presentation,
which is posted on our company website.
Q4 and Year-end 2023 Investor Call
ADENTRA will hold an investor call on Monday March 18, 2024 at 8:00 am Pacific (11:00
am Eastern). Participants should dial 1-888-664-6392 or
(416) 764-8659 (GTA) at least five minutes before the call begins.
A replay will be available through April 1,
2024 by calling toll free 1-888-390-0541 or (416) 764-8677
(GTA), followed by passcode 492580.
Summary of Results
|
Three
months
|
|
Three
months
|
|
For the
year
|
|
For the
year
|
|
ended December
31
|
|
ended
December 31
|
|
ended
December 31
|
|
ended December
31
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Total sales
|
$
514,859
|
|
$
574,734
|
|
$
2,239,324
|
|
$
2,579,568
|
Sales in the
US
|
475,978
|
|
533,179
|
|
2,069,660
|
|
2,380,659
|
Sales in Canada
(CAD$)
|
53,014
|
|
56,987
|
|
228,995
|
|
258,840
|
Gross profit
|
111,353
|
|
116,174
|
|
466,102
|
|
556,749
|
Gross profit
%
|
21.6 %
|
|
20.2 %
|
|
20.8 %
|
|
21.6 %
|
Operating
expenses
|
(86,090)
|
|
(91,567)
|
|
(373,797)
|
|
(360,117)
|
Income from
operations
|
$
25,263
|
|
$
24,607
|
|
$
92,305
|
|
$
196,632
|
Add: Depreciation and
amortization
|
17,736
|
|
16,931
|
|
69,857
|
|
65,455
|
Earnings before
interest, taxes, depreciation and
|
|
|
|
|
|
|
|
amortization
("EBITDA")
|
$
42,999
|
|
$
41,538
|
|
$
162,162
|
|
$
262,087
|
EBITDA as a % of
revenue
|
8.4 %
|
|
7.2 %
|
|
7.2 %
|
|
10.2 %
|
Add
(deduct):
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
(17,736)
|
|
(16,931)
|
|
(69,857)
|
|
(65,455)
|
Net finance
expense
|
(12,420)
|
|
(13,765)
|
|
(49,406)
|
|
(33,862)
|
Income tax
expense
|
(3,846)
|
|
2,548
|
|
(6,851)
|
|
(34,102)
|
Net income for the
period
|
$
8,997
|
|
$
13,390
|
|
$
36,048
|
|
$
128,668
|
Basic earnings per
share
|
$
0.40
|
|
$
0.59
|
|
$
1.61
|
|
$
5.50
|
Diluted earnings per
share
|
$
0.40
|
|
$
0.58
|
|
$
1.59
|
|
$
5.47
|
Average US dollar
exchange rate for one Canadian dollar
|
$
0.734
|
|
$
0.736
|
|
$
0.741
|
|
$
0.768
|
Analysis of Specific
Items Affecting Comparability (in thousands of Canadian
dollars)
|
|
Three
months
|
|
Three
months
|
|
For the
year
|
|
For the
year
|
|
ended December
31
|
|
ended
December 31
|
|
ended
December 31
|
|
ended December
31
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Earnings before
interest, taxes, depreciation and
|
|
|
|
|
|
|
|
amortization
("EBITDA"), per table above
|
$
42,999
|
|
$
41,538
|
|
$
162,162
|
|
$
262,087
|
LTIP expense
|
1,454
|
|
972
|
|
7,440
|
|
3,899
|
Accrued trade
duties
|
—
|
|
—
|
|
15,640
|
|
—
|
Transaction expense and
professional fees
|
—
|
|
1,061
|
|
—
|
|
1,953
|
Adjusted
EBITDA
|
$
44,453
|
|
$
43,571
|
|
$
185,242
|
|
$
267,939
|
Adjusted EBITDA as a
% of revenue
|
8.6 %
|
|
7.6 %
|
|
8.3 %
|
|
10.4 %
|
|
|
|
|
|
|
|
|
Net income for the
period, as reported
|
$
8,997
|
|
$
13,390
|
|
$
36,048
|
|
$
128,668
|
Adjustments, net of
tax
|
1,344
|
|
1,653
|
|
18,307
|
|
4,909
|
Adjusted net income for
the period
|
$
10,341
|
|
$
15,043
|
|
$
54,355
|
|
$
133,577
|
|
|
|
|
|
|
|
|
Basic earnings per
share, as reported
|
$
0.40
|
|
$
0.59
|
|
$
1.61
|
|
$
5.50
|
Net impact of above
items per share
|
0.06
|
|
0.07
|
|
0.82
|
|
0.21
|
Adjusted basic earnings
per share
|
$
0.46
|
|
$
0.66
|
|
$
2.43
|
|
$
5.71
|
|
|
|
|
|
|
|
|
Diluted earnings per
share, as reported
|
$
0.40
|
|
$
0.58
|
|
$
1.59
|
|
$
5.47
|
Net impact of above
items per share
|
0.06
|
|
0.07
|
|
0.81
|
|
0.21
|
Adjusted diluted
earnings per share
|
$
0.46
|
|
$
0.65
|
|
$
2.40
|
|
$
5.68
|
Results from Operations - Year Ended December 31, 2023
For the year ended December 31, 2023, we generated total
sales of $2.24 billion, as compared
to the record-setting $2.58 billion
we achieved in 2022 during a period of unusually high demand and
product price inflation. The $340.2
million, or 13.2%, decrease primarily reflects a
$362.6 million reduction in organic
sales, partially offset by $28.6
million of incremental revenue from our acquisitions of
Mid-Am and Rojo. The decrease in organic sales resulted from
roughly equal parts lower volumes and product price deflation. The
remaining $6.3 million of sales
impact reflects an unfavorable foreign exchange impact related to
the translation of Canadian sales to US dollars for reporting
purposes.
Full-year sales from our US operations totaled $2.07 billion, as compared to $2.38 billion in 2022. The $311.0 million, or 13.1%, decrease reflects a
$339.6 million year-over-year
reduction in organic sales following the record-setting pace of
2022. The change in organic sales resulted from roughly equal parts
lower volumes and product price deflation, partially offset by
$26.4 million in additional revenue
from a full year of Mid-Am's results, compared to just under 11
months of contribution in the same period last year. Full-year US
sales also include $2.3 million of
contribution from the Rojo business acquired in the first
quarter.
In Canada, full-year sales
totaled C$229.0 million, as compared
to C$258.8 million in 2022. This
C$29.8 million, or 11.5%, decrease
primarily reflects equal parts lower volumes and product price
deflation.
Gross profit for the year ended December
31, 2023 was $466.1 million,
as compared to $556.7 million in
2022. The $90.6 million, or 16.3%,
year-over-year decrease reflects lower organic sales and a gross
profit percentage of 20.8%, as compared to 21.6% in 2022. Our 2022
gross profit percentage was elevated during the first half of the
year by favorable market dynamics, including strong demand and
tight supply.
For the year ended December 31, 2023, operating expenses
increased by $13.7 million to
$373.8 million (16.7% of sales), from
$360.1 million (14.0% of sales) in
the same period last year. The $13.7
million increase reflects accrued trade duties of
$15.6 million, partially offset by
savings related to increased operating efficiency.
Excluding the accrued trade duties, operating expenses decreased
by $1.8 million year-over-year to
$358.3 million, and operating expense
as a percentage of sales was 16.0%, as compared to 14.0% in 2022.
The reduction in operating expenses was primarily driven by a
$6.5 million decrease in organic
expenses, partially offset by $3.7
million in additional operating expenses from the inclusion
of a full year's results from the Mid-Am operations and
$1.0 million of amortization on
intangible assets acquired in connection with the Mid-Am
acquisition.
For the year ended December 31, 2023, depreciation and
amortization increased to $69.9
million, from $65.5 million in
2022, reflecting a $4.4 million
increase. This includes $1.5 million
of incremental depreciation and amortization related to the Mid-Am
acquisition, with the remaining $2.9
million attributed to higher depreciation on premise leases
in our operations. Of the total $69.9
million, $22.1 million
represents amortization on acquired intangible assets, compared to
$21.3 million in the prior year.
For the year ended December 31, 2023, net finance expense
increased to $49.4 million, from
$33.9 million in 2022. Of this total,
$37.0 million represented interest on
bank borrowing, up from $26.8 million
in the prior year, reflecting higher interest rates on bank
indebtedness in the current period. We entered into an interest
rate swap to mitigate some of our exposure to interest rate
variability.
For the year ended December 31, 2023, income tax expense
decreased to $6.9 million, from
$34.1 million in 2022, primarily
reflecting lower taxable income. The effective tax rate for 2023
was 16.0%, as compared to 21.0% last year. This improvement
primarily reflects the benefit of other restructuring.
In 2023, we generated 2023 Adjusted EBITDA of $185.2 million, compared to $267.9 million in 2022. This $82.7 million, or 30.9%, change primarily
reflects the $90.6 million decrease
in gross profit, partially offset by the $7.9 million decrease in operating expenses
(before changes in depreciation and amortization, LTIP expense,
transaction expense and professional fees, and accrued trade
duties).
We achieved net income of $36.0
million in 2023, as compared to $128.7 million in 2022. The $92.6 million, or 72.0%, decline was primarily
driven by the $99.9 million decrease
in EBITDA, $15.5 million
increase in net finance expense, and $4.4
million increase in depreciation and amortization, partially
offset by the $27.3 million decrease
in income tax expense.
For the year ended December 31, 2023, we generated basic
earnings per share of $1.61, as
compared to $5.50 in 2022. Our
adjusted net income was $54.4
million, compared to $133.6
million in 2022, resulting in adjusted basic earnings per
share of $2.43, as compared to
$5.71 in the previous year.
Results from Operations - Three Months Ended
December 31, 2023
For the three months ended December 31, 2023, we generated
total sales of $514.9 million, as
compared to $574.7 million in Q4
2022. The decrease of $59.9 million,
or 10.4%, primarily reflects product price deflation with volumes
remaining relatively stable year-over-year. Sales results were not
significantly impacted by foreign exchange translation of Canadian
sales to US dollars for reporting purposes.
Our US operations generated fourth quarter sales of $476.0 million, as compared to $533.2 million in the same period in 2022. The
$57.2 million, or 10.7%, decrease
primarily reflects product price deflation.
In Canada, fourth quarter sales
of C$53.0 million were C$4.0 million, or 7.0%, lower than the same
period in 2022. The year-over-year decrease primarily reflects
product price deflation, partially offset by higher volumes.
We generated fourth quarter gross profit of $111.4 million, compared to $116.2 million in the same period last year. The
$4.8 million, or 4.1%, decrease is
mainly attributed to lower sales, partially offset by a higher
gross margin percentage. Our fourth quarter gross margin percentage
increased to 21.6%, from 20.2% in Q4 2022. This improvement was
supported by reduced inventory write-downs of $2.4 million in the current quarter, compared to
$7.5 million in Q4 2022.
Fourth quarter operating expense decreased by $5.5 million, or 6.0%, year-over-year to
$86.1 million, while operating
expenses as a percentage of sales were 16.7% as compared to 15.9%
in the same period last year. The reduction in operating expenses
primarily reflects lower staffing costs, including a reduction in
variable compensation, and a decrease in premises costs.
For the three months ended December 31, 2023, depreciation
and amortization increased to $17.7
million, from $16.9 million in
Q4 2022. Included in the $17.7
million was $5.5 million of
amortization on acquired intangible assets, consistent with the
same period last year.
For the three months ended December 31, 2023, net finance
expense decreased to $12.4 million,
from $13.8 million in Q4 2022. This
included $8.8 million of interest on
bank borrowing, as compared to $9.7
million in Q4 2022. The decrease in interest expense
primarily reflects lower bank indebtedness, partially offset by
higher interest rates.
For the three months ended December 31, 2023, we recognized
an income tax expense of $3.8
million, compared to an income tax recovery of $2.5 million in the same period last year.
Fourth quarter Adjusted EBITDA increased to $44.5 million, from $43.6
million in the same period in 2022. This $0.9 million, or 2.0%, year-over-year improvement
largely reflects the $5.7 million
decrease in operating expenses (before changes in depreciation and
amortization, LTIP expense, and transaction expense and
professional fees), partially offset by the $4.8 million decrease in gross profit.
Net income for the fourth quarter of 2023 was $9.0 million (basic earnings per share of
$0.40), as compared to $13.4 million (basic earnings per share of
$0.59) in Q4 2022. The $4.4 million, or 32.8%, decrease was driven by
the $6.4 million increase in income
tax expense and the $0.8
million increase in depreciation and amortization, partially
offset by the $1.5 million increase
in EBITDA and $1.3 million decrease
in net finance expense.
We generated fourth quarter adjusted net income of $10.3 million, as compared to $15.0 million in Q4 2022. Adjusted basic earnings
per share were $0.46, as compared to
$0.66 in Q4 2022.
About ADENTRA
ADENTRA is one of North
America's largest distributors of architectural building
products to the residential, repair and remodel, and commercial
construction markets. The Company operates a network of 86
facilities in the United States
and Canada. ADENTRA's common
shares are listed on the Toronto Stock Exchange under the symbol
ADEN.
Non-GAAP and other Financial Measures
In this news release, reference is made to the following
non-GAAP financial measures:
- "Adjusted EBITDA" is EBITDA before long term incentive plan
("LTIP") expense, professional fees, transaction expenses, and
accrued trade duties. We believe Adjusted EBITDA is a useful
supplemental measure for investors, and is used by management, for
evaluating our ability to meet debt service requirements and fund
organic and inorganic growth, and as an indicator of relative
operating performance.
- "Adjusted net income" is net income before long term incentive
plan ("LTIP") expense, professional fees, transaction expenses, and
accrued trade duties. We believe adjusted profit is a useful
supplemental measure for investors, and is used by management, for
evaluating our profitability, our ability to meet debt service and
capital expenditure requirements, our ability to generate cash flow
from operations, and as an indicator of relative operating
performance.
- "EBITDA" is earnings before interest, income taxes,
depreciation and amortization, where interest is defined as net
finance income (expense) as per the consolidated statement of
comprehensive income. We believe EBITDA is a useful supplemental
measure for investors, and is used by management, for evaluating
our ability to meet debt service requirements and fund organic and
inorganic growth, and as an indicator of relative operating
performance.
- "Organic growth" and "acquisition-based growth" consists of
quantifying the change in total sales as either related to organic
growth or acquisition-based growth, or the impact of foreign
exchange related to the translation of Canadian sales to US
dollars. Total sales earned by acquired companies in the first 12
months following an acquisition is reported as acquisition-based
growth and thereafter as organic growth. Organic growth excludes
the impact of acquisitions and foreign exchange impact related to
the translation of Canadian sales to US dollars. From time to time,
we also quantify the impacts of certain unusual events to organic
growth to provide useful information to investors to help better
understand our financial results.
In this news release, reference is also made to the following
non-GAAP ratios: "adjusted basic earnings per share", "adjusted
diluted earnings per share", "Adjusted EBITDA margin" and "Leverage
Ratio". For a description of the composition of each non-GAAP ratio
and how each non-GAAP ratio provides useful information to
investors and is used by management, see "Non-GAAP and Other
Financial Measures" in the Company's management's discussion and
analysis for the year ended December 31,
2023 (which is incorporated by reference herein).
Such non-GAAP financial measures and non-GAAP ratios are not
standardized financial measures under International Financial
Reporting Standards ("IFRS") and might not be comparable to similar
financial measures disclosed by other issuers. For reconciliation
between non-GAAP measures and the most directly comparable
financial measure in our financial statements, please refer to the
"Summary of Results".
Forward-Looking Statements
Certain statements in this press release contain forward-looking
information within the meaning of applicable securities laws in
Canada ("forward-looking
information"). The words "anticipates", "believes", "budgets",
"could", "estimates", "expects", "forecasts", "intends", "may",
"might", "plans", "projects", "schedule", "should", "will", "would"
and similar expressions are often intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words.
The forward-looking information in this press release is
included, but not limited to: We ended the year with significant
unused borrowing capacity, which will enable us to continue to
manage short-term economic headwinds, fund anticipated future
growth and continue executing on our strategies; our capital
allocation priorities going forward will include a continued focus
on repayment of debt and growth through acquisitions; the inflation
and interest rate hikes of recent years are expected to continue to
moderately impact economic activity; while our sales volumes have
stabilized in recent quarters, we continue to experience softness
in product pricing; forecasters are anticipating a stable
environment for residential construction in 2024 and a
flat-to-lower year for the repair and remodel market; we expect
first quarter 2024 sales to be lower than the same period in 2023,
with higher volumes being offset by weaker product prices
year-over-year; sales comparisons to 2023 are expected to improve
in the latter half of the year; in this environment, we anticipate
modest growth in 2024 Adjusted EBITDA, driven by continued gross
margin strength and disciplined management of operating expenses;
as we have demonstrated in previous business cycles and most
recently in 2023, we are adept at managing our business and cash
flows effectively in challenging market conditions; our size and
scale, together with the diversity in our product categories,
customer channels and end-markets, provide important stability
while reducing our exposure to any one geography or segment of the
industry; our strong balance sheet provides financial stability as
we move through periods of changing market conditions, and our
business model is expected to continue converting a high proportion
of EBITDA to operating cash flows before changes in working
capital; in addition, our investment in working capital typically
decreases during periods of reduced activity, resulting in an
additional source of cash; over the longer term our business is
supported by strong fundamentals in our end markets which include
historic under-building of homes, positive demographic factors,
strong home equity, and an aging housing stock; forecasters are
also anticipating potential interest rate cuts in the later half
of 2024, which could further support end-market demand for
our products; we continue to see a multi-year runway for growth in
the repair and remodel, residential, and commercial markets we
participate in; we also do not expect the market to grow
meaningfully in 2024; our business requires an ongoing investment
in working capital; our investment in working capital may fluctuate
from quarter-to-quarter based on factors such as sales demand,
strategic purchasing decisions taken by management, and the timing
of collections from customers; historically, the first and fourth
quarters can be seasonally slower periods for construction
activity, resulting in reduced demand for architectural building
products; our debt management strategy is to repay a portion of our
credit facilities related to acquisitions, and maintain a base
level of debt as part of our capital structure; our intent is to
roll and renew our credit facilities when they expire; we do not
intend to restrict future dividends in order to fully extinguish
our debt obligations upon their maturity; the amount of debt that
will actually be drawn on our available revolving credit facilities
will depend upon the seasonal and cyclical needs of the business
and our cash generating capacity going forward; when making future
dividend and share repurchase decisions, we will consider the
amount of financial leverage, and therefore debt, we believe is
appropriate given existing and expected market conditions and
available business opportunities; we do not target a specific
financial leverage amount; we believe our current credit facilities
are sufficient to finance our working capital needs and market
expansion strategy; and we intend to issue common shares from
treasury to settle the portion of the obligation not paid to
employees in cash.
The forecasts and projections that make up the forward-looking
information are based on assumptions which include, but are not
limited to: there are no material exchange rate fluctuations
between the Canadian and US dollar that affect our performance; the
general state of the economy does not worsen; we do not lose any
key personnel; there is no labor shortage across multiple
geographic locations; there are no circumstances, of which we are
aware that could lead to the Company incurring costs for
environmental remediation; there are no decreases in the supply of,
demand for, or market values of our products that harm our
business; we do not incur material losses related to credit
provided to our customers; our products are not subjected to
negative trade outcomes; we are able to sustain our level of sales
and earnings margins; we are able to grow our business long term
and to manage our growth; we are able to integrate acquired
businesses; there is no new competition in our markets that leads
to reduced revenues and profitability; we can comply with existing
regulations and will not become subject to more stringent
regulations; no material product liability claims; importation of
components or other innovative products does not increase and
replace products manufactured in North
America; our management information systems upon which we
are dependent are not impaired; we are not adversely impacted by
disruptive technologies; an outbreak or escalation of a contagious
disease does not adversely affect our business; and, our insurance
is sufficient to cover losses that may occur as a result of our
operations.
The forward-looking information is subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from historical results or results anticipated by
the forward-looking information. The factors which could cause
results to differ from current expectations include, but are not
limited to: exchange rate fluctuations between the Canadian and US
dollar could affect our performance; our results are dependent upon
the general state of the economy; the impacts of COVID-19, further
mutations thereof or other outbreaks of disease, could have
significant impacts on our business; we depend on key personnel,
the loss of which could harm our business; a labour shortage across
multiple geographic locations could harm our business; decreases in
the supply of, demand for, or market values of hardwood lumber or
sheet goods could harm our business; we may incur losses related to
credit provided to our customers; our products may be subject to
negative trade outcomes; we may not be able to sustain our level of
sales or earnings margins; we may be unable to grow our business
long term or to manage any growth; we are unable to integrate
acquired businesses; competition in our markets may lead to reduced
revenues and profitability; we may fail to comply with existing
regulations or become subject to more stringent regulations;
product liability claims could affect our revenues, profitability
and reputation; importation of components or other innovative
products may increase, and replace products manufactured in
North America; disruptive
technologies could lead to reduced revenues or a change in our
business model; we are dependent upon our management information
systems; disruptive technologies could lead to reduced revenues or
a change in our business model; our information systems are subject
to cyber securities risks; our insurance may be insufficient to
cover losses that may occur as a result of our operations; an
outbreak or escalation of a contagious disease may adversely affect
our business; our credit facility affects our liquidity, contains
restrictions on our ability to borrow funds, and impose
restrictions on distributions that can be made by us and certain of
our subsidiaries; the market price of our Shares will fluctuate;
there is a possibility of dilution of existing Shareholders; and,
other risks described in our Annual Information Form and in our
management's discussion and analysis for the year December 31, 2023, each of which are available on
the Company's profile at www.sedarplus.ca
This news release contains information that may constitute a
"financial outlook" within the meaning of applicable securities
laws. The financial outlook has been approved by our management as
of the date of this news release. The financial outlook is provided
for the purpose of providing readers with an understanding of our
anticipated financial performance. Readers are cautioned that the
information contained in the financial outlook may not be
appropriate for other purposes.
All forward-looking information in this news release is
qualified in its entirety by this cautionary statement and, except
as may be required by law, we undertake no obligation to revise or
update any forward-looking information as a result of new
information, future events or otherwise after the date hereof.
Third-Party Information
Certain information contained in this news release includes
market and industry data that has been obtained from or is based
upon estimates derived from third-party sources, including industry
publications, reports and websites. Although the data is believed
to be reliable, we have not independently verified the accuracy,
currency or completeness of any of the information from third-party
sources referred to in this news release or ascertained from the
underlying economic assumptions relied upon by such sources. We
hereby disclaim any responsibility or liability whatsoever in
respect of any third-party sources of market and industry data or
information.
SOURCE ADENTRA Inc.