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Aug 14, 2023

ADENTRA releases Q2 2023 financial results

ADENTRA Inc. (ADENTRA) has released its financial results for the second quarter of 2023, covering the period up to June 30. The company, a major distributor of architectural building products in North America, catering to residential, repair, remodel, and commercial construction markets, operates across 86 facilities in the United States and Canada. 


In this quarter's financial report, ADENTRA reported sales amounting to $585.9 million (C$786.8 million). Gross profit achieved stood at $119.4 million, signifying a gross margin of 20.4%. Operating expenses were 16.1% of sales, showing a slight organic increase of $1.5 million (1.7%) despite the economy's inflationary conditions. Net income reached $9.4 million, accompanied by an Adjusted EBITDA of $46.2 million (C$62.0 million). Basic earnings per share were noted at $0.42 and Adjusted basic earnings per share at $0.56 (C$0.75). Cash flow from operating activities totaled $52.8 million (C$70.8 million), leading to a reduction of $51.7 million in net bank debt. At the quarter's close, ADENTRA boasted a strong balance sheet and a Leverage Ratio of 3.0 times. Additionally, a dividend of C$0.13 per share was announced, slated for distribution on October 27, to shareholders recorded as of October 16.


"ADENTRA performed well in the second quarter as we leveraged our strategies and proven business model to achieve positive financial results, increase operating cash flow, and pay down debt even in a challenging macroeconomic environment," said Rob Brown, ADENTRA president and CEO. "While our Q2 results did not keep pace with the record results generated during the exceptional conditions of fiscal 2022, we achieved sequential quarterly improvement in sales volumes, gross margin and EBITDA margin percentage as compared to Q1 2023. Our performance in a period of reduced demand and product price deflation underscores the success of our strategies to grow and broaden our end-market participation, expand our channels to market, diversify and strengthen our product mix, and deepen our geographic coverage."


"We also continued to demonstrate our business'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 additional cash flow in periods of reduced economic activity," he said. "Looking forward, market headwinds are expected to persist in the near term but our business model and strategies are designed for success. We are confident in our ability to continue generating steady performance and strong operating cash flow through the balance of 2023."

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