ADENTRA Announces Annual and Fourth Quarter 2025 Results

Fourth quarter 2025 sales of U.S.$517.5 million
Earnings per share of U.S.$1.32 and Adjusted EBITDA of U.S.$43.7 Million

LANGLEY, BC, March 11, 2026 /CNW/ – ADENTRA Inc. (“ADENTRA” or the “Company”) today announced financial results for the three and twelve months ended December 31, 2025. ADENTRA is one of North America’s largest distributors of architectural building products to the residential, repair and remodel, and commercial construction markets. We currently operate a network of 81 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 $2.25 billion (C$3.14 billion), an increase of 3.0% compared to $2.18 billion (C$2.99 billion) in the prior year. Q4 sales decreased to $517.5 million (C$721.8 million), from $530.8 million (C$742.2 million)in Q4 2024, down 2.5%.

• Gross margin percentage remained strong and steady at 21.7% in 2025; Q4 2025 gross margin percentage increased to 22.1%, from 21.7% in Q4 2024.

• Operating expenses increased by $7.6 million to $384.8 million, from $377.2 million in 2024. Q4 2025 operating expenses increased by $0.3 million, or 0.3%.

• Basic earnings per share increased to $2.78 (C$3.89) in 2025, from $1.95 (C$2.73) in 2024.  Q4 basic earnings per share increased to $1.32 (C$1.84), from $0.34 (C$0.48) per share in Q4 2024.

• Adjusted basic earnings per share of $2.68 (C$3.75) in 2025, compared to $3.01 (C$4.21) in 2024; Q4 2025 adjusted basic earnings per share of $0.67 (C$0.93), compared to $0.51 (C$0.71) per share in Q4 2024.

• Achieved full-year Adjusted EBITDA of $187.9 million (C$262.7 million), up from $184.3 million (C$252.4 million) in 2024; Q4 2025 Adjusted EBITDA of $43.7 million (C$61.0 million) increased 3.7% from $42.2 million (C$59.0 million) in Q4 2024.

• Generated strong cash flow from operating activities of $160.6 million in 2025, including $99.6 million in Q4 2025.

• Effectively deployed capital in 2025, reducing our leverage ratio, and returning $29.5 million in cash to shareholders via dividends and share repurchases.

• Increased quarterly dividend by 7% to C$0.16 per share, or C$0.64 annually, effective November 7, 2025.

“We demonstrated disciplined, execution-led performance in 2025 as we achieved sales and Adjusted EBITDA growth, robust gross margins, and strong operating cash flow despite muted housing activity and limited market tailwinds,” said Rob Brown, President and CEO of ADENTRA.

Consolidated sales grew 3% year-over-year to $2.25 billion, supported by $94.3 million of acquisition-based growth from Woolf Distributing, which we successfully integrated in 2025. Improvements in product pricing also helped partially offset a volume-related decline in organic sales.

“I am particularly proud of our success in maintaining a robust gross margin of 21.7% in 2025, rising to 22.1% in the fourth quarter. Maintaining strong margins in a challenging market demonstrates the resilience of our business model, which combines the effectiveness of regional distribution brands with the competitive advantages of a coast-to-coast platform business model,” added Mr. Brown.

“The platform includes supply chain excellence as a core strategic focus, and our domestic sourcing strategy combined with our global sourcing network provides differentiated products and an attractive offering for our customers – deepening our competitive moat.

Our disciplined operating performance resulted in full-year Adjusted EBITDA of $187.9 million, up 2% year-over-year, with an Adjusted EBITDA margin of 8.4%. We efficiently converted this into $160.6 million of operating cash flow, including $99.6 million generated in Q4. Strong cash generation enabled us to repurchase 3.5% of our outstanding shares and return $29.5 million to shareholders through dividends and share repurchases, including a 7% dividend increase announced in November. At the same time, we reduced our leverage ratio to 2.2x, strengthening our balance sheet and positioning ADENTRA for future acquisitions.

Overall, ADENTRA performed as designed in 2025, delivering consistent results while building capacity for long-term growth.  As we move forward, we approach the near-term outlook with measured caution. While headwinds persist, including continued affordability challenges for homebuyers and broader geopolitical uncertainty, we remain optimistic about long-term growth, supported by structural housing demand and favorable demographics.

We will continue to pursue our core strategies with disciplined execution, while targeting double-digit returns on invested capital over the cycle, and long-term value creation for our investors,” said Mr. Brown.  

Tariffs

Country Tariffs

On February 20, 2026 the Supreme Court of the US (“SCOTUS”) ruled that the International Emergency Economic Powers Act (“IEEPA”) does not give the President the authority to impose tariffs. In response, on February 21, 2026 the President issued a proclamation imposing 10% duties on US imports pursuant to Section 122 of the Trade Act of 1974 (“S122 Tariffs”) effective February 24, 2026. The earlier message from the administration was that the S122 tariffs would subsequently increase to 15%. This has not yet taken place. 

As a result of the SCOTUS ruling noted above, and after taking into account S122 Tariffs, we estimate that 26% of our product mix will be subject to tariffs, at average rates of 10%. As it relates to a potential refund of tariffs paid under IEEPA, we do not expect refunded amounts, if any, to be material.

Product Tariffs

The US Department of Commerce’s (“Commerce”) Section 232 (“S232”) investigation into the US national security implications of timber, lumber, and derivative product imports (“Wood Products”) concluded in September 2025. Our products were largely excluded from the scope of S232.

Countervailing Duties (CVD) and Anti-Dumping (AD)

In Q2 2025, Commerce completed its review of certain hardwood plywood products from Vietnam, which were alleged to be circumventing existing CVD and AD orders against Chinese hardwood plywood. The review’s outcome was favorable for us, as it removed the circumventing designation and associated duties on products we had imported. Consequently, we received refunds of $23.0 million and accrued interest of $2.5 million in 2025.

Also during the second quarter of 2025, Commerce initiated new CVD and AD investigations relating to hardwood and decorative plywood imports from China, Indonesia, and Vietnam into the US. In January 2026, Commerce announced preliminary CVD rates ranging from 2.4% to 128.66% depending on the exporter. In February 2026 Commerce announced preliminary AD rates ranging from 19.98% to 196.14% depending on the exporter. Final rate announcements are expected later in 2026. The Company does not expect the outcome of this investigation to have a material effect on its supply chain or result in duty liabilities.

Response

We are well-prepared to manage tariff impacts. Our price pass-through model allows us to offset increased product costs, including those related to tariffs, by adjusting selling prices. This approach has helped us maintain consistent gross margins and generate additional gross profit during periods of rising product costs. Our global sourcing network spans over 30 countries, providing diverse product options and different price points for our customers. As a key partner for our US vendors, which represents the majority of our sourcing, we also have a strong domestic supply if customers prefer US products over imported ones.

In the event that tariff-related price increases reduce consumer demand, we can adjust inventories and preserve cash flow. During economic slowdowns, we release working capital and pay down debt. We believe that any short-term reduction in home building will only worsen the existing housing shortage in the US, ultimately boosting future demand for our products.

Outlook

Unfavorable winter weather in early 2026 resulted in fewer selling days for many of our operations in January and February, with sales down 2% as compared to the first two months of 2025. First quarter 2026 gross margin percentage is expected to moderate relative to Q1 2025, while continuing to exceed our established benchmark, driven by product mix.

We continue to approach the near-term outlook with measured caution. Elevated US mortgage rates and limited housing inventory continue to pose affordability hurdles for prospective buyers. Additionally, the dynamic trade landscape between the US and major global partners and recent geopolitical tension are contributing to continued uncertainty in the economic environment.

On a positive note, the easing of interest rates in late 2025, combined with favorable long-term structural demand drivers, could support a more constructive backdrop later in 2026 and into 2027. In addition, the US administration has publicly committed to lowering housing costs and expanding supply. Recent actions include federal purchases of mortgage-backed securities and an executive order restricting institutional investors from buying single-family homes. Other potential policy proposals include longer mortgage terms, the use of retirement savings for a down payment, mortgage portability, and capital gains relief on the sale of a primary residence. Government actions and policy that support the housing market could support demand for housing, and our products.

We remain optimistic about the long-term trajectory of the residential construction sector. This confidence is underpinned by enduring structural undersupply, favorable demographic trends, and an aging housing stock. We continue to prioritize operational discipline and the consistent execution of our proven strategy, leveraging our extensive experience in navigating diverse economic cycles. Our broad product portfolio, national footprint, and strong supplier partnerships further enhance our ability to adapt and perform in a dynamic environment.

Moving forward, we will continue to advance our strategic priorities within our full-cycle value creation framework, as more fully described in our shareholders’ letter and investor presentation. We are targeting double-digit returns on invested capital and accretive growth through a combination of platform efficiency, organic growth initiatives, and tightly managed execution of our acquisitions strategy.

Q4 and Year-end 2025 Investor Call

ADENTRA will hold an investor call on Thursday, March 12, 2026 at 8:00 am Pacific (11:00 am Eastern). Participants should dial 1-888-510-2154 or (437) 900-0527 (GTA) at least five minutes before the call begins. A replay will be available through March 19, 2026 by calling toll free 1-888-660-6345 or (289) 819-1450 (GTA), followed by passcode 01419 #.

Summary of Results

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