ADENTRA Announces Strong Second Quarter 2025 Results

Second quarter 2025 sales of US$597.1 million

LANGLEY, BC, Aug. 6, 2025 /CNW/ – ADENTRA Inc. (“ADENTRA” or the “Company”) today announced financial results for the three and six months ended June 30, 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 85 facilities in the United States and Canada. All amounts are shown in United States dollars (“US $” or “$”), unless otherwise noted.

Financial Highlights (as compared to Q2 2024 unless otherwise noted)

• Total sales increased to $597.1 million (C$826.5 million), up $47.6 million, or 8.7%, from $549.5 million (C$751.9 million)
• Gross margin percentage increased slightly to 21.8%, from 21.7%
• Operating expenses decreased by $3.6 million, or 3.9%
• Basic earnings per share increased to $0.89 (C$1.23), from $0.74 (C$1.01) per share
• Adjusted basic earnings per share of $0.88 (C$1.22), compared to $1.03 (C$1.41) per share
• Adjusted EBITDA increased to $54.3 million (C$75.1 million), up 12.0% from $48.5 million (C$66.3 million)
• Cash flow provided by operating activities of $33.9 million, as compared to $23.8 million in the prior-year period
• Effectively deployed capital in Q2 2025, returning $2.7 million in cash to shareholders via dividends and $8.5 million via share repurchases
• Declared a dividend on August 6, 2025 of C$0.15 per share, to shareholders of record as at October 20, 2025, to be paid on October 31, 2025

“We delivered strong results in the second quarter, demonstrating the resilience of ADENTRA’s business model in a challenging environment,” said Rob Brown, President and CEO of ADENTRA. “Our positive results included second quarter sales of $597.1 million, Adjusted EBITDA of $54.3 million, and Adjusted earnings per share of $0.88, which we achieved against a backdrop of softer construction markets.”

“Our 8.7% year-over-year sales growth reflects the positive impact of our July 2024 acquisition of Woolf Distributing, backed by our success in maintaining a steady organic sales pace. Continued strong operational execution also resulted in a gross margin percentage of 21.8%, slightly bettering the  21.7% we achieved in the same period last year, and the 21.6% generated in Q1 2025.”

“Our second quarter performance translated into cash flow from operations of $33.9 million, which we used to reduce debt and return $11.2 million of capital to shareholders through dividends and opportunistic share repurchases. From March 17, 2025 to June 30, 2025, we repurchased 2% of our outstanding shares at an average price of C$27, providing significant accretion for our shareholders.”  

“Moving into the second half of 2025, we anticipate strong cash generation driven by planned inventory reduction and cash flows from operations. Our capital allocation priorities will continue to focus on reducing leverage and further strengthening our balance sheet, positioning us to execute on acquisitions and our other key strategic priorities in 2026. We remain firmly committed to our full-cycle performance framework, which emphasizes disciplined execution, double-digit capital returns, and long-term sustainable earnings-per-share growth, ” added Mr. Brown.

Tariffs

Country Tariffs

As of August 6, 2025, we estimate 14% of our product mix will be subject to country-specific tariffs, at an average tariff rate of 16%.

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”) is ongoing. Initiated on March 10, 2025, Commerce has until December 5, 2025, to make a Wood Products tariff recommendation to the President, though this could happen sooner. Currently Wood Products are understood to be excluded from country-specific tariffs discussed above. If S232 tariffs are imposed on Wood Products this could affect up to an additional 20% of our product mix. 

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 expect a refund of $23.9 million in previously paid duties, now included in accounts receivable. Additionally, we recovered $9.7 million in operating expenses, net of costs, related to these duties.

Also in the second quarter of 2025, Commerce initiated new CVD and AD investigations on hardwood and decorative plywood imports from China, Indonesia, and Vietnam into the US. The results of these investigations are uncertain, with final determinations expected as early as October 2025 for CVD and January 2026 for AD, though these dates may be extended. We estimate that 6% of our supply chain could be affected by these investigations. We do not anticipate that the outcome of this investigation will materially affect our supply chain or result in duty liabilities for the Company.

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 if rates vary by country. 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

While we recognize the strength of our second-quarter performance, we are approaching the near-term outlook with measured caution. Persistently high US mortgage rates and limited housing inventory continue to pose affordability hurdles for prospective buyers. Additionally, the intensifying trade tensions between the US and major global partners have heightened economic uncertainty and raised the risk of renewed inflationary pressures. Notably, our average daily sales in July are tracking approximately 4% below the Q2 2025 average.

Despite our prudent short-term stance, 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. We are targeting double-digit returns and accretive growth through a combination of platform efficiency, organic growth initiatives, and tightly managed consolidation of our fragmented market.

Q2 2025 Investor Call

ADENTRA will hold an investor call on Thursday, August 7, 2025 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 August 14, 2025 by calling toll free 1-888-660-6345 or (289) 819-1450 (GTA), followed by passcode 22564 #.

Summary of Results

Full story available on Benzinga.com