Posted March 20, 2018
Hardwoods Distribution Inc. (“HDI”) announced financial results for the three months and full year ended December 31, 2017. For the year ended December 31, 2017, total sales increased by 31.4% to $1,037.0 million, from $789.3 million in 2016. Of the $247.7 million year-over-year increase, $224.1 million, representing a 28.4% increase in sales, was due to acquired businesses and $37.1 million, representing a 4.7% increase in sales, was due to organic growth.
Gross profit for the 2017 year increased 33.5% to $191.9 million, from $143.8 million in 2016. This improvement reflects the combination of increased sales and a higher gross profit margin. As a percentage of sales, gross profit margin increased to 18.5% from 18.2% year-over-year, primarily reflecting Rugby's higher margin business model, partially offset by the negative impacts of the Trade Case on gross margin.
For the year ended December 31, 2017, Adjusted EBITDA grew 22% to $56.3 million, from $46.1 million in 2016. The $10.2 million increase primarily reflects the $48.1 million increase in gross profit, partially offset by a $37.9 million increase in operating expenses (before a decrease in transaction expenses, an increase in mark-to-market adjustments relating to LTIPs, and an increase in depreciation and amortization).
For the three months ended December 31, 2017, total sales increased 3.3% to $247.4 million, from $239.4 million in 2016. Of the $8 million year-over-year increase, $7.7 million, representing a 3.2% increase in sales, was due to acquired businesses and $10.6 million, representing a 4.4% increase in sales, was due to organic growth.
4Q 2017 gross profit increased to $44.5 million, an increase of 2.3% from $43.5 million in Q4 2016. 4Q Adjusted EBITDA was $10.7 million, a decrease of $0.2 million from Adjusted EBITDA of $10.9 million in Q4 2016.
HDI is North America’s largest wholesale distributor of architectural grade building products to the residential and commercial construction sectors. The Company operates a North American network of 62 distribution centres, as well as one sawmill and kiln drying operation.