For the three months ended March 31, 2017, Hardwoods Distribution's sales increased by 63.3% to $257.1million, from $157.4 million in 1Q 2016. Of the $99.7 million year-over-year increase, $93.7 million was due to the addition of Rugby’s operations and $13.6 million, representing an 8.6% increase in sales, was due to organic growth, as the company said in the press release received by Lesprom Network.
1Q 2017 gross profit increased to $48.3 million, an increase of 72.2% from $28 million in 1Q 2016. The year-over-year improvement reflects higher sales revenue, combined with a higher gross profit margin.
As a percentage of sales, gross profit margin increased to 18.8%, from 17.8% in 1Q 2016, reflecting Rugby's higher margin business model and increased margins from Hardwoods' operations.
The Company considers a gross profit margin of 18% to 19% to be sustainable for the business at this point in the market cycle.
1Q 2017 EBITDA increased 48.4% to $14 million, from $9.4 million in 1Q 2016. The $4.6 million gain primarily reflects the increase in gross profit, partially offset by higher operating expenses before depreciation and amortization.
Profit for the period increased 71.7% to $7.9 million, from $4.6 million during the same period in 2016. The year-over-year increase reflects the higher EBITDA, partially offset by a $0.4 million increase in income tax expense and a $0.9 million increase in depreciation and amortization.
Hardwoods is North America’s largest distributor of architectural grade building products to the residential and industrial construction markets. The Company operates a North American network of 58 distribution centres, as well as one sawmill and kiln drying operation.
