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Q1 2021 Earnings Conference Call
spk_1: Ladies and gentlemen, thank you for standing by and welcome to the Q 1 2000 and 21 Quantities Building Products Corporation First quarter earnings Conference call At this time, our participant lines are in a listen only mode. After the speaker's presentation, there will be a question and answer session to ask a question during the session. You need to press star one on the telephone. Please be advised at today's conference is being recorded. If you require any further assistance, please Press star zero I would not be Anthony's conference over to your speaker. Scott Silky S V P. CFO and treasurer. Thank you. Please go ahead, sir.
spk_0: Thanks for joining the call this morning on the call with me today is George Wilson, our president and CEO. This conference call will contain forward looking statements and some discussion of non gap measures. Forward looking statements and guidance discussed on this call and in our earnings release are based on current expectations. Actual results or events may differ materially from such statements and guidance and quantities undertakes no obligation to update or revise any forward looking statement to reflect new information or events. For more detailed description of our forward looking statement disclaimer and reconciliation of non gap measures to most directly comparable gap measures. Well, you see our earnings release issued yesterday and posted to our website. I'll now discuss the financial results. We reported revenue of 230.1 million during the first quarter of 2021 which represents an increase of 17.1% compared to 196.6 million during the first quarter of 2020. The increase was primarily the result of increased demand for our products across all product lines and operating segments. We reported net income of 7.9 million, or 24 cents per diluted share, for the three months into January 31st 2021 compared to $10,000 or zero since per diluted share, during the three months into January 31st 2020. The increase in net income was somewhat offset by $6.7 million increase in s DNA during the quarter, 4.6 million of which was related to the valuation of our stock based compass wards, mainly due to an increase in our stock price and 1.6 million of which was due to higher medical claims. On an adjusted basis, net income increased to $9 million or 27 cents per diluted share, during the first quarter of 2021 compared to 1.2 million, or four cents per diluted share, during the first quarter of 2020. The adjustments being made to MPs are for restructuring charges, certain executive severance charges, loss on the sale of a plant, accelerated DNA, foreign currency transaction impact and transaction and advisory fees on an adjusted basis model for the quarter increased by 55.4% to 24.3 million, compared to 15.7 million during the same period of last year. The increase is largely due to operating leverage from higher volumes. From a margin standpoint, this increase represents adjusted EBITDA margin expansion of approximately 260 basis points, moving on to cash flow in the balance sheet. Cash used for operating activities was 3.4 million during the three months ended January 31st 2021 compared to 3.7 million for the three months into January 31st 2020 while our free cash flow was negative. This is typical for the first quarter of each year and we did show improvement compared to last year. In fact, we did not need to borrow on our revolver during the quarter and still managed to both repay five million in bank debt and repurchased approximately 1.9 million of our stock. Our balance sheet is strong, our liquidity position is solid and our leverage ratio of net debt to last 12 months adjusted EBITDA is unchanged at 120.6 times. As of January 31st 2021 we will remain focused on managing working capital and generating cash as the year progresses. We will also continue to be opportunistic with respect to repurchasing are stop as stated in our earnings release. We remain optimistic about the economic recovery based on our strong first quarter results. In ongoing conversations with our customers, we are raising our expectations for the year and now expect approximately 12% sales growth in our North American administration segment, approximately 5% cell growth in a North American Cabinet components segment and approximately 22% sales growth in our European ministrations segments. We're now comfortable providing the following full year 2021 guidance net sales of 945 to 965 million adjusted EBITDA of 112 to 112.