Doman Building Materials Group Ltd.

Good afternoon, ladies and gentlemen, and welcome to the Domain Building Materials Group Limited Fourth Quarter 2022 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on March 10, 2023. I would now like to turn the conference over to Ali Madavi. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Dolman Building Materials' fourth quarter and full year 2022 financial results conference call. Joining us this afternoon are Amar Dolman, Chairman and Chief Executive Officer, and Jay Koh, Chief Financial Officer of the company. If you have not seen the news release, which was issued yesterday, it is available on the company's website at dolmanbm.com, as well as on CDAR, along with our MD&A and financial statements. I would also like to remind you that a replay of this call will be accessible until midnight on March 24th. Following the presentation, we will conduct a Q&A session for analysts only. Instructions will be provided at that time for you to join the queue for the questions. Before we begin, we are required to provide the following statements regarding forward-looking information, which is made on behalf of Dolman Building Materials Group Limited and all of its representatives on this call. Remarks and answers to your questions today may contain forward-looking information about future events or the company's future performance. This information is subject to risks and uncertainties that may cause actual events or results to differ materially. Any information regarding forward-looking statements is made as of the date of this call, and the company does not undertake to update any forward-looking statements. Please read the forward-looking statements and risk factors in the MD&A as these outline the material factors which could cause or would cause actual results to differ. The company will not provide guidance regarding future earnings during today's call, and management does not anticipate providing guidance in future quarterly or interim communications with investors. I'll now turn the call over to Omar.

Thanks very much, Ali. Good afternoon, everybody, and thanks for joining us on today's call. I'll begin by highlighting some of our key financial metrics, followed by some color on our operations during the fourth quarter. And I'm going to hand the call over to Jay Koh, who's going to review the numbers in further detail. We'll start by highlighting the efforts of all of our employees across the various business segments during what can be best described as a challenging year, with price volatility and a number of macroeconomic headwinds. While I'm pleased with our accomplishments, it's important to look back at the year which started off with the continued and lingering effects of the COVID-19 global pandemic and which thankfully started to wane towards the middle of the year. This transition resulted in a reversion to what we consider a more normal business environment, with the demand for various end markets returning to more historical levels and spending categories. However, continuing pricing volatility combined with inflationary concerns and increasing interest rates resulted in fears of a potential recession. Although the complex landscape challenged our visibility throughout the year, I'm pleased to report that we achieved record sales and overall strong operating results. We were pleased with how our growth strategy continued to unfold, resulting in strong annual sales and earnings, while remaining focused on margin protection. Despite the pricing environment and uncertainties caused by macroeconomic forces we faced throughout the year, we maintained focus and discipline on servicing the needs of our customers with the utmost level of quality and service, while working through a highly volatile pricing environment for our wood products. In parallel, we continue to optimize our balance sheet by using our free cash flow generation to reduce our debt significantly. This performance along with our continued fiscal diligence resulted in a reduction of our net debt by more than $135 million on a year-over-year basis. Additionally, we remain focused on further opportunities for margin expansion with our ongoing investment on continuous improvement programs. We continue to balance these actions aimed at improving our near-term profitability with longer-term decisions to support our growth trajectory and broaden out our market opportunities. Despite our general optimism, we are moving forward cautiously to ensure that we emerge in this period as an even stronger company. Our extended footprint in Canada and the US continues to allow for top-line growth and profitability for the future while we continue to use this platform for incremental and unique growth opportunities. The strength in our full-year results came from the combination of continued strong pricing, albeit with some volatility, robust volumes in all of our markets, which resulted in full-year revenues exceeding $3 billion, representing another new record. Further, our ongoing cost management and focus on operational efficiencies enabled the company to realize much of the revenue line gains to the EBITDA and bottom lines. We're very proud of the strength of our financial performance and believe that there's a lot to be gained from the strength and momentum which has resulted from our successes in 2022 and particularly in the fourth quarter as we paved the path forward. As a result of these efforts during the fourth quarter, we continue to see robust demand for our product categories, which resulted in our revenues coming in at $573 million, gross margin at 14.3% or $82 million, adjusted EBITDA amounting to $33 million, and our quarterly dividend was $0.14 per share, and it was declared. I believe that's our... 55th quarter of dividends. Despite all the challenges we faced in the year, we remain encouraged and enthusiastic with our fourth quarter and full year 22 results and continue to build on our successes as we look into the future of the company. We were able to deliver these strong operating results with leaner inventory levels in certain categories while continuing to meet or exceed customer expectations of product availability. Looking ahead, we remain excited as we enter the new year. Despite inflationary and interest rate concerns, We have entered 2023 with a position of strength supported by our market position and our strong balance sheet. At the same time, we remain mindful of the macroeconomic environment, and as such, we're taking a conservative approach to full-year planning. We are optimistic about the activity and demand for our products in many key markets on both sides of the border. We have worked and managed through similar cycles and will remain focused, as always, to protect and maximize margins while strengthening our balance sheet with steadfast focus and reducing our debt with the strength of our free cash flow generation. And with that, I'd like to ask Jay Cohn, our CFO, to take over and provide a review of the company's fourth quarter and full year financial results in greater detail. And then we're going to open up the call for questions from analysts. Thank you, Jay.