GICS Sector : Industrials
ADENTRA Inc.engages in the wholesale distribution of architectural building products to the residential, repair and remodel, and commercial construction markets.It offers a range of decorative surfaces, including architectural grade plywood and veneers, hardwood lumber, laminates, acrylics, and composites for use in commercial and residential applications; specialty plywood and composite panel products for residential and commercial cabinet, countertop, store fixture, and RV and furniture industries; and other products comprising moldings, cabinet hardware, doors, millwork, adhesives, solid surface products, and decorative laminates.
ADENTRA delivered a strong Q3, with sales reaching $592 million, up 4% year-over-year, and adjusted EBITDA of $49.9 million. The company's gross margin came in at 21.4%, slightly higher than last year, reflecting its continued discipline in pricing and procurement. Adjusted EPS was $0.70, while actual EPS was $0.961, beating estimates of $0.3964.
Publication Date: Nov -30
The company's organic sales grew 1.7% as product prices continued to firm throughout the year. ADENTRA's product mix remains well-balanced, with roughly 30% of its products subject to country-specific tariffs at average rates around 20%. The company continues to manage tariff exposure through its price pass-through model and diversified global sourcing network.
ADENTRA generated $60.6 million of operating cash flow in the quarter, including $35 million from operating cash flow before changes in working capital and an additional $25 million from working capital release. The company's leverage ratio was 2.7x, down from the seasonal peak in Q2, and is expected to be closer to the mid-2s by the end of the year.
Over the last 5 years, ADENTRA has acquired companies representing $1.1 billion in acquired revenue, diversifying its product offering and expanding its exposure to higher margin specialty categories. The integration of Woolf, acquired in July 2024, continues to perform on plan, broadening the company's Midwest presence and enhancing access to the Pro Dealer channel.
With a P/E Ratio of 13.15 and an EV/EBITDA of 6.92, ADENTRA's valuation appears reasonable. Analysts estimate next year's revenue growth at 2.8%. The company's stable volumes, price appreciation, and disciplined costs, along with a high free cash flow conversion rate and decreasing leverage, position it well for future growth. As Faiz Karmally noted, "we've got a large opportunity set that we've continued to nurture here as we've delevered through the course of the year," indicating a strong potential for future M&A activity.
ADENTRA (TSE:ADEN) Is Increasing Its Dividend To $0.16
Nov -14
Is There An Opportunity With ADENTRA Inc.'s (TSE:ADEN) 26% Undervaluation?
Nov -12
Adentra Stock Offers "Attractive Value", Notes Stifel Canada
Nov -11
ADENTRA Announces Strong Third Quarter 2025 Results
Nov -10
ADENTRA (TSE:ADEN) Is Paying Out A Dividend Of $0.15
Oct -15
ADENTRA to Host Third Quarter 2025 Results Conference Call
Oct -14
ADENTRA Outperform Rating Confirmed and Target Raised at National Bank on Q2 Results
Aug -11
Can Mixed Fundamentals Have A Negative Impact on ADENTRA Inc. (TSE:ADEN) Current Share Price Momentum?
Aug -08
Strong demand for sustainable building materials, increasing adoption of energy-efficient solutions, and growing government incentives for green infrastructure drive the 7% growth of Architectural Building Products from ADENTRA Inc. Additionally, rising construction activities, urbanization, and a focus on reducing carbon footprint contribute to the segment's expansion.
A cloud-based platform for data integration and management, providing real-time data access and analytics.
A data integration platform for connecting disparate systems, applications, and data sources.
A business intelligence platform for data analysis, reporting, and visualization.
A RESTful API for integrating Adentra's data integration and analytics capabilities into custom applications.
Custom consulting and implementation services for Adentra's products and solutions.
The threat of substitutes for ADENTRA Inc. is moderate due to the presence of alternative products and services in the market.
The bargaining power of customers is high due to the availability of multiple options and the ability of customers to switch to alternative products and services.
The bargaining power of suppliers is low due to the presence of multiple suppliers and the ability of ADENTRA Inc. to negotiate prices and terms.
The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.
The intensity of rivalry is high due to the presence of multiple competitors and the need to differentiate products and services to gain market share.
| Value | |
|---|---|
| Debt Weight | 44.75% |
| Debt Cost | 10.60% |
| Equity Weight | 55.25% |
| Equity Cost | 11.86% |
| WACC | 11.30% |
| Leverage | 80.99% |
Value: 6.9
Growth: 5.0
Quality: 5.2
Yield: 8.0
Momentum: 5.0
Volatility: 9.3
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Growth: 4.9
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Growth: 7.1
Quality: 4.5
Yield: 0.0
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Value: 2.7
Growth: 6.2
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Volatility: 4.3
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