Earnings call transcript: Doman Building Materials Q4 2024 misses EPS forecast

Doman Building Materials Group Ltd reported fourth-quarter earnings for 2024, missing analysts’ expectations. The company posted earnings per share (EPS) of 0.10 USD, falling short of the forecasted 0.1212 USD. Revenue also came in below expectations at 707.8 million USD, compared to the anticipated 725.23 million USD. Following the earnings release, the company’s stock saw a slight decline of 0.13% in after-hours trading. According to InvestingPro analysis, the company currently appears undervalued and offers a substantial 7.47% dividend yield, maintaining dividend payments for 20 consecutive years.

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Key Takeaways

• Doman Building Materials missed both EPS and revenue forecasts for Q4 2024.
• The company reported a 6.9% increase in annual revenue year-over-year.
• Net earnings decreased from 75.8 million USD in 2023 to 54.2 million USD in 2024.
• Doman is investing in automation and expanding its product offerings in the U.S.
• The company anticipates flat to slightly increased volumes for 2025.

Company Performance

Doman Building Materials demonstrated robust annual revenue growth of 6.9%, reaching 2.66 billion USD in 2024. Despite this growth, net earnings declined to 54.2 million USD from 75.8 million USD in the previous year. With a market capitalization of $455.36 million and a P/E ratio of 11.81, the company maintains a strong financial position. The company’s diversified business model and national presence in Canada and the U.S. continue to provide resilience against market cycles.

Financial Highlights

• Revenue: 2.66 billion USD (6.9% increase from 2023)
• Net earnings: 54.2 million USD (decrease from 75.8 million USD in 2023)
• Gross margin: 424.8 million USD (16% of sales)
• Adjusted EBITDA: 195.5 million USD (0.3% decrease)
• Quarterly dividend: 0.14 USD per share

Earnings vs. Forecast

Doman Building Materials reported an EPS of 0.10 USD, missing the forecast of 0.1212 USD by approximately 17.5%. Revenue fell short of expectations by 17.43 million USD, coming in at 707.8 million USD against a forecast of 725.23 million USD. This marks a deviation from the company’s historical trend of meeting or exceeding earnings expectations.

Market Reaction

Following the earnings announcement, Doman’s stock experienced a modest decline of 0.13% in after-hours trading. The stock’s movement reflects investor sentiment reacting to the earnings miss, with shares trading at 7.49 USD, slightly below the previous close of 7.50 USD. According to InvestingPro data, analyst targets suggest significant upside potential, with price targets ranging from $7.62 to $8.66. The stock remains within its 52-week range, between 6.32 USD and 9.96 USD.

Outlook & Guidance

Doman Building Materials is focused on organic growth and market share expansion. The company plans to increase capital expenditures by approximately 15% compared to 2024, with significant investments in automation and efficiency improvements. InvestingPro’s Financial Health Score of 2.49 (Fair) and strong current ratio of 2.94 support the company’s expansion strategy. Management is closely monitoring potential impacts from lumber tariffs and macroeconomic conditions.

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Executive Commentary

CEO Amar Dohmen emphasized the company’s strategic focus, stating, "We’re hoping that translates into flat to slightly up. But let’s hope the spring season gets started and then we’ll get a feel." He also addressed financial management, noting, "We’ll figure out a way to make sure we stay within our limits where we’re comfortable on the debt to EBITDA ratios and cash flows."

Risks and Challenges

• Macroeconomic headwinds and pricing challenges could impact future performance.
• Potential lumber tariffs may affect costs and pricing strategies.
• Weather-related disruptions in Q1 could pose operational challenges.
• Maintaining a strategic approach to mergers and acquisitions is crucial for growth.
• Balancing debt levels with strategic investments remains a priority.

Q&A

During the Q&A session, analysts inquired about the demand for fire retardant products in California and potential impacts of lumber tariffs. The company addressed concerns about Q1 weather challenges and reiterated its commitment to maintaining a strategic approach to mergers and acquisitions and balance sheet management.

Full transcript - Doman Building Materials Group Ltd (DBM) Q4 2024:

Conference Operator: Greetings, and welcome to the Doman Building Materials Group Fourth Quarter and Full Year twenty twenty four Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Ali Madhavi.

Please go ahead.

Ali Madhavi, Investor Relations, Doman Building Materials Group: Thank you and good morning everyone and thank you for joining us this morning for Doman Building Materials’ fourth quarter and full year twenty twenty four financial results conference call. Joining me this morning are Amar Dohmen, Chairman and Chief Executive Officer and James Coe, Chief Financial Officer of Dohmen Building Materials Group. If you have not seen the news release, which was issued yesterday, it is available on the company’s website at domenbm.com as well as on SEDAR Plus along with our MD and A and financial statements. I would also like to remind you that a replay of this call will be accessible until midnight, March fourteen, twenty twenty five. Following management’s presentation of the twenty twenty four fourth quarter financial results, we will conduct a question and answer session for analysts only.

Instructions will be provided at that time for you to join the queue for questions. Before we begin, we are required to provide the following statements regarding forward looking information, which is made on behalf of Dohmen Building Materials Group Limited and all of its representatives on this call. These 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 and 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 Amar.

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Thanks, Ali, and good morning. I’d like to begin by highlighting some of our key financial metrics, followed by some color on our operations during the fourth quarter, and then I’ll hand the call over to Jay Code, our CFO, who can review the numbers in further detail. 2024 would be best described as a challenging year vis a vis pricing and several macroeconomic headwinds. However, it was also a year when we seized on several growth opportunities, which continued to further strengthen and expand our footprint in end markets. We started the year in very similar shape and market conditions that we experienced while exiting 2023 and 2024 witnessed great opportunity.

Throughout the year, we remain focused with the business across all divisions and on both sides of the border, both operationally and with a view to acquisitions. Despite the impact of lower year over year pricing in certain construction material categories, our business units continue to show resilience in volumes, while delivering very strong gross margin performance. While pricing levels are nowhere near their peak in prior years, our continued action towards executing our strategic growth objectives, managing costs and optimizing operational efficiencies resulted in strong financial results as we closed out the year. Despite the impact of the lower pricing environment for construction materials on a year over year basis, we continue to demonstrate stability and strength in our financial performance given pricing levels for lumber, OSB and plywood markets in 2024 were often asynchronous during the year and at times meaningfully lower when compared to 2023, particularly in The United States. Despite this, our ongoing focus on key objectives resulted in strong revenues, gross margin, EBITDA net income, while paying our shareholders a quarterly dividend of $0.14 per common share or $0.56 per common share on an annual basis.

I am very proud of the company’s performance throughout 2024 given the market conditions we had to work through. Despite trends and volatility that at times presented us with challenges, we remain encouraged and pleased with the resilience of our diversified business model, withstanding these macroeconomic cycles resulting in annual revenues, gross margin, adjusted EBITDA and net earnings totaling $2,700,000,000.0425000000 dollars 1 hundred and 90 6 million dollars and $54,000,000 respectively in 2024. Our ability to deliver consistent performance across a variety of market cycles results from our tireless focus on operations into the many successful acquisitions we’ve completed throughout the years. 2024 also marked a period of significant corporate actions, including the acquisition of Centimeters Tucker Lumber as well as the purchase of Southeast Forest Products. These acquisitions have expanded our growing footprint in The United States and will further strengthen our position as a market leader, while positioning Dohmen for further growth and expansion.

We are very proud that our company now has reached from coast to coast in both Canada and The United States. Our ability to successfully complete these accretive acquisitions stem from the financial discipline to always have a growth friendly balance sheet in place. Throughout 2024, we strengthened our financial flexibility by successfully renewing our $500,000,000 credit facility, which we increased to $580,000,000 in 2025, as well as completing $365,000,000 in senior unsecured note offerings. Now focusing on the most recent fourth quarter results adjusting for seasonality, we experienced strong activity across all business divisions. Our ongoing cost management and focus on operational efficiencies enabled the company to demonstrate revenue performance, while gross margin continued to be within our target range as well as our EBITDA and bottom lines.

We are proud of our financial performance and believe there’s a lot to be gained from the strength and momentum which has resulted from our successes in recent years. As a result, these efforts during the fourth quarter, we continue to see robust demand for our product categories, resulting in revenues coming in at $7.00 $8,000,000 gross margin at 16%, hundred and thirteen million dollars adjusted EBITDA amounting to $52,000,000 net earnings of just over $8,000,000 and then lastly, as previously mentioned, our quarterly dividend of $0.14 per share was declared. Our ability to withstand market and pricing volatilities during the previous and most recent market cycles is a result of our tireless focus on operations gives credit to the successful acquisitions we have completed throughout the years, which have and continue to diversify our business model and as such have enhanced shareholder value. We remain very enthusiastic and confident about the prospects ahead and look forward to further demonstrating the strength and leverage available in the business model as we continue to be well positioned to take advantage of sensible organic growth opportunities. On the heels of successfully integrating recent acquisitions, our relentless focus on paying down debt and strengthening our balance sheet remains a priority, which will enable us once again to be in a strong position to take advantage of strategic opportunities.

Overall, 2025 is off to a decent start with its own unique challenges, which we are prepared to set up to deal with. I continue to be pleased with how our growth strategy continues to unfold, resulting in strong sales and earnings in the face of a tough year over year pricing environment, while remaining focused on margin protection during these times. With all that said, I would now like to ask Jay Cohen, our CFO, to take over and provide a review of the company’s full financial results in greater detail, and then we’re going to open up the call for analyst questions. Jay? Thank you, Amar.

James (Jay) Coe, Chief Financial Officer, Doman Building Materials Group: Good morning, everyone. Sales for the year ended 12/31/2024 were $2,660,000,000 versus $2,490,000,000 in 2023, representing an increase of $172,100,000 or 6.9%, largely due to the positive impact of the company’s acquisitions of Southeast Forest Products and Centimeters Tucker Lumber completed in 2024. The Company’s sales in the year were made up of 76% construction materials compared to 74% last year with the remaining balance of sales resulting from specialty allied products of 20% and other sources of 4%. Dolmen’s gross margin was $424,800,000 versus $402,700,000 in 2023, an increase of $22,100,000 benefiting from our contributions of our twenty twenty four acquisitions. Gross margin percentage was 16% during the year compared to 16.2% achieved in ’twenty three with the decrease in percentage gross margin largely due to the impact of 2024 slowing in the construction materials market.

Expenses for the year were $306,500,000 compared to $274,700,000 an increase of 31,800,000 or 11.6% over 2023. As a percentage of sales, 2024 expenses were 11.5% compared to 11% last year. Distribution, selling and administration expenses increased by $22,600,000 or 10.9% to $229,200,000 in 2024 versus $206,600,000 in the prior year, mainly due to expenses related to the acquisitions as well as broad inflationary pressures. As a percentage of sales, these expenses were 8.6 compared to 8.3% last year. Depreciation and amortization expenses increased by $9,100,000 or 13.4% from $68,100,000 to $77,200,000 mainly due to additions of property, plant and equipment and new intangible assets related to the 2024 acquisitions.

Finance costs for 20 to $40,500,000 in 2023, an increase of $13,200,000 largely as a result of the additional finance costs related to the new 2029 unsecured notes as well as higher interest rates on generally increased balances on our variable rate loan facilities in 2024. Directly attributable acquisition costs during this year were $3,300,000 These costs included due diligence, legal, environmental, financial, management resources and other advisory services directly attributable to acquisition activities. Adjusted EBITDA before these non recurring costs was $195,500,000 a slight decrease of $539,000 or 0.3% compared to 23. Percent. Net earnings for 2024 were $54,200,000 compared to $75,800,000 and 23% a decrease of $21,600,000 Adjusted net earnings before the non recurring acquisition costs were $56,600,000 a decrease of $19,200,000 compared to $23,000,000 Turning now to the statement of cash flows.

Operating activities before non cash working capital changes generated $148,700,000 in cash compared to $151,000,000 in ’twenty three. Changes in non cash working capital items consumed $41,200,000 in cash versus $15,700,000 in ’twenty three. The increase in cash used in non cash working capital was largely related to incremental activities of the 2024 acquisitions. The Company generated $345,500,000 of cash from overall financing activities this year compared to net repayments of $85,800,000 in cash in ’twenty three. Within overall financing activities, net debt increased by $491,800,000 in the year, largely reflecting the funding sources for our 2024 acquisitions purchase consideration and their related working capital activities.

Our new 2029 unsecured notes generated gross proceeds of $366,500,000 of which $52,300,000 were utilized to partially pay down the outstanding balance of our twenty twenty six unsecured notes, which now stand at $272,200,000 compared to their previous outstanding balance of $324,500,000 The net proceeds from the 20 20 nine unsecured notes along with the revolving loan facility and cash on hand were utilized as purchase price consideration for the 24 acquisitions. Shares issued net of transaction costs generated $1,500,000 of cash compared to $1,200,000 in ’twenty three. The Company also returned $48,800,000 to shareholders through dividends paid during the year, largely in line with 2023. Payment of lease liabilities including interest consumed $29,100,000 of cash compared to $26,300,000 in 2023. The company’s lease obligations generally require monthly installments and these payments are all current.

We also note the Company was not in breach of any of its lending covenants during the year ended 12/31/2024. Overall, investing activities consumed $474,300,000 of cash compared to $14,100,000 in 2023. Investing activities this year included the acquisitions of Southeast Forest Products and Centimeters Tucker Lumber for total cash consideration of $460,800,000 Additionally, the company invested net cash of $13,400,000 in new property, plant and equipment during the year compared to $14,100,000 in 2023, representing purchases net of proceeds from dispositions. This concludes our formal commentary and we’d now be happy to respond to any questions you may have. Thank you.

Operator?

Conference Operator: Thank you. Our first question is coming from Matthew McKellar from RBC Capital Markets. Your line is now live.

Matthew McKellar, Analyst, RBC Capital Markets: Good morning. Thanks for taking my questions. You’ve not been able to quote businesses in national accounts across The U. S. And that’s important to your customer base.

My question would be, now that you’ve achieved the ability to do that, does that imply any kind of shift in how you approach M and A or capital deployment more broadly going forward?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: No, I don’t think it does. I think we want to continue to build out in certain regions where we still have opportunities. But certainly powering up in certain regions is something we’re not afraid to do to take over more volume and more market share as time goes on. So we’ve got a lot of runway ahead of us to continue to grow, especially in The United States.

Matthew McKellar, Analyst, RBC Capital Markets: Great. Thanks very much. You’ve also made a couple of comments around taking advantage of organic growth and strategic opportunities. Certainly more you could provide in terms of color around what you may be contemplating there? And maybe more broadly aside from delevering and integrating your two recent acquisitions, what are your focus areas for improving the business in 2025?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes, I think it’s exactly those. Organic growth certainly leveraging the national footprint that we now have in The U. S, especially trying to grow share in Canada. Canada’s market is a softer as we all know here with housing. But certainly we’re trying to grow our market share every day.

Again with the product lines that we carry, we’re always looking at putting in new product lines. In The U. S, we would like to slowly continue to expand to add to our treated lumber arsenal down in The States with some product lines when they make sense and the opportunities arrive for us. So we’ll continue to work on that and that’s the organic piece. Acquisition certainly, we’ve done a couple of large ones this year sorry, last year and are digesting those this year.

So our hands are full there, but things are in good shape and our new teams are just doing an excellent job. So we’re very proud of those acquisitions. And we just need some better weather to start pushing some sticks out.

Matthew McKellar, Analyst, RBC Capital Markets: Great. And last one for me. How should we what should we expect for CapEx in 2025?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes. I think it’s going to be maybe 15% higher than last year, just depending it just depends on how much is spent. Some of those activities may be invested in new production, so not just maintenance CapEx. Obviously, with the two new acquisitions being large, there’s going to be more CapEx. But certainly in percentage, it won’t be any different looking at the size and scope of our business, but it will go up a few million bucks just depending on what we spend and invest in.

And we’re pretty excited about investing in some automation, whether that’s at Doman Lumber division, Doman Tucker Lumber, Doman U. S. And some in Canada as well. So we’re looking at different things to get more efficient and get our labor count down in certain areas and get our production up. So that’s where some of those investments will go this year, Matthew.

Matthew McKellar, Analyst, RBC Capital Markets: Thanks very much. I’ll turn it back.

Conference Operator: Thanks. Next (LON:NXT) question today is coming from Yuri Zaretta from Canaccord Jr. Woodie.

Yuri Zaretta, Analyst, Canaccord: So that last question is actually a good segue for my first one because I was going to ask about automation with it becoming more topical on the back of increased fears around labor availability. So apart from that list of potential investments you mentioned in the last answer, is there any additional information you could share with regards of what you’re thinking or doing in terms of automation, productivity enhancements, stemming from what you’ve seen Tucker Lumber do or otherwise?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Sure. Yes. We certainly have some new internal horsepower with Tucker’s Technologies. But going past those excellent things there, we’re looking at trying to make our sawmills more efficient and those are our specialty sawmills producing fencing and one inch and the like. So those are those, I would say, opportunities are being studied right now.

And we’ll make some investments, we believe, towards the end of this year in that area, whether it will be in Texas or Arkansas. Those are where primarily our fence mills are. And we’d like to continue to automate, reduce labor and get efficiencies up. So we want to do one at a time. So we’re working on one and that should hopefully come to fruition sometime in the fall.

And then if that turns out well, I think you’re going to see us populate that across the other sawmills.

Yuri Zaretta, Analyst, Canaccord: And second one from me. Could you help us piecing together a little bit how should we think about Q1 vis a vis Q4? I’m just thinking that there are obviously different moving pieces. On one hand, I believe Q1 is typically seasonally slowest. And I’ve also seen some peers showing that they’ve been negatively impacted by weather.

And also the other softwood lumber prices have continued to rise. So

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes, Q1

Yuri Zaretta, Analyst, Canaccord: Can we think about Q1?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes, sure. It’s I think everyone knows we’ve had severe winter in different we always have winter, but we’ve had severe winter in certain areas that normally don’t get affected by below freezing, especially in the Carolinas and Texas where it’s been super cold. Camphor concrete, that’s where everyone gets stalled back, right? So we’ve seen that happen. I think we’re through the worst of it.

Eastern Canada where you are I think is still pretty bad with snow and everyone’s just buried. So Q1 is Q1. We never look for it to hit a home run. So it’s kind of going to go by how the weather goes and we’re starting to see now in The U. S.

A pickup in construction where Canada, kind of Alberta is still in the deep freeze and snow. But Q1 will be Q1 again nothing to hit over the fence. But the good news is we don’t really see too many other issues so far except weather. And then of course, the tariff and all that stuff, no one can really understand or navigate that until things hit and how the consumer reacts. So that one, we’re all kind of waiting to see how that plays out.

Yuri Zaretta, Analyst, Canaccord: Okay. Thank you. That’s good color. I’ll jump back in the queue.

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Thanks.

Conference Operator: Thank

Nikolay Gorovich, Analyst, CIBC (TSX:CM) Capital Markets: you. Our

Conference Operator: next question is coming from Nikolay Gorovich from CIBC Capital Markets. Your line is now live.

Nikolay Gorovich, Analyst, CIBC Capital Markets: With the recent fires in California, can you discuss what sort of demand trends you’re seeing in your fire retardant products and what margin profile you get there as well?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes. We don’t disclose the margin profile per product, but certainly in the last month and a half, our orders at our Fontana treating plants for fire retardant have skyrocketed up. So we’re busy. We’ve got a long order filed down there near L. A.

So we’re very pleased seeing that. Not pleased by why we have that order filed due to obviously some rebuild with that terrible disaster. But certainly, we’ve got a nice lift there and we’ve got our production in line. We made some investments into the facility that produces that. We’re also currently building a kiln that we’re just waiting a final permit on in Northern California so we can produce fire retardant in the Bay Area.

And hopefully, this year, that will come online as well. So we’re pretty excited about those opportunities in California.

Nikolay Gorovich, Analyst, CIBC Capital Markets: I see. And tariff related question here. On the res lumber side, in the case tariffs are implemented and we see SPF lumber prices go up in The U. S, do you think the untreated lumber price in Canada remains unaffected? Or do you expect it to move kind of dollar for dollar with The U.

S. Price?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes. So really hard to navigate that until the tariffs come in and the market settles. So much SPF production going out of BC, We think SPF is going to have higher highs and higher lows no matter what. It’s going to be a stronger year for lumber, we think, on pricing just because the lack of availability. You throw the tariff on, it will definitely inflate in The U.

S. But up here, it might be a tariff out or tariff in price quoted by the mills. We haven’t really got there yet. So I think in a couple of weeks, we’ll start to see what the market will absorb, digest and trade to once these tariffs, if they do come in next week, look like.

Nikolay Gorovich, Analyst, CIBC Capital Markets: Yes, fair enough. That’s all

James (Jay) Coe, Chief Financial Officer, Doman Building Materials Group: I had. Thank you very much.

Zachary Evershed, Analyst, National Bank Financial: Thanks.

Conference Operator: Thank you. Our next question is coming from Zachary Evershed from National Bank Financial. Your line is now live.

Zachary Evershed, Analyst, National Bank Financial: Good morning, everyone. Congrats on the quarter. Thank you. Thanks. Could you break out for us the contribution from price versus volume in the quarter?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes, not off the top of my head. But I can tell you that volumes without the acquisition came up nicely in October and November. Then of course layering in Tucker, we had a nice lift there full three months of the quarter. But I don’t have that breakdown off the top of

James (Jay) Coe, Chief Financial Officer, Doman Building Materials Group: my head. Yes. And Zachary, it’s Jay here. Of course, we’ve got a mix in the impact of acquisitions there as well. So it’s a fairly complex mix of growth.

But organic volume, we can tell you was up slightly in the quarter.

Zachary Evershed, Analyst, National Bank Financial: That’s helpful. Thanks. And do you think there was anything kind of one timer in nature or a fluke? Or do you think this is more of a pushback to an underlying growth trend after a difficult two years?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes, hard to say. So we’re looking towards our key retail partners and asking them that question as they’re closer to the end use customer than we are certainly. And they’re calling, I think you might have seen all the box stores and others say they’re looking for a flat year on volume. I think it’s just because of the uncertainties. I don’t think it just directly relates to our particular business.

I think it’s the consumer is just kind of wondering what’s going on and might be a little more hesitant. Having said that, we believe that’s good for our products because we’re well priced and a consumer might look at lumber primarily instead of other expensive products in their backyard and might redo their deck or fence and were priced properly with the way lumber sits today. So we’re hoping that translates into flat to slightly up. But let’s hope the spring season gets started and then we’ll get a feel.

Zachary Evershed, Analyst, National Bank Financial: That’s helpful. Thank you. And then given the kind of puts and takes we’ve seen with the weather impacts, how is Q1 trending thus far?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: Yes. I think I was just commenting on that. It’s Q1. The weather has been horrible in February. January was a bit better, but we’ve had severe weather where we normally don’t have in February.

So Q1 will be okay. Let’s see how March shakes out, but there’s a lot of snow in a lot of buried areas and a lot of areas that couldn’t pour concrete as it went below freezing and certain regions that are actually growing rapidly as far as housing goes, but we’re stalled. So that tells me we might get a little bit of a pickup kind of come around April, May and things will start to gel better. But we’re kind of waiting to see how March unfolds as it starts tomorrow.

Zachary Evershed, Analyst, National Bank Financial: And then just one last one. Obviously, you’re digesting two acquisitions at the moment. At what levels of leverage will you start looking at M and A and earnest again?

Amar Dohmen, Chairman and Chief Executive Officer, Doman Building Materials Group: We tend to not look at that as closely as the barometer of when and why we’ll do a deal. We’ll figure out a way to make sure we stay within our limits where we’re comfortable on the debt to EBITDA ratios and cash flows. And I can tell you with the last three years, as you know Zach very well, we’ve built the company into having a lot of free cash flow to hammer down the debt. So if we see a good opportunity, we’re not going to let it go by. Are we chasing anything?

No. But are we do we still have our eyes strategically on several different businesses? Absolutely. But we’ll always behave appropriately on the balance sheet to never put the farm at risk or get into an area that we don’t like. But certainly, stronger has been better for us.

And as we mentioned over time, sometimes in a year or two, we don’t do anything like the last couple of years and then 2024 comes around and we did two significant acquisitions that are fitting very well with the Dohmen system. And yes, we’ll just keep going at it. So again, there’s no strict formula of where we would do things or not do things. We’ll make it work if we have to.

Zachary Evershed, Analyst, National Bank Financial: Thank you very much. I’ll turn it over.

Conference Operator: Thank you. We’ve reached the end of our question and answer session. I’d like to turn the floor back over to Ali for any further or closing comments.

Ali Madhavi, Investor Relations, Doman Building Materials Group: Thank you again for joining us on behalf of the Dolmen team. We look forward to speaking to you on our Q1 conference call. That concludes today’s call. I’ll turn it back over to the operator to wrap things up. Have a great day.

Conference Operator: Thank you. That does conclude today’s teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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