ADENTRA (ADEN) investor relations material

Executive summary

• Q1 2026 delivered solid performance amid macroeconomic uncertainty, with $562.7 million in sales, 3.7% organic growth, and resilient margins driven by strategic investments in AI, supply chain, and disciplined M&A.

• Focused on advancing AI-enabled operating models, diversifying global supply chain, and maintaining an active M&A pipeline to drive long-term value.

• Managed cost discipline and working capital efficiency while investing in initiatives for future growth.

• Operating expenses increased just 0.5% year-over-year, reflecting ongoing cost control.

• Net income was $2 million, down from $4.1 million in Q1 2025.

Financial highlights

• Q1 2026 sales reached $562.7 million, up 3.7% year-over-year, driven by 2.1% higher volumes and 1.3% improved pricing.

• U.S. sales rose 3.9% to $520.8 million, while Canadian sales declined 2–3% due to softer demand.

• Gross margin was 20.2%, down from 21.6% last year, mainly due to product mix shift toward roofing products.

• Adjusted EBITDA was $38.3 million, down 4.1% year-over-year; Adjusted EPS was $0.38 versus $0.42 last year.

• Cash flow from operations improved significantly, with $6.2 million used versus $33.5 million used in Q1 2025.

Outlook and guidance

• April sales were modestly lower year-over-year; maintaining strict cost discipline and active inventory management.

• Long-term strategy remains focused on AI, supply chain flexibility, and disciplined capital allocation to drive sustainable growth.

• Gross margin expected to remain above 20%, with some quarter-to-quarter variability; margin rebounded into the 21% range in April.

• AI-driven margin improvements anticipated to materialize further into 2027.

• Long-term demand supported by housing undersupply, demographics, and aging housing stock; double-digit ROIC targeted.