Doman Building Materials Group (TSE:DBM) executives told investors the company delivered strong full-year 2025 results despite continued construction-material price volatility and a challenging macro backdrop that included elevated interest and mortgage rates, uneven building activity by region, and ongoing tariff-driven disruption across the broader sector.
On the company’s fourth-quarter and full-year 2025 earnings call, Chairman and CEO Amar Doman said the business remained focused on controllable factors such as operational efficiency, customer service, cost discipline, and safety. While noting Doman is “not directly impacted by tariffs,” he said the industry is still navigating tariffs and fluctuating input prices. The company reported full-year Canadian revenues of CAD 3.1 billion, gross margin of CAD 505 million, adjusted EBITDA of CAD 256 million, and net earnings of CAD 80 million, while paying a quarterly dividend of CAD 0.14 per share (CAD 0.56 annualized).
Full-year results driven by acquisitions and margin execution
Code said the year’s sales mix was 81% construction materials (up from 76% in 2024), 16% specialty and allied products, and 3% other sources. Gross margin rose to CAD 505.5 million from CAD 424.8 million, an increase of CAD 80.7 million, which Code said reflected contributions from acquisitions and margin enhancement initiatives. Gross margin as a percentage of sales improved to 16.2% from 16.0% a year earlier.
Operating costs increased in dollar terms but improved as a percentage of sales. Total expenses were CAD 349.1 million versus CAD 306.5 million in 2024, but fell to 11.2% of sales from 11.5%.
- Distribution, selling, and administration (DS&A): Increased CAD 19.9 million (8.7%) to CAD 249.1 million, primarily tied to acquired businesses and inflationary pressures; DS&A was 8.0% of sales versus 8.6% in 2024.
- Depreciation and amortization: Increased CAD 22.8 million (29.5%) to CAD 100.0 million, reflecting additional assets and intangibles related to acquisitions.
- Finance costs: Increased to CAD 72.9 million from CAD 53.7 million, largely due to financing associated with the Doman Tucker Lumber acquisition completed Oct. 1, 2024.
EBITDA for 2025 increased to CAD 256.4 million from CAD 192.2 million, up CAD 64.2 million or 33.4%. Code noted the 2025 EBITDA benefited from a full year of results from the 2024 acquisitions, partially offset by weaker pricing in some construction materials categories and inflation-driven expense increases. Net earnings climbed to CAD 80.3 million from CAD 54.2 million.
Q4 performance and margin drivers
For the fourth quarter, Amar Doman highlighted revenue of CAD 644 million, gross margin of 16.6% (CAD 107.2 million), EBITDA of CAD 44.3 million, and net earnings of CAD 11 million. The company again declared a quarterly dividend of CAD 0.14 per share.
In the question-and-answer session, management pointed to two key contributors to recent margin strength: buying execution in lumber and freight optimization.
Doman credited the company’s lumber buyers for positioning inventories during market “dips” and navigating price gyrations. Code added that freight optimization strategies played “a significant role,” noting the company began using new technology in 2025 and is starting to see benefits in freight costs, which are a significant part of cost of goods sold. Code said the rollout remains in the “early innings,” as it has only been implemented in two divisions.
Costs, CapEx, and cash flow highlights
Asked about inflation in operating expenses, Code said cost inflation was broadly in line with the Consumer Price Index, with compensation and facility-related items (including leased facilities and equipment) as key components. He estimated inflation around 3% in 2025 and noted costs typically ramp in busier quarters, with Q4 being seasonally slower.
On capital expenditures, management said 2025 spending included investments in fencing-related equipment for sawmills, including expansion into the Carolinas. Code characterized Q4 as a “high-water mark” for spending due to timing and lumpiness, and said the company still expects cash spending on property, plant, and equipment to remain under 1% of revenue.
In cash flow, Code said operating activities before non-cash working capital generated CAD 163.6 million versus CAD 148.7 million in 2024, driven by higher net earnings. Financing activities consumed CAD 235.7 million, reflecting debt repayments and payments to equity holders. The company paid CAD 49 million in dividends in 2025, and Code noted lease payments were current and the company was not in breach of lending covenants during the year.
Investing activities generated CAD 45.6 million in 2025, compared with using CAD 474.3 million in 2024. Code said 2025 investing included CAD 75.2 million in proceeds from the sale of timberlands, while 2024 included cash consideration of CAD 460.8 million for the Southeast Forest Products and Doman Tucker acquisitions. The company invested CAD 29 million in property, plant, and equipment in 2025.
Outlook themes: cautious demand, fencing growth, and disciplined M&A
Management repeatedly emphasized caution in forecasting demand. Responding to an analyst question referencing repair-and-renovation commentary from large U.S. home improvement retailers, Amar Doman said the R&R market is likely to be “flat,” describing the environment as difficult to read. He said the company was “very pleased” with initial bookings and volumes in pressure-treated products heading into 2026, with the first two months booked, though he stopped short of expressing outsized optimism.
On the fencing business, Doman said fencing represents between 5% and 10% of the current product mix and is “rapidly growing.” He described the company as largely sold out of what it currently produces and pointed to demand strength related in part to tariffs affecting South American supply into key U.S. markets. He said Doman is working to ramp production and emphasized domestic production. Doman also said fencing is margin accretive because the company captures value from logs through manufactured, pressure-treated finished product, and said plant investments are aimed at driving efficiency through automation and lower labor intensity. He also said the company’s goal is to become the number one fence producer in the U.S. within the next two years.
On M&A, management said the company continues to look to fill “white spaces” on its geographic map and remains disciplined on valuation multiples. Doman said seller expectations have not shifted dramatically, and the company will not go outside its targeted multiple range.
Finally, the company noted a leadership transition: Code, who has served as CFO for 15 years, will retire on April 7.
About Doman Building Materials Group (TSE:DBM)
Doman Building Materials Group Ltd is a wholesale distributor of building materials and home renovation products. The company services the new home construction, home renovation and industrial markets by supplying the retail and wholesale lumber and building materials industry, hardware stores, industrial and furniture manufacturers and similar concerns. Its operations also include timber ownership and management of private timberlands and forest licenses, and agricultural post-peeling and pressure treating through CanWel Fibre Corp.
