DBM: Pickets and patience

Research evidence excerpt

DBM: Pickets and patience

osed Prev. 773.6E 916.7E 866.9E

with Q425 results), with management pointing to efficiency gains at its EBITDA

existing mills as key drivers of incremental production capacity. Pricing for 2025 70.0A 80.0A 62.0A 44.3A

fencing products is negotiated and not linked to Random Lengths-reported 2026 68.1A 77.0E 67.7E 56.4E Prev. 58.8E 68.5E

pricing.

All values in CAD unless otherwise noted.

Strong margin performance helped by opportunistic sourcing. Priced as of prior trading day's market close, EST (unless otherwise noted).

Management pointed to "astute buying" as a key driver of margin

performance in the quarter, noting that the company took advantage of

low lumber pricing in the fall and executed well with favorably priced

material on the ground as the market picked up in Q126, driving a

17.0% gross margin (above the 14-16% range Doman typically targets).

Management also noted that despite SYP prices stepping significantly

lower, the company is holding its margins "not too bad."

Higher fuel costs seem manageable. Management noted that it expects

fuel costs to remain elevated given the ongoing conflict with Iran, and that

the company is attempting to pass on higher costs to customers in the

form of fuel surcharges. Doman acknowledged that it cannot always fully

offset elevated fuel prices through surcharges, although it is targeting an

approximate break-even on incremental fuel costs and working to push

these costs through over time.

Sticking to its M&A playbook. After prioritizing debt reduction and

integration post the acquisition of Tucker Lumber in Q424, management

reiterated its readiness for incremental M&A as it looks to fill in the white

space on the map. The company stated it will continue to be patient and not