BuildDirect Reports Fourth Quarter and Year End 2021 Financial Results

BuildDirect.com Technologies Inc. (“BuildDirect” or the “Company”) a growing omnichannel building material retailer, today announced its financial results for the Q4 2021 (“Q4 2021”) and full-year audited financial results for the year ended December 31, 2021 (“Full Year 2021”).

“I am very proud of what we achieved in 2021.” said David Lazar, interim CEO of BuildDirect. “In addition to reaching $90.7 million of revenue for the year, we have integrated the FloorSource acquisition into our broader operations and closed the acquisition of Superb Flooring & Design. Our team’s dedication and ability to adapt quickly to market trends has helped us respond to challenges presented by COVID and global supply chain pressures. Looking forward, we continue to focus on the growing Pro customer market with its higher average basket recurring purchases.”

Q4 and Full Year 2021 Highlights

• Achieved Full Year 2021 revenue of $90.7 million driven by strategic acquisitions of FloorSource and Superb Flooring & Design, and increasing customer demand. Compared to the previous quarter, Q4 2021 revenue increased by 7.1% to $24.0 million.
• Full Year 2021 Pro revenue reached $57.1 million, representing 63% of total revenue at the year end and year-over-year growth of 210%, which was largely driven by acquisition.
• Gross profit decreased 6.2% to $7.6 million in Q4 2021 over the previous quarter, with Full Year 2021 gross profit reaching $31.8 million, an increase of 59% year-over-year. The improvement was driven by increased revenues and partially offset by higher than expected product costs.
• Gross margin in Q4 2021 decreased by 490bps to 31.5% compared to Q3 2021 due to higher product costs. Full Year 2021 gross margin reached 35.1%, and is expected to improve in 2022 as BuildDirect increases pricing to offset increased product cost.
• Adjusted EBITDA in Q4 2021 came to ($3.2 million), a 433% decrease from the previous quarter, and ($4.0 million) for the Full Year 2021. While this decrease is attributable to higher product, fulfilment, and marketing costs, adjusted EBITDA is expected to improve in Q1 2022 as we increase prices, and reduce fixed-costs and paid marketing attributable to homeowner customers.
• Continue to integrate the acquisition of FloorSource, and closed the acquisition of Superb Flooring & Design, which increased Pro revenues, brought installation and delivery services, expanded assortment, and improved product availability.
• Successfully completed a reverse takeover transaction to go public following $20.5 million private placement.
• Appointed experienced omnichannel retail executives, David Lazard as interim CEO, and Peg Hunter and Henry Lees-Buckley to the Board of Directors.

Post-Quarter Highlights

• On February 15, 2022, BuildDirect announced the closing of a secured debt financing pursuant to which it issued, via its wholly owned subsidiary BuildDirect Operations Limited, secured notes to Pelecanus Investments Ltd., Lyra Growth Partners Inc., and Beedie Investments Ltd. in an aggregated amount of US $3 million.
• On April 4, 2022, BuildDirect announced that it appointed Eyal Ofir to its Board of Directors, and that John Farlinger and Andrew Elbaz had stepped down from their roles as Directors of the Board.

2022 Outlook

The outlook for the home improvement sector remains optimistic, supported by a consistently strong North American housing and real estate market. Whilst the consistent and resilient demand for home improvement and construction is encouraging, broader macro uncertainty remains around the impact of inflation, supply chain pressures, and evolving customer habits.

Looking to 2022, BuildDirect’s growth strategy focuses primarily on expanding its foothold in the Pro customer market through four key strategic pillars:

1. Reallocation of resources to focus on serving the Pro customer
2. Drive synergies from acquired independent retailers
3. Leveraging heavy weight delivery capabilities to maximize customer service offering
4. Expanding Pro share of wallet through our omnichannel strategy

In addition to driving revenue growth, the Company is undertaking a number of key initiatives including shifting our focus more strongly towards Pro revenues, passing increased product costs on to the customer, and maximizing acquisition synergies to drive margin expansion with the goal of delivering profitability.

Ethan Rudin, CFO of BuildDirect said, “To execute on our strategy, we will continue to invest in the Pro market, extract financial and operational synergies from our acquisitions, and drive fixed-costs down. In Q1 2022, we are estimating revenues to be over $24 million and we’re estimating to achieve positive Adjusted EBITDA. In addition, our cash balance has improved from year-end 2021 and at the end of Q1 2022 our cash balance is estimated to be over $5 million.”

Actual results may differ materially from BuildDirect’s financial outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

BuildDirect’s audited consolidated financial statements for the years ended December 31, 2020 and December 31, 2021 and Management’s Discussion and Analysis for the three and twelve months ended December 31, 2020 and 2021 are available on the Company’s website at www.BuildDirect.com. and on the Company’s SEDAR profile available at www.sedar.com.

To view the complete press release, click here.

About BuildDirect

BuildDirect (TSXV: BILD) is an innovative technology platform for purchasing and selling building materials online. The BuildDirect platform connects homeowners and home improvement professionals in North America with suppliers and sellers of quality building materials from around the world, including flooring, tile, decking and more. BuildDirect’s growth, proprietary heavyweight delivery network, and digital reach have served to solidify its role as a ground-breaking-player in the home improvement industry. For more information, visit www.BuildDirect.com.

Source: BuildDirect.com Technologies Inc.