BuildDirect Reports Second Quarter 2023 Financial Results

• Delivered adjusted EBITDA of $1.06 million for Q2 2023; the Company has delivered six consecutive quarters of positive adjusted EBITDA.
• Delivered gross margins of 39.7% for Q2 2023, an increase of 470 bps year-over-year and 50 bps quarter-over-quarter.
• Pro revenue reaches $17.4 million for Q2 2023, which represents 88.8% of the Company’s total revenue during the second quarter of 2023, an increase of 6.3% year-over-year.
• Company to host Second Quarter 2023 earnings conference call on Tuesday, August 29, 2023, at 10:00 AM (PDT) / 1:00 PM (EDT).

BuildDirect reports in US dollars and in accordance with IFRS.

BuildDirect.com Technologies Inc. (TSXV: BILD) (“BuildDirect” or the “Company”) a leading omnichannel building material retailer, today announced its financial results for the Second Quarter 2023 (“Q2 2023”).

“During Q2 2023, BuildDirect continued to produce strong financial results, as highlighted by our sixth consecutive quarter of positive adjusted EBITDA, which increased to $1.06 million for the three months ended June 30, 2023,” said Shawn Wilson, CEO of BuildDirect.

“As part of our growth strategy, we continue to expand our e-commerce platform and scale our brick-and-mortar operations with a focus on serving Pro customers,” continued Shawn Wilson. “With the goal of driving profitability, we aim to maximize cost efficiencies by implementing additional operational initiatives, including insourcing our fulfillment operations in other locations and integrating our technology infrastructure across all business units while minimizing disruption to productivity.”

Second Quarter 2023 Financial Highlights

	Q2 2023	Q1 2023	% Change (Q2 2023 & Q1 2023)	Q2 2022	%Change (Q2 2023 & Q2 2022)
Revenue	$19.1 million	$17.8 million	7.1%	$24.1 million	(20.6)%
Gross Profit	$7.6 million	$7.0 million	8.3%	$8.4 million	(10.1)%
Gross Margin	39.7%	39.2%	50 bps	35.0%	470 bps
Adjusted EBITDA1	$1.06 million	$1.04 million	2.1%	$0.62 million	72.0%

 ¹Adjusted EBITDA is a non-IFRS measure. See “Non-IFRS Measures” in the MD&A and the reconciliation to the most directly comparable IFRS measure below. 

• Total revenue was $19.1 million for Q2 2023, a decrease of 20.6% year-over-year and an increase of 7.1% quarter-over-quarter. The decrease in revenue year-over-year is primarily driven by BuildDirect’s e-commerce business. Historically, BuildDirect’s e-commerce business has produced negative EBITDA, which was offset by strong positive EBITDA from its independent retailer businesses. In Q2 2022, BuildDirect scaled-back its e-commerce business and began implementing efficiency initiatives to improve the profitability of the e-commerce model. The increase in revenue quarter-over-quarter is due to E-Commerce beginning to scale back up. At this point, BuildDirect believes it is close to completing its efficiency initiatives and will soon be ready to grow its e-commerce business more aggressively.
• Gross margin was 39.7% for Q2 2023, an increase of 470 bps year-over-year and 50 bps quarter-over-quarter. The increase in gross margin is mostly the result of significant improvements BuildDirect made in the business including operational efficiency initiatives for the e-commerce operations.
• Pro revenue was $17.4 million for Q2 2023, which represents 88.8% of the Company’s total revenue during the second quarter of 2023, an increase of 6.3% year-over-year. The increase in Pro revenue was driven by an overall shift in strategy to focus on the more profitable Pro customer base.
• Adjusted EBITDA was $1.06 million for Q2 2023, an increase of approximately $0.44 million year-over-year. The increase is largely attributed to the Company’s focus on profitability and running efficient operations.
• Cash flow from operations was $1.7 million in the first six months of 2023 as compared to -$2.0 million in the prior year comparable, an increase of $3.7 million year-over-year.
• Loan payable and promissory note repayments totaling $0.5 million were made in Q2 2023. Net External Debt decreased by $0.9 million as of June 30, 2023 as compared December 31, 2022.

Second Quarter 2023 Operational Highlights

• On April 3, 2023, BuildDirect announced that it appointed Jay Allen as General Manager. Mr. Allen has 25 years of experience in building e-commerce and digital divisions across fashion, home goods and flooring and consumables companies such as Starbucks, Lowe’s and STAINMASTER.
• On May 23, 2023, BuildDirect announced that it granted an aggregate of 2,850,000 stock options to 5 officers and 9 employee of the Company and its subsidiaries in accordance with the Company’s Omnibus Equity Incentive Plan
• On June 14, 2023, BuildDirect announced that it completed a project to consolidate BuildDirect’s third-party warehouse operations in the Northeastern United States and will insource those operations through a wholly-owned location in Michigan. This project aims to unlock inventory synergies between BuildDirect’s e-commerce and independent retailer businesses and lower fulfillment costs for the Company’s e-commerce operations.

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 unaudited condensed interim consolidated financial statements and accompanying notes and the Management’s Discussion and Analysis for the three and six months ended June 30, 2023 and June 30, 2022, are available on the Company’s website at www.BuildDirect.com and on the Company’s SEDAR profile available at www.sedar.com.

For the complete press release, click here.

About BuildDirect

BuildDirect (TSXV: BILD) is a growing omnichannel building material retailer. BuildDirect connects North American home improvement B2B and B2C organizations, and homeowners with quality building materials and services through its robust global supply chain network. BuildDirect’s growth trajectory, strong product offering, and proprietary heavyweight delivery network are delivering value today, solidifying its position as an innovative player in the home improvement industry. For more information, visit www.BuildDirect.com.

Source: BuildDirect.com Technologies Inc.