BuildDirect Reports First Quarter 2022 Financial Results
Q1 2022 revenues of $24.4 million, up 16.8% year-over-year
Delivers break even adjusted EBITDA of $0.1 million
Pro customer revenue increases to 76.6% of first quarter revenues, up 14.7% quarter-over-quarter
BuildDirect reports in US dollars and in accordance with IFRS
VANCOUVER, BC, May 30, 2022 /PRNewswire/ - BuildDirect.com Technologies Inc. (TSXV: BILD) ("BuildDirect" or the "Company") a growing omnichannel building material retailer, today announced its financial results for the First Quarter 2022 ("Q1 2022").
"I am pleased to report that BuildDirect achieved the Q1 2022 guidance we outlined at the previous quarter," said David Lazar, interim CEO of BuildDirect. "Our strategic execution is delivering value with revenues reaching $24.4 million, growing by 1.6% quarter-over quarter, of which 76.6% are Pro-based. We also reached break even adjusted EBITDA, largely due to our push to reallocate resources to Pro and drive acquisition synergies. Looking forward to the second quarter, we will continue to focus our efforts on growing Pro customer market share to maximize value."
USD$ (unless otherwise noted) |
Q1 2022 |
Q4 2021 |
% Change |
Q1 2021 |
Revenue |
$24.4 million |
$24.0 million |
1.6% |
$20.9 million |
Gross Profit |
$8.7 million |
$7.6 million |
15.4% |
$7.4 million |
Gross Margin |
35.8% |
31.5% |
4.3% |
35.4% |
Adjusted EBITDA1 |
$0.1 million |
($3.2) million |
101.5% |
($0.1) million |
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. |
- Q1 2022 revenues reaching $24.4 million, increasing 1.6% quarter-over-quarter and 16.8% year-over-year.
- Q1 2022 Pro revenue reached $18.7 million, representing 76.6% of total revenue at the quarter end. Pro revenues grew 14.7% quarter-over-quarter due to increased strategic focus on driving Pro market share.
- Gross profit at $8.7 million in Q1 2022, an increase of 15.4% over the previous quarter, and 18.1% year-over-year
- Gross margin in Q1 2022 increased by 430bps to 35.8% compared to Q4 2021. The positive impact of price increases on margins was slightly offset due to lower margins from the Superb acquisition.
- Adjusted EBITDA in Q1 2022 reached $0.1 million. BuildDirect achieved break even adjusted EBITDA primarily by reallocating resources to the Pro market.
- In February 2022, the Company closed 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.
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 leverage our heavyweight omnichannel business model to drive Pro market share. Moving forward into the remainder of 2022, we expect to maintain positive adjusted EBITDA as Pro customer sector trends look set to continue."
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 the unaudited condensed interim consolidated financial statements and accompanying notes and the Management's Discussion and Analysis for the three months ended March 31, 2022 are available on the Company's website at www.BuildDirect.com. and on the Company's SEDAR profile available at www.sedar.com.
BuildDirect will host a conference call and webcast to discuss the Company's financial results at 9:30 am EST on Monday, May 30, 2022. To access the telephonic version of the conference call, participants can dial (888) 664-6392 (North America Toll-Free) or (416) 764-8659. Upon entering the confirmation ID: 23177864, participants will be entered directly into the conference.
Alternatively, the webcast will be available live on the Investor Relations section of BuildDirect's website at https://ir.builddirect.com/events-and-presentation
Among other things, BuildDirect will discuss long-term financial outlook on the conference call and webcast, and related materials will be made available on the Company's website at https://ir.builddirect.com/events-and-presentation. Investors should carefully review the factors, assumptions, risks and uncertainties included in such related materials concerning such long-term financial outlook.
An audio replay of the call will be available approximately two hours after the completion of the live call until 8:59 pm EST on June 6, 2022. The audio replay will be accessed by dialing (888) 390-0541 (North America Toll-Free) or (416) 764-8677 (Toronto) with entry code: 177864. In addition, an archived webcast will be available on the Investor Relations section of the Company's website at https://ir.builddirect.com/events-and-presentation.
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.
This press release contains statements which constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"), including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions. These statements reflect management's current beliefs and expectations and are based on information currently available to management as at the date hereof.
Forward-looking statements in this press release may include, without limitation, statements relating to Pro customer sector trends, BuildDirect's investment in the Pro market and growth of Pro customer market share, the impact of price increases and resource reallocation, financial and operational synergies from BuildDirect's acquisitions, BuildDirect's heavyweight omnichannel business model and the maintenance of positive adjusted EBITDA.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. Among those factors are changes in consumer spending, inflation, availability of mortgage financing and consumer credit, changes in the housing market, changes in trade policies, tariffs or other applicable laws and regulations both locally and in foreign jurisdictions, availability and cost of goods from suppliers, fuel prices and other energy costs, interest rate and currency fluctuations, retention of key personnel and changes in general economic, business and political conditions and other factors referenced under the "Risks and Uncertainties" section of our MD&A. These forward-looking statements may be affected by risks and uncertainties in the business of the Company and general market conditions, including COVID-19.
These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release reflect the Company's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and BuildDirect assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
Reference is made in this press release to the following non-GAAP measures: Adjusted EBITDA. These non-GAAP measures are commonly used by investors and other interested parties to evaluate our financial performance and are employed by the Company to measure its operating and economic performance and to assist in business decision-making. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. These measures are provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS. Refer also to appendix tables, "First Quarter 2022 Financial Highlights" and "Q1 2022 Highlights" of this press release as well as our Management's Discussion and Analysis for definitions and reconciliations of non-IFRS measures to the nearest IFRS measures.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
We define EBITDA as net income or loss before interest, income taxes and amortization. Adjusted EBITDA removes fair value adjustment of convertible debt and warrants, fair value adjustment of inventory, restructuring expenses, non-recurring bad debt expense, foreign exchange gains and losses, and share-based compensation items from EBITDA. We are presenting these measures because we believe that our current and potential investors, and many analysts, use them to assess our current and future operating results and to make investment decisions. Management uses these measures in managing the business and making decisions. EBITDA and adjusted EBITDA are not intended as substitutes for IFRS measures.
For the three months ended March 31 |
|||
Adjusted EBITDA |
2022 |
2021 |
|
Gain (Loss for the period) |
(1,721,808) |
(4,657,332) |
|
Income tax expense |
212,575 |
342,202 |
|
Depreciation and amortization |
1,007,550 |
1,193,538 |
|
Interest |
420,690 |
778,099 |
|
EBITDA |
(80,993) |
(2,343,494) |
|
EBITDA adjustments |
|||
Stock-based compensation |
97,635 |
99,256 |
|
Foreign exchange (gain)/loss |
577,714 |
39,524 |
|
Foreign currency translation differences |
- |
- |
|
Fair value adjustment of convertible debt and warrants |
(683,982) |
1,330,376 |
|
Impact of fair value adjustment of Inventory in acquisition1 |
137,400 |
528,552 |
|
Significant bad debt expense2 |
- |
257,891 |
|
Adjusted EBITDA |
47,774 |
(87,896) |
|
Adjusted EBITDA % |
- |
(5%) |
|
1The adjustment for the impact of the fair value of FloorSource & Superb inventory relates to the impact on normal selling profit from the fact that IFRS requires that the inventory be recorded at fair value on acquisition and not at FloorSource and Superb's historical cost. Earnings are impacted as this inventory was sold in the period. |
2The adjustment is a non-recurring activity, relating to a provision for an advance made to a former employee, which was deemed uncollectible in 2021. |
Condensed Consolidated Interim Statement of Financial Position |
||
(Expressed in United States dollars) |
||
March 31, 2022 and December 31, 2021 |
||
March 31, |
December 31, |
|
2022 |
2021 |
|
Assets |
||
Current assets: |
||
Cash and cash equivalents |
$ 5,072,469 |
$ 1,716,986 |
Short-term investments |
118,000 |
118,000 |
Trade and other receivables (note 4) |
3,954,675 |
4,420,994 |
Advances to vendors |
1,387,976 |
1,979,061 |
Inventories (note 5) |
7,481,007 |
7,452,570 |
Prepaid materials, expenses and deposits |
992,179 |
424,137 |
Total current assets |
19,006,306 |
16,111,748 |
Non-current assets: |
||
Property and equipment (note 6) |
590,181 |
599,232 |
Intangible assets (note 7) |
11,937,446 |
12,650,528 |
Right-of-use assets (note 8) |
4,446,569 |
4,305,647 |
Non-current advances to vendors |
567,420 |
1,141,805 |
Goodwill |
4,280,165 |
4,280,165 |
Deferred tax asset (note 18) |
364,329 |
364,329 |
Total Assets |
$ 41,192,416 |
$ 39,453,454 |
Liabilities and Shareholders' Equity (Deficiency) |
||
Current liabilities: |
||
Accounts payable and accrued liabilities (note 9) |
$ 9,349,164 |
$ 7,619,937 |
Current portion of lease liabilities (note 10) |
1,370,097 |
1,286,775 |
Deferred revenue (note 11) |
2,191,420 |
2,460,498 |
Current portion of promissory note (note 14) |
1,023,106 |
1,021,161 |
Current portion of deferred consideration payable |
1,851,331 |
2,484,571 |
Loan payable (note 12) |
6,963,831 |
3,828,971 |
Income taxes payable (note 18) |
947,994 |
735,420 |
Total current liabilities |
23,696,943 |
19,437,333 |
Non-current liabilities |
||
Deferred consideration payable |
581,917 |
553,732 |
Lease liabilities (note 10) |
3,950,060 |
3,929,806 |
Warrants (note 13) |
139,108 |
823,090 |
Promissory note (note 14) |
3,125,368 |
3,386,300 |
Shareholders' equity (deficiency): |
||
Share capital (note 15) |
119,075,245 |
119,075,245 |
Share-based payment reserve (note 15) |
10,952,603 |
10,854,968 |
Deficit |
(120,328,828) |
(118,607,020) |
9,699,020 |
11,323,193 |
|
Total Liabilities and Equity |
$ 41,192,416 |
$ 39,453,454 |
Condensed Consolidated Interim Statement of Operations and Comprehensive Loss |
||
(Unaudited) |
||
(Expressed in United States dollars) |
||
For the three months ended March 31, 2022 and 2021 |
||
March 31, 2022 |
March 31, 2021 |
|
Revenue |
$ 24,396,076 |
$ 20,887,037 |
Cost of goods sold |
15,671,680 |
13,502,232 |
Gross Profit |
8,724,396 |
7,384,805 |
Operating expenses: |
||
Fulfillment costs |
2,146,838 |
2,110,000 |
Selling and marketing |
2,319,546 |
2,726,290 |
Administration |
4,034,351 |
3,271,263 |
Research and development |
467,393 |
308,372 |
Depreciation and amortization |
1,007,550 |
1,193,537 |
9,975,678 |
9,609,462 |
|
Loss from operations |
(1,251,282) |
(2,224,657) |
Other income (expense): |
||
Interest income |
15,263 |
21,502 |
Interest expense and other transaction costs |
(435,953) |
(799,600) |
Fair value adjustment of convertible |
||
debt and warrant |
683,982 |
(1,330,376) |
Rental income |
56,471 |
57,526 |
Foreign exchange loss |
(577,714) |
(39,525) |
(257,951) |
(2,090,473) |
|
Loss before income taxes |
(1,509,233) |
(4,315,130) |
Income tax expense |
212,575 |
342,202 |
Total loss and comprehensive loss for the period |
$ (1,721,808) |
$ (4,637,332) |
Loss per share |
||
Basic and diluted loss per share (note 22) |
$ (0.06) |
$ (0.21) |
Condensed Consolidated Interim Statement of Cash Flows |
||
(Unaudited) |
||
(Expressed in United States dollars) |
||
For the three months ended March 31, 2022 and 2021 |
||
March 31, 2022 |
March 31, 2021 |
|
Cash provided by (used in): |
||
Operating activities: |
||
Loss for the period |
$ (1,721,808) |
$ (4,657,332) |
Add (deduct) items not affecting cash: |
||
Depreciation and amortization |
1,007,550 |
1,193,536 |
Income tax expense |
212,574 |
342,202 |
Stock-based compensation expense |
97,635 |
99,256 |
Interest paid on leases |
76,565 |
109,615 |
Other interest and finance cost |
359,388 |
689,985 |
Interest earned on lease receivables |
(15,263) |
(21,502) |
Fair value adjustment on convertible debt and warrants |
(683,982) |
1,330,376 |
Unrealized foreign exchange |
89,890 |
47,602 |
(577,451) |
(866,262) |
|
Changes in non-cash operating working capital: |
||
Trade and other receivables |
407,350 |
(22,620) |
Inventories |
(28,437) |
(321,512) |
Prepaid materials, expenses and deposits |
(568,042) |
(253,699) |
Advances to vendors |
1,165,470 |
280,777 |
Accounts payable and accrued liabilities |
1,729,227 |
478,687 |
Deferred revenue |
(269,078) |
1,357,026 |
Total operating activities |
1,859,039 |
652,397 |
Investing activities: |
||
Purchase of property and equipment |
(3,011) |
(3,520) |
Principal received on lease receivables |
58,969 |
53,912 |
Total investing activities |
55,958 |
50,392 |
Financing activities: |
||
Principal lease payments |
(319,752) |
(281,483) |
Interest paid |
(253,512) |
(535,690) |
Promissory note repayment |
(311,250) |
- |
Deferred consideration repayment |
(675,000) |
- |
Loan proceeds |
3,000,000 |
- |
Loan repayment |
- |
(114,382) |
Total financing activities |
1,440,486 |
(931,555) |
Increase (decrease) in cash and cash equivalents |
3,355,483 |
(228,766) |
Cash and cash equivalents, beginning of period |
1,716,986 |
5,416,511 |
Cash and cash equivalents, end of period |
$ 5,072,469 |
$ 5,187,745 |
SOURCE BuildDirect.com Technologies Inc.
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