BuildDirect Reports Second Quarter 2024 Financial Results

Delivered adjusted EBITDA of $0.6 million for Q2 2024; the Company has delivered 10 consecutive quarters of positive adjusted EBITDA

Delivered revenue and gross profit of $16.2 million and $6.2 million or 38.2%, respectively, in Q2 2024 vs $19.1 million and $7.6 million or 39.7%, respectively in Q2 2023; this represents a reduction in revenue and gross profit of $2.9 million and $1.4 million or 150 bps, respectively, year-over-year

Working capital increased $0.6 million to $2.9 million at June 30, 2024 from $2.3 million at March 31, 2024

BuildDirect.com Technologies Inc. (“BuildDirect” or the “Company”) a leading omnichannel building material retailer, announced its financial results for the Second Quarter Ended June 30, 2024 (“Q2 2024”).

“During Q2 2024, the Company reported an adjusted EBITDA of $0.6 million and continued to improve its operational economics,” said Shawn Wilson, CEO of BuildDirect. “We’re assembling a team and building operations with strong scalability potential, always keeping our growth strategies in focus,” he continued.

Shawn also noted, “The Company now operates six Pro Centers in addition to its e-commerce business and is strategically positioned to pursue expansion opportunities across North America with our omni-channel approach. Currently, our Pro Centers are present in only two of the top 50 markets in North America, underscoring substantial growth opportunities. Our business model is focused on careful execution, smart capital allocation, and the establishment of attractive unit economics. As we continue to advance, we are actively working on strategies to scale our Pro Center growth-both through developing organic locations and exploring strategic acquisition opportunities.”

Kerry Biggs, the new CFO of BuildDirect, added, “We are focused on ensuring that our financial strategies align with the company’s growth objectives. Whether through organic expansion or acquisitions, we are committed to smart capital allocation and pursuing opportunities for long-term value for our shareholders.”

Second Quarter 2024 Financial Highlights

Revenue and Gross Profit per Segment

The Company reports results in two segments: (1) BuildDirect and (2) Acquired Retailers (“Retailers”). We measure each reportable operating segment’s performance based on Revenue. Our BuildDirect segment comprises revenue through our BuildDirect e-commerce and brick and mortar operations. The Retailers segment comprises revenue of flooring building materials through our acquired brick and mortar locations and include installation services. The BuildDirect and Retailers segments contributed 20% and 80% of the Company’s revenue respectively in Q2 2024 compared to 31% and 69% of the Company’s revenue, respectively, in the three months ended June 30, 2023 “Q2 2023”. Likewise, the BuildDirect and Retailers segments contributed 22% and 78% of our sales respectively in the six months period ended June 30, 2024 “H1 2024” compared to 30% and 70% of our sales, respectively, in the six months ended June 30, 2023 “H1 2023”.

Overall, revenue in Q2 2024 was $16.2 million compared to $19.1 million in Q2 2023 for a decrease of $2.9 million or 15.3%.

Revenue in Q2 2024 for the BuildDirect segment was $3.3 million compared to $5.9 million for the same period in the prior year, a decrease of $2.6 million or 44.5%. The decrease can be attributed to the Company’s strategy to shift its e-commerce product mix to higher gross margin direct-sourced products and the timing around building stronger inventory levels to support the strategic shift.

Revenue in Q2 2024 for Retailers was $12.9 million compared to $13.2 million for the same period in the prior year for a decrease of $0.3 million or 2.3%. This decrease can be attributed to weaker housing remodeling and new construction activities, posited to be driven by higher mortgage interest rates.

Gross profit in Q2 2024 was $6.2 million compared to $7.6 million in Q2 2023 for a decrease of $1.4 million or 18.4%. The decrease can be attributed to the lower revenue noted earlier for the BuildDirect and Retailers segments. In addition, gross profit as a percentage of revenue decreased slightly from 39.7% in Q2 2023 to 38.2% in Q2 2024. The decrease was due mainly to gross profit as a percentage of revenue in the Retailers segment decreasing to 34.7% from 36.3% in Q2 2024 vs Q2 2023, respectively. Although, this decrease was offset by an increase in gross profit as a percentage of revenue in the BuildDirect segment in Q2 2024 vs Q2 2023 to 52.3% from 47.3%, respectively.

Subsequent events to Q2 2024

On July 3, 2024, the Company announced the appointment of Kerry Biggs as the Company’s new Chief Financial Officer and the corresponding resignation of Marshall Rosichuk as Interim-CFO effective July 22, 2024 and July 21, 2024 respectively.

Actual results may differ materially from the Company’s financial outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below. The Company’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, 2024 and June 30, 2023 are available on the Company’s website at www.BuildDirect.com and on the Company’s SEDAR+ profile available at www.sedarplus.ca.

For full second quarter results click here.

About BuildDirect

BuildDirect (TSXV: BILD “BuildDirect” or the “Company”) 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.