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eCommerce Company BuildDirect.com Technologies Reports Fourth Quarter and Full Year 2023 Financial Results
Wednesday, May 8, 2024Company Profile | Follow Company
Vancouver, BC, May 8, 2024--(T-Net)--BuildDirect.com Technologies Inc. (TSXV: BILD) a leading omnichannel building material retailer, today announced its financial results for the Fourth Quarter ("Q4 2023") and full-year audited financial results for the year ended December 31, 2023 ("FY 2023").
BuildDirect reports in US dollars and in accordance with IFRS.
Shawn Wilson, Chief Executive Officer, BuildDirect
"We announced Q4 2023 results, which further solidifies the progress the team has made with respect to profitability and strategic growth," said Shawn Wilson, CEO of BuildDirect. "Overall, BuildDirect achieved strong financial performance as highlighted by its adjusted EBITDA of $3.55 million for the FY 2023, for an increase of $2.27 million as compared to the previous fiscal year."
Q4 2023 and FY 2023 Highlights:
1. Revenue:
For the three months ended | % Change | For the three months ended December 31 | % Change | |||||||||||||||
In MM | Q4 2023 | Q3 2023 | vs Q3 2023 | 2023 | 2022 | vs 2022 | ||||||||||||
Revenue | $ | 16.9 | $ | 18.4 | -8.2% | $ | 16.9 | $ | 21.7 | -22.1% | ||||||||
For the year ended December 31 | % Change | |||||||||||||||||
In MM | 2023 | 2022 | vs 2022 | |||||||||||||||
Revenue | $ | 72.3 | $ | 92.2 | -21.6% |
Total revenue was $16.9 million for Q4 2023, a decrease of 8.2% and 22.1% sequentially quarter-over-quarter and year-over-year, respectively. Overall, total revenue for FY 2023 was $72.3 million, a decrease of 21.6% from prior year ended December 31, 2022 ("FY 2022") revenue of $92.2 million. The decrease follows from our strategy to temporarily scale down E-commerce operations to facilitate our platform migration and enhancements initiative. This initiative lowered systems operating costs and helped to create positive adjusted EBITDA results to-date.
2. Gross margin:
For the three months ended December 31 | % Change | For the year ended December 31 | % Change | |||||||||||||||
In MM | 2023 | 2022 | vs 2022 | 2023 | 2022 | vs 2022 | ||||||||||||
Gross margin | $ | 6.0 | $ | 7.9 | -24.1% | $ | 27.8 | $ | 32.0 | -13.1% | ||||||||
Gross margin % | 35.2% | 36.4% | -1.2% | 38.5% | 34.7% | 3.8% |
Gross margin was $6.0 million and $27.8 million for Q4 2023 and FY 2023, respectively, representing a decrease of 24.1% and 13.1% from Q4 FY 2022 and FY 2022, respectively. The decrease can be attributed to our strategy noted in Revenue above. Although, gross margin as a percentage of revenue increased to 38.5% from 34.7% in FY 2023 from FY 2022, respectively, for an increase of 380 bps year-over-year. This can be attributed to our strategy noted in Revenue above and the Company's continued focus on the more profitable Pro customer base.
3. Adjusted EBITDA*:
For the three months ended December 31 | % Change | For the year ended December 31 | % Change | |||||||||||||||
In MM | 2023 | 2022 | vs 2022 | 2023 | 2022 | vs 2022 | ||||||||||||
Adjusted EBITDA | $ | 0.073 | $ | 0.412 | -82.3% | $ | 3.551 | $ | 1.275 | 178.5% |
Adjusted EBITDA was $.073 million and $3.55 million for Q4 2023 and FY 2023, respectively, representing eight (8) consecutive quarters of positive adjusted EBITDA. This can largely be attributed to the temporary scale-down of our E-commerce business, improved gross margins and lower operating expenses.
*Adjusted EBITDA is a non-IFRS measure. See the "Non-IFRS Measures" section and the reconciliation therein.
In MM | As at December 31, | $ Change | |||||||||
Working capital: | 2023 | 2022 | vs 2022 | ||||||||
Total current assets | $ | 14.6 | $ | 17.0 | |||||||
Total current liabilities | $ | 11.8 | $ | 15.3 | |||||||
Total working capital | $ | 2.8 | $ | 1.7 | $ | 1.1 |
As at December 31, 2023, working capital was $2.8 million compared to $1.7 million as at December 31, 2022, for an increase of $1.1 million. This increase can largely be attributed to the increase in cash from operating activities.
**Working capital is a non-IFRS measure. It is calculated as noted above.
On September 28, 2023, the Company announced the amendment of secured notes issued by BuildDirect Operations Limited, a wholly owned subsidiary of the Company ("BuildDirect Operations") to:
(a) Deans Knight Capital Management Ltd. in its capacity as portfolio manager on behalf and for the benefit of two fully managed accounts in March 2018 (the "2018 Notes"); and
(b) Pelecanus Investments Ltd., Lyra Growth Partners Inc. and Beedie Investments Ltd. in June 2022 (the "2022 Notes").
2024 Outlook:
Currently, the Company says it remains focused on growth through the pursuit of strategic acquisitions of Pro and B2B-focused retailers. Post-acquisition, the Company aims to optimize operations and drive value through acquisitions by leveraging procurement and marketing synergies.
In addition, the company says it is also piloting organic growth strategies through which they seed target markets through initial E-commerce expansion, deploy local in-market sales teams to solidify their presence and then establish new Pro Centers in-market while transitioning to local E-commerce fulfillment and potentially expanding our product offerings and services.
As previously announced, the launch of the Company's Pro Center in Richmond, BC aims to serve as a blueprint for potential future BuildDirect Pro Centers across the US. By initiating with robust sales and localized service, these Pro Centers aim to enhance BuildDirect's engagement with professionals in each market.
As previously announced, the Company has also introduced value added service packages for Pro customers featuring customized E-commerce platforms, white-label branded flooring options, complimentary flooring samples, and tailored fulfillment services. These pilot initiatives open the path for BuildDirect to build a potential recurring revenue stream.
Further, 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, 2023 and December 31, 2022 and Management's Discussion and Analysis for the three and twelve months ended December 31, 2023 and 2022 are available on the Company's website at www.BuildDirect.com and on the Company's SEDAR profile available at www.sedar.com.
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.
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.
Forward-Looking Information
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