BuildDirect Reports Second Quarter 2021 Financial Results

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BuildDirect Reports Second Quarter 2021 Financial Results

Canada NewsWire

Revenue of $23 million, with year-over-year recurring revenue growth of 368%
Successfully completed RTO raising CAD$20.5 million to support growth strategy

BuildDirect reports in US dollars and in accordance with IFRS

VANCOUVER, BC, Aug. 23, 2021 /CNW/ - BuildDirect.com Technologies Inc. (TSXV: BILD) ("BuildDirect" or the "Company"), an innovative platform for purchasing and selling building materials online, today announced its financial results for the three and six months ended June 30, 2021.

"The home renovation industry is at a key inflection point with rising demand for building materials continuing unabated," said Dan Park, CEO of BuildDirect. "Our reverse takeover, raising C$20.5 million will be invested to enhance our differentiated omni-channel offering and infrastructure, as well as our robust pipeline of acquisition opportunities, to accelerate our growth. Our second quarter results highlight the strength of our business as we continue the positive momentum supported by our progress of capturing recurring revenue from our pro customers."

Dan Park, continued, "we remain focused on realizing BuildDirect's vision to transform and simplify the home renovation industry. With a large and growing total addressable market of $71 billion1 in the US flooring market ripe for consolidation, we are confident that BuildDirect will capture an increasing share of the underserved Professional market to become a ground-breaking player in the home improvement industry."

"We are confident that our distinct DiPhy (digital + physical) strategy, robust technology, heavyweight delivery platform, and end-to-end flooring portfolio positions BuildDirect to drive significant value for all our stakeholders."

Second Quarter 2021 Financial Highlights

USD$ (unless otherwise noted)

Second Quarter 2021

Second Quarter 2020

% Change

Revenue

$23.4 million

$13.1 million

79%

Gross Profit

$8.8 million

$5.2 million

70%

Gross Margin

37.4%

39.3%

-5%

Adjusted EBITDA2

($0.07 million)

($0.16 million)

54%


1 Source: Floor Covering Weekly; Vol 69 No 16; July 27, 2020.

2Adjusted 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.

Second Quarter 2021 Financial and Operational Highlights

  • Revenue of $23.4 million increased 79% compared to the second quarter of 2020, primarily driven by the December 31, 2020 acquisition of FloorSource, and an increase in customer demand for building supplies.
  • Recurring revenue as a percentage of total revenue increased significantly by 368% to 51%.  
  • Gross profit increased 70% to $8.8 million compared to $5.2 million in the second quarter of 2020. 
  • Gross margin decreased by 5.0% to 37.4% compared to the second quarter of 2020 due to slightly lower gross margin percentages from the FloorSource business and higher supply chain costs in 2021 compared to 2020.
  • Adjusted EBITDA of ($0.07 million) improved 54% compared to the second quarter of 2020, primarily due to the incremental contribution from the acquisition of FloorSource.

Highlights Subsequent to the Second Quarter

  • Completed a successful RTO of VLCTY Capital Inc. on August 13, 2021. Concurrent with the RTO, BuildDirect raised total gross proceeds of C$20.5 million through a private placement of 3,487,000 subscription receipts at an issue price of C$5.75 per subscription receipt. Additionally, BuildDirect completed a non-brokered private placement offering of equity units at an issue price of C$5.75 per unit for gross process of C$0.5 million.
  • BuildDirect began trading on the TSX Venture Exchange on August 18, 2021 under the ticker symbol "BILD".

2021 Outlook
BuildDirect's business performance accelerated over the past year, as a result of significant growth in the home improvement products industry driven by a shift towards investment in the home, which has driven record breaking online growth in building material purchases. Driving this growth forward, BuildDirect intends to continue expanding gross margin through further alignment of unit economics and profitability in addition to enhancing revenue through its omnichannel platform.  In 2021, BuildDirect anticipates revenue in the range of $90 - $98 million, representing significant year-over-year growth"

BuildDirect believes its best days are still ahead as the Company leverages its DiPhy (digital + physical) growth strategy and expands its reach into bricks and mortar independent retailers and captures the B2B professionals.  The above guidance does not include additional acquisitions, however BuildDirect maintains a strong funnel of actionable acquisition targets that fit within its well-defined investment criteria.  

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 Management's Discussion and Analysis for the three and six months ended June 30, 2021 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 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.

Forward-Looking Information:
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 the potential demand for building materials, potential growth, potential share of the US flooring market, potential value for all stakeholders, expected growth margins, and expected revenues for 2021, potential acquisitions.

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, 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 and changes in general economic, business and political conditions.  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.

Condensed Consolidated Interim Statement of Financial Position
(Unaudited)
(Expressed in United States dollars)



June 30,

December 31,


2021

2020

Assets






Current assets:



Cash and cash equivalents

$

4,978,958

$

5,416,511

Restricted cash (note 20)

15,107,291

-

Short-term investments

118,000

118,000

Trade and other receivables (note 3)

2,866,858

2,727,955

Advances to vendors

1,351,065

391,641

Inventories (note 4)

5,841,258

5,446,940

Prepaid materials, expenses and deposits

844,807

994,597

Total current assets

31,108,237

15,095,644

Non-current assets:



Property and equipment (note 5)

536,015

835,921

Intangible assets (note 6)

10,188,990

11,326,135

Right-of-use assets (note 7)

3,586,595

900,834

Non-current advances to vendors

567,480

567,284




Total Assets      

$

45,987,317

$

28,725,818


Liabilities and Shareholders' Equity (Deficiency)




Current liabilities:



Accounts payable and accrued liabilities (note 8)

$

8,722,827

$

6,834,980

Income taxes payable

809,506

-

Current portion of lease liabilities (note 9)

969,742

458,841

Deferred revenue

3,122,757

1,531,960

Loan payable (note 10)

3,916,709

3,927,113

Current portion of promissory note (note 12)

1,394,097

1,145,986

Current portion of deferred consideration payable

508,623

602,681

Subscription receipts obligation (note 20) 

16,177,384

-


35,621,645

14,501,561

Non-current liabilities



Deferred consideration payable

1,207,675

1,018,555

Lease liabilities (note 9)

3,626,065

1,476,044

Convertible notes (note 11)

16,530,308

12,120,679

Warrants (note 11)

2,490,321

480,321

Promissory note (note 12)

4,471,774

4,552,670


28,326,143

19,648,269

Shareholders' equity (deficiency):



Share capital

92,469,780

92,459,612

Share based payment reserve

11,449,567

10,395,737

Deficit

(121,879,818)

(108,279,361)


(17,960,471)

(5,424,012)

 Total Liabilities and Equity

$

45,987,317

$

28,725,818


Commitments and contingencies (note 16)

Subsequent events (note 20)

See accompanying notes to Condensed Consolidated Interim Financial Statements.

 

Condensed Consolidated Interim Statement of Operations and Comprehensive Loss
(Unaudited)
(Expressed in United States dollars)



For the three months ended June 30

For the six months ended June 30


2021

2020

2021

2020






Revenue (note 14)

$

23,407,028

$

13,095,742

$

44,294,065

$

22,239,389






Cost of goods sold (note 4)

14,653,267

7,939,334

28,155,499

13,503,559






Gross Profit

8,753,761

5,156,408

16,138,566

8,735,830






Operating expenses:





Fulfillment costs

2,370,310

2,430,478

4,480,310

3,986,481

Selling and marketing

2,664,954

1,967,048

5,391,244

3,472,710

Administration

4,270,977

1,627,940

7,542,240

3,318,140

Research and development

517,191

(397,550)

825,563

(87,218)

Depreciation and amortization

757,706

207,977

1,951,243

445,450


10,581,138

5,835,893

20,190,600

11,135,563






Loss from operations

(1,827,377)

(679,485)

(4,052,034)

(2,399,733)






Other income (expense):





Interest income

18,768

26,156

40,270

56,588

Interest expense

(502,257)

(196,289)

(1,301,857)

(407,369)

Finance costs (note 20)

(1,070,093)

-

(1,070,093)

-

Rental income

43,030

129,781

100,556

309,459

Fair value adjustment of convertible debt and warrants

(5,089,253)

-

(6,419,629)

-

Foreign exchange (loss)/gain

(48,639)

(217,991)

(88,164)

80,860

Gain on sublease

-

129,148

-

129,148


(6,648,444)

(129,195)

(8,738,917)

168,686






Loss before income taxes

(8,475,821)

(808,680)

(12,790,951)

(2,231,047)






Income tax expense

(467,304)

-

(809,506)

-






Total loss and comprehensive loss for the period

$

(8,943,125)

$

(808,680)

$

(13,600,457)

$

(2,231,047)






Deficit, beginning of period

$

(112,936,693)

$

(105,142,492)

$

(108,279,361)

$

(103,720,125)






Deficit, end of period

$

(121,879,818)

$

(105,951,172)

$

(121,879,818)

$

(105,951,172)






Loss per share (expressed in $ per share):





Basic loss per share

(0.07)

(0.01)

(0.11)

(0.02)

Diluted loss per share

(0.07)

(0.01)

(0.11)

(0.02)






See accompanying notes to Condensed Consolidated Interim Financial Statements.

 

Condensed Consolidated Interim Statement of Changes in Equity (Deficiency)
(Unaudited)
(Expressed in United States dollars)


For the six months ended June 30, 2021 and 2020



Series 1 AA

Series 2 AA 

Common shares

Share based

payment
reserve




Number

Amount

Number

Amount

Number

Amount

Deficit

Total

Balance – December 31, 2019

65,000,000

$

50,481,532

54,846,926

$

41,974,552

204

$

28

$

10,165,655

$

(103,720,125)

$

(1,098,358)

Loss and comprehensive loss

for the period

(2,231,047)

(2,231,047)

Share-based compensation
expense

115,041

115,041

Balance – June 30, 2020

65,000,000

$

50,481,532

54,846,926

$

41,974,552

204

$

28

$

10,280,696

$

(105,951,172)

$

(3,214,364)

Balance – December 31, 2020

65,000,000

$

50,481,532

44,642,845

$

34,165,332

10,229,285

$

7,812,748

$

10,395,737

$

(108,279,361)

$

(5,424,012)

Loss and comprehensive loss 
for the period

(13,600,457)

(13,600,457)

Share-based payment
expense


1,053,830

1,053,830

Balance – June 30, 2021

65,000,000

$

50,481,532

44,642,845

$

34,165,332

10,229,285

$

7,822,916

$

11,449,567

$

(121,879,818)

$

(17,960,471)

















See accompanying notes to Condensed Consolidated Interim Financial Statements.


 

Condensed Consolidated Interim Statement of Cash Flows
(Unaudited)
(Expressed in United States dollars)


For the three months ended June 30

For the six months ended June 30


2021

2020

2021

2020






Cash provided by (used in):










Operating activities:





Loss for the period before income taxes

$

(8,475,821)

$

(808,680)

$

(12,790,951)

$

(2,231,047)

Add (deduct) items not affecting cash:





Depreciation

757,706

207,977

1,951,243

445,450

Stock-based compensation expense

954,574

57,521

1,053,830

115,041

Other interest and finance cost

397,929

107,667

1,087,914

218,709

Interest on leases

104,328

88,622

213,943

188,660

Interest earned on lease receivables and other

(18,768)

(26,156)

(40,270)

(56,588)

Fair value adjustment on convertible debt and warrants         

5,089,253

-

6,419,629

-

Finance costs

1,070,093

-

1,070,093

-

Unrealized foreign exchange

56,377

137,853

103,978

(187,502)

Gain on lease modification

-

(129,148)

-

(129,148)


(64,329)

(364,344)

(930,591)

(1,636,425)






Changes in non-cash operating working capital:





Short-term investments

-

(83,000)

-

(83,000)

Trade and other receivables

(225,329)

(113,235)

(247,949)

(1,808)

Inventories

(72,806)

(445,130)

(394,318)

(493,601)

Prepaid materials, expenses and deposits

(96,511)

104,526

149,790

1,344,293

Advances to vendors

(505,799)

634,766

(959,620)

403,468

Accounts payable and accrued liabilities

1,174,562

850,449

1,887,847

763,760

Deferred revenue

233,770

724,674

1,590,797

1,266,237

Total operating activities

443,558

1,308,705

1,095,956

1,562,923






Investing activities:





Purchase of property and equipment

(25,129)

(2,662)

(28,649)

(6,836)

Principal received on lease receivables

55,134

50,405

109,046

99,693

Interest received

18,768

26,156

40,270

56,588

Total investing activities

48,773

73,899

120,667

149,445






Financing activities:





Subscription receipts proceeds

16,177,384

-

16,177,384

-

Restricted cash related to subscription receipts

(15,107,291)

-

(15,107,291)

-

Subscription receipts issuance costs

(1,070,093)

-

(1,070,093)

-

Common shares issued upon exercise of stock options

10,168

-

10,168

-

Principal lease payments

(228,899)

(177,131)

(510,382)

(363,848)

Interest paid

(482,388)

(196,289)

(1,259,177)

(407,369)

Loan repayment

-

-

105,215

-

Total financing activities

(701,119)

(373,420)

(1,654,176)

(771,217)






Increase/(Decrease) in cash and cash equivalents

(208,788)

1,009,185

(437,553)

941,152






Cash and cash equivalents, beginning of period

5,187,746

3,389,480

5,416,511

3,457,513






Cash and cash equivalents, end of period

$

4,978,958

$

4,398,665

$

4,978,958

$

4,398,665

See accompanying notes to Condensed Consolidated Interim Financial Statements.







For the three months ended June 30

For the six months ended June 30

Adjusted EBITDA

2021

2020

2021

2020






Loss for the period

$

(8,943,125)

$

(808,680)

$

(13,600,457)

$

(2,231,047)

Income tax expense

467,304

-

809,506

-

Depreciation and amortization

757,706

207,977

1,951,243

445,450

Interest

483,489

170,133

1,261,587

350,781

EBITDA

(7,234,626)

(430,570)

(9,578,121)

(1,434,816)






EBITDA adjustments





Stock-based compensation

$

954,574

$

57,520

$

1,053,830

$

115,041

Foreign exchange (gain)/loss

48,639

217,991

88,164

80,860

Fair value adjustment of  convertible debt and warrants

5,089,253

-

6,419,629

-

 

Impact of fair value adjustment of Inventory in FloorSource acquisition1



528,552

-

Significant bad debt expense2



257,891

-

Finance costs3

1,070,093

-

1,070,093

-






Adjusted EBITDA

(72,067)

(155,059)

(159,962)

(1,400,635)

Adjusted EBITDA %

0%

(1%)

(0%)

(6%)


1 The adjustment for the impact of the fair value of FloorSource 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's historical cost. Earnings are impacted as this inventory was sold in the period. 

2 The adjustment is a non-recurring activity, relating to a provision for an advance made to a former employee, which was deemed uncollectible in 2021.

3 The adjustment relates to agents' commission and certain expenses of the private placement offering totalling CDN $1,326,273.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/builddirect-reports-second-quarter-2021-financial-results-301360467.html

SOURCE BuildDirect.com Technologies Inc.

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2021/23/c4658.html

Copyright CNW Group 2021

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