BuildDirect Reports Third Quarter 2023 Financial Results

November 21, 2023 8:00 AM EST | Source: Technologies, Inc.

  • Delivered adjusted EBITDA of $1.37 million for Q3 2023; the Company has delivered seven consecutive quarters of positive adjusted EBITDA.
  • Delivered gross margins of 39.8% for Q3 2023, an increase of 840 bps year-over-year and 10 bps quarter-over-quarter.
  • Working capital increased by $7.1 million quarter-over-quarter to a positive $2.6 million in Q3 2023.
  • Company to host Third Quarter 2023 earnings conference call on Tuesday, November 21, 2023, at 10:00 AM (PST) / 1:00 PM (EST).

BuildDirect reports in US dollars and in accordance with IFRS. All references to dollars herein are in United States dollars ($) unless otherwise specified.

Vancouver, British Columbia--(Newsfile Corp. - November 21, 2023) - Technologies Inc. (TSXV: BILD) ("BuildDirect" or the "Company") a leading omnichannel building material retailer, today announced its financial results for the Third Quarter of 2023 ("Q3 2023").

"During Q3 2023, BuildDirect reported an adjusted EBITDA of $1.37 million and continued to improve its profitability," said Shawn Wilson, CEO of BuildDirect. "Our growth strategy remains focused on increasing the number of brick-and-mortar Pro-Centers, throughout North America (referred to as independent retailers in our financials) and accelerating our E-Commerce business."

Shawn added, "The Company currently has five Pro Centers located in Michigan which generate approximately $55 million in revenue on an annualized basis (combined). As previously announced, the Company also recently launched a Pro Center in Richmond, British Columbia. Of the Top 50 Markets in North America, we currently have Pro-Centers in only two - leaving potentially significant opportunities for growth. By establishing a sizable physical and digital footprint, we will be well-positioned to increase our share of the over $70 billion North American. flooring market. As a reminder, our Pro-Centers operate together with our E-Commerce business. We import products from manufacturers across the globe into our Pro-Centers. From there we sell those products and services to local Pros and also leverage the Pro-Centers to fulfill our E-Commerce orders."

"As we pursue the growth of our Pro-Center footprint we anticipate that our E-Commerce business becomes even more competitive," continued Shawn. "During Q3 2023, BuildDirect successfully completed a migration and enhancements to its e-commerce platform. The changes have allowed the Company to lower its overall fixed costs associated with the e-commerce business the impact of which cost reductions we anticipate will become more evident in the Company's Q4 2023 and into 2024. More importantly, the enhancements will allow the team to re-focus its energy on profitable growth initiatives within the e-commerce division going forward."

Third Quarter 2023 Financial Results Conference Call

BuildDirect will host a conference call to discuss the Company's financial results.

Time: 10:00 AM (PST) / 1:00 PM (EST)
Date: Tuesday, November 21, 2023

The replay will be available approximately 24 hours after the completion of the conference call. In addition, an archived replay will be available on the Investor Relations section of the Company's website at

Among other things, BuildDirect will discuss the long-term financial outlook on the conference call and related materials will be available on the Company's website at Investors should carefully review the factors, assumptions, risks, and uncertainties included in such related materials concerning such as the long-term financial outlook.

Third Quarter 2023 Financial Highlights

Q3 2023Q2 2023

% Change 
(Q3 2023 & Q2 2023)

Q3 2022

(Q3 2023 & Q3 2022)


Revenue$18.4 million$19.1 million(3.6)%$22.0 million(16.3)%
Gross Profit$7.3 million$7.6 million(3.4)%$6.9 million5.8%
Gross Margin 39.8%39.7%10 bps31.4%840 bps
Adjusted EBITDA1$1.37 million$1.06 million28.8%$0.29 million365.4%


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 $18.4 million for Q3 2023, a decrease of 16.3% and 3.6%, year-over-year and quarter-over-quarter, respectively. The decrease in revenues is a result of a temporary scale down of the Company's e-commerce operations in 2022 to facilitate its platform migration and enhancements initiative which lowered its systems operating costs and helped create consistent positive adjusted EBITDA results to date.
  • Gross margin was 39.8% for Q3 2023, an increase of 840 bps year-over-year and 10 bps quarter-over-quarter. The increase in gross margin percentage can be attributed to the improvements to BuildDirect's e-commerce product margin with a shift in pricing strategy from "everyday low prices" to a "high-low pricing" strategy, improvements to the Company's independent retailer product margin as we source more product directly through BuildDirect's direct to manufacturer procurement model, and the reduction in inbound freight costs.
  • Pro revenue was $16.6 million for Q3 2023, which represents 91.6% of the Company's total revenue during the third quarter of 2023, an increase in the share of revenue of 3.5% year-over-year. The increase in the percentage of Pro Revenue is a result of the Company temporarily scaling down its e-commerce operations, which operations generate some of its revenues from Homeowner.
  • Adjusted EBITDA was $1.37 million for Q3 2023, an increase of approximately $1.08 million (or approximately 365%) year-over-year and $0.31 million (or approximately 29%) quarter-over-quarter, largely attributed to the temporary scale down of the e-commerce business, reduced operating costs and the improved gross margins.
  • Cash flow from operations was $1.2 million for Q3 2023 as compared to -$1.0 million in the prior year comparable, an increase of approximately $2.3 million year-over-year. The increase in cash flow from operations can be attributed to an increase in gross margins and a temporary scale down of the Company's e-commerce operations at the end of Q2 2022, which decreased marketing spend, administration, and research and development expenses.
  • As of September 30, 2023 current assets were $15.8 million, which exceeded current liabilities totaling $13.2 million. The Company has a cash balance of $2.9 million as of September 30, 2023.
  • As previously announced on September 28, 2023, payments totaling approximately CAD$1.5 million were made toward the outstanding principal of certain secured notes. Net External Debt decreased by $1.8 million as of September 30, 2023 as compared December 31, 2022. The Company's working capital was $2.6 million as of September 30, 2023, an increase of $7.4 million as compared to -$4.9 million as of June 30, 2023.

Third Quarter 2023 Operational Highlights

  • On September 7, 2023, BuildDirect announced that it completed its e-commerce platform migration and enhancements, delivering the following results:
  • The Company expects to achieve a combined total of approximately US$850,000 in annual cost savings, which includes software and fulfillment expenses
  • Enhanced ERP for more efficient management of finance, inventory and order fulfillment
  • Upgraded e-commerce site for merchandising and marketing to enable potential revenue growth
  • On September 28, 2023, BuildDirect announced the amendment to secured notes issued by BuildDirect Operations Limited, a wholly owned subsidiary of the Company 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 as amended (the "2018 Notes"); and (b) Pelecanus Investments Ltd., Lyra Growth Partners Inc. and Beedie Investments Ltd. in June 2022 as amended (the "2022 Notes"). Among the amendments to the subject Notes were the following:
  • The maturity dates of the 2018 and 2022 Notes were extended to September 30, 2025 and April 1, 2026, respectively, and
  • Approximately CAD$1.5 million was paid toward the outstanding principal of the 2018 Notes; and
  • Interest rates for these Notes decreased to 12%, enabling the Company to achieve approximately $350,000 in interest cost savings annually.

Subsequent events to Third Quarter of 2023

  • On October 5, 2023, BuildDirect announced the launch of new service offerings that are designed for 'Pro' customers, including customized e-commerce sites, white-label branded flooring products, free flooring samples, and fulfillment services that meet the Pro customers' needs. These offerings open the path for BuildDirect to build a potential recurring revenue stream.
  • On October 19, 2023, BuildDirect announced the launch of its sixth brick-and-mortar Pro Center, via an existing Company facility in Richmond, British Columbia, which aims to service flooring professionals in the Greater Vancouver market as well as the Seattle and Spokane markets in the state of Washington. The Company aims to use the Richmond location as a template for future potential BuildDirect Pro Centers across the United States. By starting with a solid foundation of sales, the establishment of Pro Centers is intended to help elevate BuildDirect's impact on the Pros in a local market.

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 and in the news releases of the Company dated November 17, 2021, September 7, 2023, September 28, 2023, October 5, 2023 and October 19, 2023. BuildDirect's unaudited condensed interim consolidated financial statements and accompanying notes and the Management's Discussion and Analysis for the three and nine months ended September 30, 2023 and September 30, 2022 (together with the news releases of the Company dated November 17, 2021, September 7, 2023, September 28, 2023, October 5, 2023 and October 19, 2023), are available on the Company's website at and on the Company's SEDAR profile available at

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

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 Company's establishment of a sizeable physical and digital footprint and the increase of its number of Pro Centers throughout North America, the acceleration of the Company's e-commerce business, the Company's significant opportunity for growth, the Company being well positioned to increase its share of the $70 billion U.S. flooring market, the increase in competitiveness of the Company's e-commerce business, the impact of reduction in the Company's overall fixed costs associated with its e-commerce business being more evident in the Company's Q4 2023 and 2024, the Company's e-commence platform migration and enhancements allowing it to re-focus its energy on profitable growth initiatives within its e-commerce division, the improvement in the Company's profitability and the continued delivery by the Company of positive adjusted EBITDA results.

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.

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. This non-GAAP measure is commonly used by investors and other interested parties to evaluate the Company's financial performance and is employed by the Company to measure its operating and economic performance and to assist in business decision-making. This non-GAAP measure does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. This measure is provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, this measure should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS. Refer also to appendix tables and the "Third Quarter 2023 Financial Highlights" of this press release as well as our Management's Discussion and Analysis (for the three and nine months ended September 30, 2023 and September 30, 2022) for definitions and reconciliations of non-IFRS measures to the nearest IFRS measures. The disclosure under such Management's Discussion and Analysis is incorporated by reference into this news release.

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.

For further information: Matt Alexander, Interim CFO, 1.778.382.7748; BuildDirect Investor Relations,, 1.905.347.5569


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 September 30For the nine months ended September 30
Adjusted EBITDA2023202220232022

Gain (Loss for the period)(480,818)(893,207)(1,800,258)(3,212,165)
Income tax (recovery) expense(71,634) 97,468 318,366 522,618
Depreciation and amortization925,962 1,026,908 2,762,866 3,052,950
Interest603,396 570,914 1,613,130 1,454,483
EBITDA976,906 802,083 2,894,104 1,817,886

EBITDA adjustments

Stock-based compensation 212,079 97,635 328,808292,905

Foreign exchange (gain)/loss(52,811)(746,084)(61,218) (678,502)

Fair value adjustment of convertible debt and warrants37,768(7,173)16,217(756,555)

Impact of fair value adjustment of Inventory in acquisition1 - - - 137,400

Software Implementation Expenses285,025 -188,067-


Loss on extinguishment of debt9,574-9,574-

Adjusted EBITDA1,370,955 294,558 3,477,966 961,230

Adjusted EBITDA %7%1%6%1%


1 The adjustment for the impact of the fair value of FloorSource and Superb inventory relates to the impact on normal selling profit from the fact that IFRS requires the inventory be recorded at fair value on acquisition and not at historical cost. Earnings are impacted as this inventory was sold in the period.

2 The adjustment is a non-recurring activity, associated with the implementation costs of our Enterprise Resource Planning integration project.

3 The adjustment is a non-recurring activity, relating to severance costs associated with the company's restructuring activities.

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

  As at September 30, 2023 As at December 31, 2022
  $ $
Current assets:    

Cash and cash equivalents2,931,762 4,107,754

Short-term investments465,415 318,000

Trade and other receivables4,704,474 4,000,121

Income taxes receivable90,136 171,502

Inventories6,321,692 6,657,450
  Prepaid materials, expenses, and deposits1,302,319 1,696,828

     Total current assets15,815,798 16,951,655
Non-current assets:    
Property and Equipment
580,901 591,880

Intangible assets
6,325,643 8,155,769

Right-of-use assets 
2,686,613 3,566,442

Non-current deposits461,656 987,216

2,530,622 2,530,622

Deferred tax asset
1,207,110 1,207,110

     Total non-current assets13,792,545 17,039,039
Total Assets 29,608,343 33,990,694
Liabilities and Shareholders' Equity  
Current liabilities:  

Accounts payable and accrued liabilities

Current portion of lease liabilities

Deferred revenue

Loan payable

Current portion of promissory note

Current portion of deferred consideration payable


     Total current liabilities13,228,55515,372,898
Non-current liabilities:  

Deferred consideration payable

Lease liabilities

Loan payable

Promissory note

     Total non-current liabilities10,097,30111,170,254
Shareholders' equity:  

Share capital123,109,599122,803,204

Share based payment reserve11,450,59311,121,785

     Total Shareholders’ equity6,282,4877,447,542
     Total Liabilities and Equity29,608,34333,990,694


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

For the three months ended September 30For the nine months ended September 30


Revenue $ 18,411,622 $ 22,007,379 $ 55,362,446 $ 70,455,764

Cost of goods sold 11,090,01815,086,07433,472,93146,384,959

Gross Profit7,321,6046,921,30521,889,51524,070,805

Operating expenses:

Fulfillment costs1,134,8741,530,1973,699,3995,629,233

Selling and marketing1,498,6321,394,6864,220,5475,622,668


Research and development115,619239,806388,2221,123,404

Depreciation and amortization925,9621,026,9082,762,8663,052,950


Income (Loss) from operations86,220(886,456)13,216(2,691,435)

Other income (expense):

Interest income15,06613,57751,04644,223

Interest expense(618,462)(584,491)(1,664,176)(1,498,706)

Rental income61,67056,471185,010169,413

Fair value adjustment of convertible debt and warrants (37,768)7,173(16,217)756,555

Loss on extinguishment of debt (9,574)-(9,574)-

Foreign exchange gain
Restructuring costs


Loss before income taxes(552,452)(795,739)(1,481,892)(2,689,546)

Income tax recovery (expense)71,634(97,468)(318,366)(522,618)

Total loss and comprehensive loss for the period $ (480,818) $ (893,207) $ (1,800,258) $ (3,212,164)
Deficit, beginning of period$ (127,796,887)$ (120,925,977)$ (126,477,447)$ (118,607,020)

Deficit, end of period$ (128,277,705)$ (121,819,184)$ (128,277,705)$ (121,819,184)

Loss per share:

     Basic and diluted loss per share (0.01)(0.03)(0.04)(0.11)


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

For the three months ended September 30
For the nine months ended September 30

20232022 20232022

Cash provided by (used in):

Operating activities:

 Loss for the period $ (480,818)$ (893,207)$ (1,800,258)$ (3,212,164)
 Add (deduct) adjustments and items not affecting cash:

    Income tax (recovery) expense(71,634)97,468318,366522,618
    Stock-based compensation expense212,07997,635328,808292,905
    Other interest and finance cost570,764515,0251,504,4031,278,009
    Interest paid on leases47,69869,465159,773220,699
    Interest earned on lease receivables and other(15,066)(13,577)(51,046)(44,223)
    Fair value adjustment on convertible debt and warrants 37,768(7,173)16,217(756,555)
    Loss on extinguishment of debt 9,574-9,574-
    Unrealized foreign exchange (gain) loss(52,811)(746,084)(61,218)(678,501)


    Income taxes paid(42,500)(50,000)(237,000)(1,361,000)
Changes in non-cash operating working capital:

    Short-term investments52,585-52,585-
    Trade and other receivables(452,289)155,036(902,275)(789,458)
    Prepaid materials, expenses, and deposits433,414652,773720,069914,578
    Accounts payable and accrued liabilities(674,838)(1,351,763)216,935(968,270)
    Deferred revenue(205,088)(411,251)(31,951)(904,627)
Total operating activities1,166,472(1,029,310)3,341,606(2,684,171)

Investing activities:

    Purchase of property and equipment(18,098)(18,924)(41,929)(34,377)
    Principal received on lease receivables67,45861,673197,922180,948
Total investing activities49,36042,749155,993146,571

Financing activities:

    Private placement proceeds-2,469,916306,3952,469,916
    Proceeds from exercise of stock options-15,244-15,244
    Interest Paid(218,333)(234,004)(715,328)(581,807)
    Principal lease payments(363,387)(339,200)(1,071,252)(993,304)
    Loan repayment(1,167,759)-(1,584,657)-
    Promissory note repayment(311,250)(311,250)(933,750)(933,750)
    Deferred consideration repayment--(675,000)(675,000)
    Loan proceeds---4,500,000
Total financing activities(2,060,729)1,600,706(4,673,592)3,801,299

Increase/(Decrease) in cash and cash equivalents(844,897)614,145(1,175,993)1,263,699
Cash and cash equivalents, beginning of period3,776,6592,366,5404,107,7541,716,986
Cash and cash equivalents, end of period$ 2,931,762$ 2,980,685$ 2,931,762$ 2,980,685


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