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.
|
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SOURCE BuildDirect.com Technologies Inc.