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BuildDirect Reports Fourth Quarter and Year End 2021 Financial Results, Full Year Revenue up 7.1% to $90.7 Million
Tuesday, May 3, 2022Company Profile | Follow Company
Vancouver, BC, May 3, 2022--(T-Net)--BuildDirect.com Technologies Inc. (TSXV: BILD) a growing omnichannel building material retailer, today announced its financial results for the Q4 2021 and full-year audited financial results for the year ended December 31, 2021.
"I am very proud of what we achieved in 2021." said David Lazar, interim CEO of BuildDirect. "In addition to reaching $90.7 million of revenue for the year, we have integrated the FloorSource acquisition into our broader operations and closed the acquisition of Superb Flooring & Design. Our team's dedication and ability to adapt quickly to market trends has helped us respond to challenges presented by COVID and global supply chain pressures. Looking forward, we continue to focus on the growing Pro customer market with its higher average basket recurring purchases."
Q4 and Full Year 2021 Financial Highlights
USD$ (unless otherwise noted) |
Q4 2021 |
Q3 2021 |
% Change |
Full Year 2021 |
Revenue |
$24.0 million |
$22.4 million |
7.1% |
$90.7 million |
Gross Profit |
$7.6 million |
$8.1 million |
(6.2)% |
$31.8 million |
Gross Margin |
31.5% |
36.4% |
(4.9)% |
35.1% |
Adjusted EBITDA1 |
($3.2) million |
($0.6) million |
(433.3)% |
$(4.0) million |
1 |
Adjusted 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. |
Q4 and Full Year 2021 Highlights
Post-Quarter Highlights
2022 Outlook
The outlook for the home improvement sector remains optimistic, supported by a consistently strong North American housing and real estate market. Whilst the consistent and resilient demand for home improvement and construction is encouraging, broader macro uncertainty remains around the impact of inflation, supply chain pressures, and evolving customer habits.
Looking to 2022, BuildDirect's growth strategy focuses primarily on expanding its foothold in the Pro customer market through four key strategic pillars:
In addition to driving revenue growth, the Company is undertaking a number of key initiatives including shifting our focus more strongly towards Pro revenues, passing increased product costs on to the customer, and maximizing acquisition synergies to drive margin expansion with the goal of delivering profitability.
Ethan Rudin, CFO of BuildDirect said, "To execute on our strategy, we will continue to invest in the Pro market, extract financial and operational synergies from our acquisitions, and drive fixed-costs down. In Q1 2022, we are estimating revenues to be over $24 million and we're estimating to achieve positive Adjusted EBITDA. In addition, our cash balance has improved from year-end 2021 and at the end of Q1 2022 our cash balance is estimated to be over $5 million."
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, 2020 and December 31, 2021 and Management's Discussion and Analysis for the three and twelve months ended December 31, 2020 and 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.
Reference is made in this press release to the following non-GAAP measures: Adjusted EBITDA. These non-GAAP measures are commonly used by investors and other interested parties to evaluate our financial performance and are employed by the company to measure its operating and economic performance and to assist in business decision-making. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. These measures are provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, these measures 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 " Q4 and Full Year 2021 Highlights" of this press release as well as our Management's Discussion and Analysis for definitions and reconciliations of non-IFRS measures to the nearest IFRS measures.
NON-IFRS MEASURES
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 |
For the year ended |
||||
Adjusted EBITDA |
2021 |
2020 |
2021 |
2020 |
|
Gain (Loss) for the period |
2,599,558 |
(2,131,803) |
(10,327,659) |
(4,559,236) |
|
Income tax expense |
(912,446) |
- |
371,091 |
- |
|
Depreciation and amortization |
220,875 |
460,190 |
2,967,113 |
1,074,610 |
|
Interest |
530,556 |
343,057 |
2,295,715 |
841,657 |
|
EBITDA |
2,438,543 |
(1,328,556) |
(4,693,740) |
(2,642,969) |
|
EBITDA adjustments |
|||||
Stock-based compensation |
(967,833) |
- |
282,281 |
172,561 |
|
Foreign exchange (gain)/loss |
197,301 |
520,120 |
187,402 |
137,525 |
|
Foreign currency translation differences |
(34,123) |
- |
(34,123) |
- |
|
Fair value adjustment of convertible debt and warrants |
(4,872,492) |
- |
(3,417,864) |
- |
|
Impact of fair value adjustment of Inventory in FloorSource acquisition1 |
- |
- |
528,552 |
- |
|
Significant bad debt expense2 |
- |
- |
257,891 |
- |
|
Finance costs3 |
- |
- |
1,475,886 |
- |
|
Listing expenses4 |
- |
- |
1,017,659 |
- |
|
Other expenses related to TSXV listing5 |
- |
- |
409,211 |
- |
|
Adjusted EBITDA |
(3,207,463) |
(808,436) |
(3,986,845) |
(2,332,883) |
|
Adjusted EBITDA % |
(13)% |
(5)% |
(4)% |
(4)% |
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 totaling CDN $1,796,748. |
4 |
The adjustment relates to the consideration transferred in excess of the net assets acquired and certain expenses related to the reverse acquisition. |
5 |
The adjustment relates to the non-recurring legal and accounting expenses required to bring the company to public company standards. |
Condensed Consolidated Interim Statement of Financial Position |
|||||||
2021 |
2020 |
||||||
Restated (Note 4) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
1,719,986 |
$ |
5,416,511 |
|||
Short-term investments |
118,000 |
118,000 |
|||||
Trade and other receivables |
4,420,994 |
2,727,955 |
|||||
Advances to vendors |
1,979,061 |
391,641 |
|||||
Inventories |
7,452,570 |
5,446,940 |
|||||
Prepaid materials, expenses and deposits |
424,137 |
994,597 |
|||||
Total current assets |
16,111,748 |
15,095,644 |
|||||
Non-current assets: |
|||||||
Property and equipment |
599,232 |
835,921 |
|||||
Intangible assets |
12,650,528 |
7,164,516 |
|||||
Right-of-use assets |
4,305,647 |
900,834 |
|||||
Non-current advances to vendors |
1,141,805 |
567,284 |
|||||
Goodwill |
4,280,165 |
2,530,622 |
|||||
Deferred tax asset |
364,329 |
- |
|||||
Total Assets |
$ |
39,453,454 |
$ |
27,094,821 |
|||
Liabilities and Shareholders' Equity (Deficiency) |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued liabilities |
$ |
7,619,937 |
$ |
5,903,080 |
|||
Current portion of lease liabilities |
1,286,775 |
458,841 |
|||||
Deferred revenue |
2,460,498 |
1,531,960 |
|||||
Current portion of promissory note |
1,021,161 |
831,993 |
|||||
Current portion of deferred consideration payable |
2,484,571 |
372,226 |
|||||
Loan payable |
3,828,971 |
3,927,113 |
|||||
Income taxes payable |
735,420 |
- |
|||||
Total current liabilities |
19,437,333 |
13,025,213 |
|||||
Non-current liabilities: |
|||||||
Deferred consideration payable |
553,732 |
1,006,961 |
|||||
Lease liabilities |
3,929,806 |
1,476,044 |
|||||
Convertible notes |
- |
12,120,679 |
|||||
Warrants |
823,090 |
480,321 |
|||||
Promissory note |
3,386,300 |
4,409,615 |
|||||
Shareholders' equity (deficiency): |
|||||||
Share capital |
119,075,245 |
92,459,612 |
|||||
Share based payment reserve |
10,854,968 |
10,395,737 |
|||||
Deficit |
(118,607,020) |
(108,279,361) |
|||||
11,323,193 |
(5,424,012) |
||||||
Total Liabilities and Equity |
$ |
39,453,454 |
$ |
27,094,821 |
Condensed Consolidated Interim Statement of Operations and Comprehensive Loss |
|||||
Years ended December 31, 2021 and 2020 |
|||||
2021 |
2020 |
||||
Revenue |
$ |
90,667,936 |
$ |
52,110,155 |
|
Cost of goods sold |
58,833,238 |
32,083,225 |
|||
Gross Profit |
31,834,698 |
20,026,930 |
|||
Operating expenses: |
|||||
Fulfillment costs |
8,975,684 |
8,729,026 |
|||
Selling and marketing |
11,700,348 |
7,407,773 |
|||
Administration |
15,299,126 |
6,763,441 |
|||
Research and development |
1,629,447 |
310,079 |
|||
Depreciation and amortization |
2,967,113 |
1,074,610 |
|||
40,571,718 |
24,284,929 |
||||
Loss from operations |
(8,737,020) |
(4,257,999) |
|||
Other income (expense): |
|||||
Interest income |
96,166 |
123,997 |
|||
Interest expense and other transaction cost |
(2,391,881) |
(965,654) |
|||
Finance costs |
(1,475,886) |
- |
|||
Fair value adjustment of convertible debt and warrants |
3,417,864 |
- |
|||
Rental income |
222,416 |
404,203 |
|||
Foreign exchange loss |
(187,402) |
(137,525) |
|||
Listing expenses |
(900,825) |
- |
|||
Gain on lease adjustments |
- |
273,742 |
|||
(1,219,548) |
(301,237) |
||||
Loss before income taxes |
(9,956,568) |
(4,559,236) |
|||
Income tax expense |
(371,091) |
- |
|||
Total loss and comprehensive loss for the year |
$ |
(10,327,659) |
$ |
(4,559,236) |
|
Loss per share |
|||||
Basic and diluted loss per share |
$ |
(0.41) |
$ |
(0.21) |
Condensed Consolidated Interim Statement of Cash Flows |
|||||||
Years ended December 31, 2021 and 2020 |
|||||||
2021 |
2020 |
||||||
Cash provided by (used in): |
|||||||
Operating activities: |
|||||||
Loss for the year |
$ |
(10,327,659) |
$ |
(4,559,236) |
|||
Add (deduct) items not affecting cash: |
|||||||
Depreciation and amortization |
2,967,113 |
1,074,610 |
|||||
Income tax expense |
371,091 |
- |
|||||
Stock-based compensation expense |
459,231 |
230,082 |
|||||
Interest paid on leases |
317,282 |
311,203 |
|||||
Other interest and finance cost |
2,074,598 |
654,451 |
|||||
Interest earned on lease receivables |
(96,166) |
(123,997) |
|||||
Fair value adjustment on convertible debt and warrants |
(3,417,864) |
- |
|||||
Finance costs |
1,475,886 |
- |
|||||
Listing expenses |
900,825 |
- |
|||||
Gain on lease adjustments |
- |
(273,742) |
|||||
Debt financing transaction costs |
- |
195,195 |
|||||
Unrealized foreign exchange |
16,238 |
110,683 |
|||||
(5,259,425) |
(2,380,751) |
||||||
Changes in non-cash operating working capital: |
|||||||
Short-term investments |
- |
(83,000) |
|||||
Trade and other receivables |
(402,880) |
(60,174) |
|||||
Inventories |
(1,453,263) |
(35,188) |
|||||
Prepaid materials, expenses and deposits |
570,460 |
1,119,735 |
|||||
Advances to vendors |
(2,161,941) |
276,665 |
|||||
Accounts payable and accrued liabilities |
1,302,915 |
360,914 |
|||||
Deferred revenue |
613,006 |
250,913 |
|||||
Total operating activities |
(6,791,128) |
(550,886) |
|||||
Investing activities: |
|||||||
Purchase of property and equipment |
(109,998) |
(105,508) |
|||||
Principal received on lease receivables |
223,090 |
230,958 |
|||||
Acquisition of business, net of cash acquired and assumed debt |
(9,429,166) |
(8,475,800) |
|||||
Total investing activities |
(9,316,074) |
(8,377,350) |
|||||
Financing activities: |
|||||||
Subscription receipts proceeds |
16,592,133 |
- |
|||||
Subscription receipts issuance costs |
(1,475,886) |
- |
|||||
Proceeds from convertible debt |
- |
12,601,000 |
|||||
Financing and listing transaction costs |
(34,040) |
(195,195) |
|||||
Principal lease payment |
(1,110,304) |
(689,048) |
|||||
Interest paid |
(225,745) |
(841,657) |
|||||
Proceeds from exercise of stock options |
20,901 |
3,500 |
|||||
Promissory note repayment |
(1,245,000) |
- |
|||||
Loan repayment |
(114,382) |
- |
|||||
Total financing activities |
12,407,677 |
10,878,600 |
|||||
Effects of currency translation on cash and cash equivalents |
- |
8,633 |
|||||
Increase (decrease) in cash and cash equivalents |
(3,699,525) |
1,958,998 |
|||||
Cash and cash equivalents, beginning of year |
5,416,511 |
3,457,513 |
|||||
Cash and cash equivalents, end of year |
$ |
1,716,986 |
$ |
5,416,511 |
Forward-Looking Information
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