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BuildDirect Reports Third Quarter 2023 Financial Results

General News
BuildDirect Logo - Retail Lumber Yard 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 Highlights

  • 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

For the complete press release, click here.

About BuildDirect

BuildDirect (TSXV: BILD “BuildDirect” or the “Company”) 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

Source: Technologies Inc.