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BuildDirect (TSXV:BILD) CEO Shawn Wilson talks to Cantech Letter

*All amounts are in $USD unless otherwise noted

Shawn tell us a bit about your business. How do you make money?

The $70B flooring industry 1 is fragmented and is difficult to navigate from a customer’s perspective. Manufacturers produce a variety of products with often conflicting marketing stories and are disconnected from the flooring contractors that provide installation services. There are also often multiple layers of distribution, buying groups, and retailers in between the factory that produces the products and the contractors that installs the products. BuildDirect is attempting to tackle these industry challenges with its omnichannel business focused on the contractors (both flooring and general) as our primary customer. Contractors drive a significant amount flooring projects and can assist in matching the right product for an installation. Today BuildDirect has a robust and efficient factory-to-project supply chain, a well-established E-Commerce business that sells to both contractors and homeowners working with contractors (Online), as well as a footprint of Brick & Mortar operations with flooring contractor-focused locations and locations that focus on serving general-contractors that provides both product and installation services for larger-scale projects (collectively Independent Retailers). Combined, we have built a digital-physical footprint that is positioned to grow profitably with 2021 annualized revenue of $108M ($52M of annualized Online revenue and $56M of annualized Independent Retailer revenue).

Is your space growing? How are you positioned to benefit?

Flooring is a resilient, growing category. The industry has an estimated CAGR of +4% 1 and is segmented into residential remodeling, commercial, and new construction. BuildDirect is positioned to services these industry segments and can adjust focus and resources to pursue growing segments. Overall, the needs for housing will continue to grow and with it, new or replacement flooring.

What’s your financial situation like?

As we’ve continued to hone our omni- business focused on the professional contractor, we’ve transitioned our company from a negative EBITDA to +$0.6M Q2 2022. As part of our continued focus on the professional contractor segment, we have made cost reductions of ~$2M annualized as of June 30th, 2022), which would equate to a +$4M Adjusted EBITDA on a forward looking 12-month basis. With the continued support from institutional investors, we recently closed a CAD $3.15M private placement to assist with the ongoing transition in the business. Moving into 2023, we are expecting positive operating cashflows on a consolidated basis and continued responsible growth primarily through organic methods.

What is your key competitive advantage?

BuildDirect’s omnichannel business connects North American home improvement B2B and B2C organizations, and homeowners through its robust global supply chain. Our heavy-weight delivery platform combined with our E-Commerce business enables us to focus marketing efforts in growing areas leveraging our Brick & Mortar operations. Through our acquisitions of Charter Distributing Company (dba FloorSource) and Superb Floor Coverings LLC, we have acquired Brick & Mortar locations established in their respective markets and we will continue to leverage the synergies between our online and physical operations to provide cost-reductions and new selling opportunities. BuildDirect has an established brand (incorporated in 1999) and repeatable business with over 85% of our revenue coming from professional contractors as of Q2 2022. Overall, BuildDirect’s cost, delivery, and omni-channel offerings will assist the company as we continue to pursue further growth.

What do you hope to accomplish in the next year?

In Q4 2022 and heading into 2023, we will continue to focus on the professional contractor segment, implement synergies gained through our 2020/2021 acquisitions, explore additional online product categories that best serve the professional contractor, and continue to hone our fixed costs and marketing strategies to improve profitability and growth prospects.





Forward Looking Information:

This interview contains statements which constitute forward-looking statements and forward looking informatt; 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 interview may include, without limitation, statements relating to flooring industry challenges and BuildDirect’s response to the same, BuildDirect’s robust and efficient factory-to-project supply chain and well-established E-Commerce business and brand, the repeatability,
growth and profitability of BuildDirect’s business, positive operating cashflows, BuildDirect’s servicing of the residential remodeling, commercial and new construction segments and its ability to pursue growing industry segments, the addition of online product categories, the ongoing transition of BuildDirect’s business to focus on the professional contractor segment, the opportunity for and impact of synergies with BuildDirect’s acquisitions, the impact of cost reductions, and the maintenance of positive adjusted EBITDA.

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, retention of key personnel 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.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. 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 interview 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. There may be other risks, uncertainties and factors that cause results not to be as anticipated, estimated or intended and such changes could be material. These forward-looking statements are made as of the date of this interview, and BuildDirect assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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