Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BuildDirect.com Technologies Inc (BDCTF, Financial) reported a gross margin improvement to 39.2% in Q4 2024, up from 35.2% in the same quarter of the previous year.
- The company achieved a positive adjusted EBITDA of $376,000 in Q4 2024, marking an increase from $73,000 in Q4 2023.
- BuildDirect.com Technologies Inc (BDCTF) has a strategic focus on expanding its Pro Center network, which is designed to serve professional contractors and improve operational efficiency.
- The company has secured a CAD9.5 million revolving credit facility from the Royal Bank, enhancing its financial flexibility.
- BuildDirect.com Technologies Inc (BDCTF) is actively pursuing M&A opportunities to accelerate expansion, supported by a dedicated M&A team and integration playbooks.
Negative Points
- Revenue for the full year 2024 decreased by 9.4% to $65.5 million compared to $72.3 million in 2023.
- The retailer segment, or Pro Center, experienced a revenue decline of 4.3% year over year, attributed to softness in home remodeling and new construction activity.
- Adjusted EBITDA for the full year 2024 was $2.2 million, down from $3.6 million in 2023, primarily due to a decline in sales.
- Operating expenses increased by 3.8% in Q4 2024 compared to the same quarter in 2023, driven by higher selling and marketing expenses.
- The e-commerce segment saw a revenue decline of 23% for the full year 2024, attributed to a strategic scale-down earlier in the year.
Q & A Highlights
Q: What is the typical timeline for integrating a new acquisition, and can we expect more acquisitions this year?
A: Shawn Wilson, CEO: The integration process typically takes around 60 days from start to finish. We focus on capturing procurement synergies first, which involves locking down pricing and lowering costs. We are actively pursuing M&A opportunities and have a pipeline in place to support this strategy.
Q: How do you feel about the growth in the e-commerce side of the business heading into 2025?
A: Shawn Wilson, CEO: We feel great about the e-commerce side. We've put a lot of work into the business over the last couple of years and have found our groove. The e-commerce platform is increasingly connected with our Pro Centers for fulfillment, and we are optimistic about its potential.
Q: Adjusted EBITDA declined year over year. Can you walk us through what's driving that and how you're addressing it in 2025?
A: Kerry Biggs, CFO: The decline in adjusted EBITDA from $3.6 million in 2023 to $2.2 million in 2024 was primarily driven by a decrease in sales, especially in the e-commerce segment. We are addressing this by scaling our Pro Centers, optimizing new locations, and maintaining tight cost discipline.
Q: Can you elaborate on the company's current cash position and how you're managing liquidity given upcoming expansion plans?
A: Kerry Biggs, CFO: As of December 31, we had $2.3 million in cash and $2.7 million in working capital. We secured a CAD9.5 million revolving credit facility from the Royal Bank, enhancing our financial flexibility. We expect to remain cash neutral to positive in 2025, even after covering all fixed charges.
Q: How should investors think about the impact of the current tariff situation on your business, and is it a catalyst for potential M&A?
A: Shawn Wilson, CEO: We have flexibility in our supply chain and do not have long-term supply contracts, allowing us to adapt to tariff changes. The current tariff situation could accelerate our M&A pipeline as it presents opportunities to acquire businesses that may be struggling with these challenges.
Q: Can you provide more specifics around BuildDirect's debt stack and the covenants?
A: Kerry Biggs, CFO: At year-end, our debt stood at approximately $11 million, with $8.3 million being secured debt from insider lenders. We have a new credit facility with Royal Bank, which includes a debt service covenant and a debt-to-EBITDA covenant. We have significant room and flexibility around these covenants.
Q: Looking ahead into 2025, what are the top three KPIs investors should be looking for this year?
A: Shawn Wilson, CEO: Investors should focus on our location-driven strategy, including building and acquiring new locations. Additionally, monitoring our margin improvements and how we structure deals will be important as we continue to expand.
Q: What are your closing comments for the audience?
A: Shawn Wilson, CEO: We appreciate everyone following our story. It's been quite a journey, and we're just getting started. We're energized and excited about the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
