Mr. Shawn Wilson reports

BUILDDIRECT REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Builddirect.com Technologies Inc. (Builddirect) has released its financial results for the second quarter of 2023 (Q2 2023).

"During Q2 2023, Builddirect continued to produce strong financial results, as highlighted by our sixth consecutive quarter of positive adjusted EBITDA, which increased to $1.06-million for the three months ended June 30, 2023," said Shawn Wilson, chief executive officer of Builddirect.

"As part of our growth strategy, we continue to expand our e-commerce platform and scale our brick-and-mortar operations with a focus on serving Pro customers," continued Mr. Wilson. "With the goal of driving profitability, we aim to maximize cost-efficiencies by implementing additional operational initiatives, including insourcing our fulfilment operations in other locations and integrating our technology infrastructure across all business units while minimizing disruption to productivity."

Second quarter 2023 financial results conference call

Builddirect will host a conference call to discuss the company's financial results.

Time:  10 a.m. PDT (1 p.m. (EDT)

Date:  Tuesday, Aug. 29, 2023

Register on-line.

The replay will be available approximately 24 hours after the completion of the conference call. In addition, an archived replay will be available on the investor relations section of the company's website.

Among other things, Builddirect will discuss the long-term financial outlook on the conference call and related materials will be available on the company's website. Investors should carefully review the factors, assumptions, risks and uncertainties included in such related materials concerning such as the long-term financial outlook.

Second quarter 2023 financial highlights:

• Total revenue was $19.1-million for Q2 2023, a decrease of 20.6 per cent year over year and an increase of 7.1 per cent quarter over quarter. The decrease in revenue year over year is primarily driven by Builddirect's e-commerce business. Historically, Builddirect's e-commerce business has produced negative EBITDA (earnings before interest, taxes, depreciation and amortization), which was offset by strong positive EBITDA from its independent retailer businesses. In Q2 2022, Builddirect scaled back its e-commerce business and began implementing efficiency initiatives to improve the profitability of the e-commerce model. The increase in revenue quarter over quarter is due to e-commerce beginning to scale back up. At this point, Builddirect believes it is close to completing its efficiency initiatives and will soon be ready to grow its e-commerce business more aggressively.
• Gross margin was 39.7 per cent for Q2 2023, an increase of 470 basis points year over year and 50 basis points quarter over quarter. The increase in gross margin is mostly the result of significant improvements Builddirect made in the business, including operational efficiency initiatives for the e-commerce operations.
• Pro revenue was $17.4-million for Q2 2023, which represents 88.8 per cent of the company's total revenue during the second quarter of 2023, an increase of 6.3 per cent year over year. The increase in Pro revenue was driven by an overall shift in strategy to focus on the more profitable Pro customer base.
• Adjusted EBITDA was $1.06-million for Q2 2023, an increase of approximately $440,000 year over year. The increase is largely attributed to the company's focus on profitability and running efficient operations.
• Cash flow from operations was $1.7-million in the first six months of 2023, as compared with negative $2.0-million in the prior-year comparable, an increase of $3.7-million year over year.
• Loan payable and promissory note repayments totalling $500,000 were made in Q2 2023. Net external debt decreased by $900,000 as of June 30, 2023, as compared with Dec. 31, 2022.

Second quarter 2023 operational highlights:

• On April 3, 2023, Builddirect announced that it appointed Jay Allen as general manager. Mr. Allen has 25 years of experience in building e-commerce and digital divisions across fashion, home goods and flooring, and consumables companies such as Starbucks, Lowe's and Stainmaster.
• On May 23, 2023, Builddirect announced that it granted an aggregate of 2.85 million stock options to five officers and nine employee of the company and its subsidiaries in accordance with the company's omnibus equity incentive plan.
• On June 14, 2023, Builddirect announced that it completed a project to consolidate Builddirect's third party warehouse operations in the northeastern United States and will insource those operations through a wholly owned location in Michigan. This project aims to unlock inventory synergies between Builddirect's e-commerce and independent retailer businesses, and lower fulfilment costs for the company's e-commerce operations.
• Actual results may differ materially from Builddirect's financial outlook as a result of, among other things, the factors that are forward looking. Builddirect's unaudited condensed interim consolidated financial statements and accompanying notes, and the management's discussion and analysis, for the three and six months ended June 30, 2023, and June 30, 2022, are available on the company's website and on the company's SEDAR profile.

About Builddirect.com Technologies Inc.

Builddirect is a growing omnichannel building material retailer. Builddirect connects North American home improvement B2B (business-to-business) and B2C (business-to-consumer) 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.

Non-IFRS (international financial reporting standards) measures

The company defines 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. The company is presenting these measures because it believes that its current and potential investors, and many analysts, use them to assess the company's 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.

We seek Safe Harbor.