BuildDirect.Com Technologies Inc.

Hi everyone, this is Prit Singh, your moderator for today. We will begin momentarily, just waiting for a few more attendees to arrive. Okay, let's begin. Hi, everyone. Welcome to BuildDirect's fourth quarter and full year 2022 earnings conference call. For those that are unfamiliar, BuildDirect trades on the TSX Venture Exchange under the ticker BUILD, B-I-L-D. My name is Prit Singh, and I will be the moderator for today's call. Before we begin, I would like to note that some of the comments today will contain forward-looking information and statements under applicable securities law that reflect management's current views with respect to future events. Any such information and statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking information and statements. Please refer to the various materials the company has filed with Canadian securities regulators for a broader description of operational and risk factors that could affect the company's performance. In addition, please note that all dollar amounts mentioned in this presentation are in U.S. dollars. On today's call, we will be covering BuildDirect's Q4 and full year 2022 operational and financial highlights, as well as its growth outlook for the remainder of 2023. Following BuildDirect management's comments, the call will be opened for a Q&A session. Questions can be sent using the Zoom Q&A function at the bottom of your Zoom screen. Alternatively, if you are calling in to listen to this webinar today, please email your questions directly to ir at builddirect.com. Again, that is ir at builddirect.com. Our presenters today will be the CEO of BuildDirect, Sean Wilson, and CFO of BuildDirect, Matthew Alexander. With that out of the way, I will now turn the conference call over to Sean Wilson, CEO of BuildDirect.

Thank you, Brett. For first-time viewers, BuildDirect is a leading North American omni-channel building material retailer that delivers a full assortment of quality flooring materials and services to homeowners and home improvement professionals in North America. Here's a quick glance at our key financial highlights for the year ended 2022, which will be covered in greater detail by Matt Alexander, CFO of Bill Direct, during today's call. We generated $92.2 million in total revenue while producing a gross margin of roughly 34.7%, and our total adjusted EBITDA was $1.3 million. With that, Matt, would you go through the detailed loop?

Thanks, Sean. I'll now speak to the key financial highlights for the year-ended December 31, 2022. As noted by Sean, I'm pleased to report that we achieved full-year revenue of $92 million, an increase of 1.6% year-over-year. Driving this growth was the full-year revenue impact of our superb Florian acquisition, which occurred in November of 2021. and was partially offset by the reduction of our e-commerce revenue as the company adjusts its strategy away from the consumer segment and focuses more on the profitable pro segment. This change in strategy can be seen in our pro revenue results, which reached 77 million in 2022, an increase of 35% year-over-year, and now represents 84% of our total revenue at the year-end. Moving down the P&L, full year 2022 gross margins dropped slightly by 40 basis points year over year, from 35.1% to 34.7%. The decrease in margins can be attributed to the acquisition of Superb Flooring, which is focused on lower margin but healthy EBITDA contracts. This shift diluted the company's overall margin but improved the bottom line or adjusted EBITDA. The Q4 gross margin which is indicative of our expected margins moving forward, increased 500 basis points from 31.4% to 36.4% year over year. The change in margins are due to the following. Focus on the profitable pro customer, the improvement in our e-commerce product margin as we shift our pricing strategy from an everyday low price strategy to a high low pricing strategy. Finally, A reduction in supply chain costs have reduced our COGS. We expect our Q4 margin to be more in line with the future margin results going forward. In prior calls, we've mentioned that the company has made cost reductions primarily focused within the BuildDirect e-commerce business as the company continues to shift its focus onto the profitable pro-market segment and away from the higher-cost consumer segment. This has allowed us to reduce our digital marketing spend and reduce our fixed costs. In Q4, we continue to see the results of this shift. Q4 adjusted EBITDA was 0.4 million, a positive 0.4 million, an increase of 3.6 million year over year. And this is our fourth consecutive quarter of positive adjusted EBITDA results. On a full year basis, our adjusted EBITDA was 1.3 million, an increase of 5.3 million year over year. Our intended strategy is to continue to focus on profitability and to continue to deliver positive adjusted EBITDA quarters. Shifting to our balance sheet, we've extended the terms on our loans payable. This has flipped our working capital balance, which is now showing positive working capital of $1.5 million, an increase of $4.9 million year-over-year. In that working capital balance, our current cash and short-term investment balance as at December 31st was $4.4 million. With our improved profitability, we expect to be able to further extend our loans payable at a more favorable interest rate. Our intended strategy is to generate cash flow to service our outstanding loans payable without any further dilution to our shareholders. Highlighting again the strides we've made on profitability, we're showing a $5.3 million year-over-year change in our adjusted EBITDA. Further to this change, many of our initiatives to reduce overhead and improve profitability were enacted in Q3 and Q4 of 2022. We did not see the full annualized benefit of these changes. Looking forward into 2023, we expect to see the annualized benefits of the changes we've made, and we have further initiatives to improve profitability. By focusing on the profitable pro customer, we intend to maintain the improved adjusted EBITDA, results, and positive cash flow from operations. Now I'll turn it back over to Sean Wilson, who will go over the operational highlights of the company.