BuildDirect.Com Technologies Inc.

Hi, everyone. We're just waiting for more people to log into the call. We'll begin shortly. All right, that's it again. Hello, everyone, and welcome to BuildDirect's Q1 2026 Financial Results Conference Call. My name is Bob, and I'll be your moderator for today. BuildDirect trades on the TSX-V on the ticker symbol B-I-L-D, that's B-I-L-D, and on the OTCQB under ticker symbol B-D-C-T-F, that's B-D-C-T-F. Joining me on the call are Sean Wilson, CEO, and Kerry Vicks, CFO of BuildDirect. Before we begin, I would like to remind everyone that certain statements made during this call may constitute forward-looking information within the meaning of applicable securities laws These statements are based on management's current expectations and are subject to risk and uncertainties. Please refer to the detailed forward-looking statements and advisories in today's earnings deck and press release. If you have any questions during the call, please send them in using the Zoom Q&A function at the bottom of your screen or email them to ir.doldirect.com. We'll address these questions during the Q&A session. A replay of this call will be available approximately 24 hours after the conclusion and will be posted on the IRS section of our website at ir.billderick.com. I would now like to turn the call over to Sean Wilson, CEO of Bill Derrick. Please go ahead, Sean.

Thank you, Bob, and greetings, everyone. Thanks for joining us today. We went with a quarter that reflected the strategy we've been executing against. While the broader home improvement market continues to evolve, we deliver strong margin retention, animated positive operating cash, and most importantly, continue to advance our footprint expansion initiatives. Last 12 months, we've completed three accretive acquisitions. The Orlando Pro Center, Brain Custom Wood in February, and Powell Outlets of America was just closed. That is the story of this quarter. While the market compresses valuations, we're using a strengthened balance sheet to scale, to build an operating leverage for the recovery. As you'll see in today's materials, Q1 revenue was $14.6 million, down 3% year-over-year, reflecting a softer industry-wide demand. But importantly, we held gross margin at 40.2%, generated $0.55 million in positive operating cash flow, and strengthened our cash position. Working capital improved by $4.7 million year-over-year. Cost centers represented 72% of total revenue in the quarter, our largest segment, by scale and the platform we're building around. That same pro center platform is what makes our M&A program work. It gives every acquisition a place to plug in, to integrate, and to immediately benefit from sourcing, technology, and back office leverage. I'll now hand over to Kerry to walk through the detailed financial results.

Yeah, thanks, Sean, and good afternoon, everyone. Let me walk you through the quarter here. Sean noted Q1 was uh 14.6 million uh of sales compared to 15.1 million uh in q1 2025 so a decrease of 3.3 percent um which we view as as fairly positive given the uh macro uh economic environment that uh that the company is in uh gross margin came in at 40.2 percent uh 110 basis points below the very strong 41.3% margin we delivered in Q1 of 2025. Again, as Sean noted, we did generate positive operating cash flow of 0.55 million, a good result for the quarter given the demand backdrop. Looking at the segment breakdown, e-commerce contributed 3.9 million of the quarterly revenue. and a 52% gross margin, while the Pro Centers contributed $10.7 million at a 35.9% gross margin. So together, our omni-channel model continues to deliver structurally higher margins than a pure retail comparable. Turning to the consolidated summary, year-over-year revenue was down 3.3% to $14.6 million. Gross profit was 5.9 million versus 6.2 million the prior year, and gross margins noted was 40.2 versus 41.3. Adjusted EBITDA for the quarter was a modest loss in the range that we previewed in our May 12th press release, driven primarily by lower segment volume, partially offset by the margin discipline that we note. At the segment level, both businesses generated a positive adjusted EBITDA. The e-commerce segment at 0.12 million and the pro centers at 0.62 million for combined operational segment adjusted EBITDA. Pre-corporate costs came in at 0.74 million. So the story is consistent quarter after quarter. The underlying segments are profitable. Platform overall is generating cash and the balance sheet is positioned for capital deployment, which we did subsequent to quarter end. Moving on to the next slide, the e-commerce segment revenue, as I said, was 3.9 million, down 8.1% from 4.2 million in Q1 of 2025, reflecting a slightly softer category demand in early 2026. Gross margin actually expanded 10 basis points to 52% this quarter, supported by disciplined pricing and a core product mix assortment. Operating expenses came in at $1.9 million on lower marketing and discretionary spend, and segment-adjusted EBITDA, as noted, was $0.12 million, compared to $0.15 million in Q1 of 2025. The key story for the quarter for e-commerce is the integration of the Grain platform, which was the asset purchase we closed in early February. Grain adds a marketplace platform with major U.S. retailer channels. and we expect revenue contribution to accelerate as we move through the year in this segment. We're also routing more fulfillment through our Pro Center network, especially grain, which will be expected to further support our margin efficiency. On the next slide, the Pro Center segment, this remains obviously our largest segment in our M&A integration platform. Revenue for this segment was $10.7 million, down 1.4% year-over-year, Gross margin was 35.9%, generating $3.85 million in gross profit. And, again, the segment of the JustiDiva that was $0.62 million for the ProCenter segment. The Orlando ProCenter we opened in Q1 of 2025 by the purchase of the Yorkshire and Anchor assets was our opening M&A step into the Florida market. And the Tile Outlets of America acquisition that we just closed on May 12th has three new Florida showrooms in Tampa. Sarasota and Fort Myers, along with approximately 19 and a half million of annual sales to our Florida foundation to expand our Florida footprint meaningfully and gives us regional density, which we did not have before. So with that, I'll just quickly hand it back to Sean to walk through the footprint expansion in more detail here.