Vancouver, British Columbia--(Newsfile Corp. - September 28, 2023) - BuildDirect.com Technologies Inc. (TSXV: BILD) ("BuildDirect" or the "Company") a leading omnichannel building material retailer, announces the amendment of secured notes issued by BuildDirect Operations Limited, a wholly owned subsidiary of the Company ("BuildDirect Operations") to: (a) Deans Knight Capital Management Ltd. in its capacity as portfolio manager on behalf and for the benefit of two fully managed accounts (collectively the "Dean Knight Noteholders") in March 2018 as most recently amended in December 2022 (the "2018 Notes"); and (b) Pelecanus Investments Ltd. ("Pelecanus"), Lyra Growth Partners Inc. ("Lyra") and Beedie Investments Ltd. ("Beedie" and, together with Pelecanus and Lyra, the "Lenders") in June 2022 as recently amended in December 2022 (the "2022 Notes").
2018 and 2022 Notes
BuildDirect Operations issued the 2018 Notes to Deans Knight Noteholders in an aggregate principal amount of approximately CAD $5,000,000 pursuant to a Note Purchase Agreement in March 2018. BuildDirect Operations and the Deans Knight Noteholders have agreed to amend the 2018 Notes pursuant to which: (a) the maturity date of the 2018 Notes is extended to September 30, 2025; (b) the interest rate applicable to the 2018 Notes is decreased to 12% effective October 1, 2023; (c) BuildDirect Operations will continue to make certain amended quarterly payments towards the aggregate outstanding principal amount of the 2018 Notes commencing December 31, 2023 (the "Quarterly Principal Payments"); and (d) a fee in the amount of 6% of the aggregate outstanding principal amount of the 2018 Notes (after the payment of the September Principal Payment, described below) will be added to the aggregate outstanding principal amount of the 2018 Notes and paid by BuildDirect Operations as part of such principal amount in accordance with the 2018 Notes as amended. The above noted amendments to the 2018 Notes are conditional upon BuildDirect Operations making the following payments to the Deans Knight Noteholders on or before September 30, 2023: (i) an approximately CAD $1.5 million payment toward the outstanding principal amount of the 2018 Notes (the "September Principal Payment"); and (ii) accrued quarterly interest on the 2018 Notes as of September 30, 2023; and (iii) a fee equal to 6% of the September Principal Payment.
BuildDirect Operations issued the 2022 Notes to the Lenders in an aggregate principal amount of USD $4,500,000 in June 2022. BuildDirect Operations and the Lenders have agreed to amend the 2022 Notes pursuant to which (a) the maturity date of the 2022 Notes is extended to April 1, 2026 (b) the interest rate applicable to the 2022 Notes is decreased to 12% effective October 1, 2023 and (c) a commitment fee payable in relation to the 2022 Notes is, effective September 30, 2023, increased to a total of 2% of the aggregate principal amount of the 2022 Notes and which fee is payable upon repayment of the 2022 Notes.
"We are pleased to announce these amendments to our debt, which extend the maturity date of the 2018 and 2022 Notes to September 2025 and April 2026, respectively, result in the payment of approximately CAD$1.5 million toward the outstanding principal, and decrease the interest rates for these Notes to 12%, enabling us to achieve approximately $350,000 in interest cost savings annually," said Shawn Wilson, CEO of BuildDirect. "A key focus of our company is to maintain a healthy balance sheet and these debt amendments will allow us to continue reducing our outstanding liabilities efficiently while allocating more resources to driving further growth in our operations."
"I am excited to report that these debt amendments do not include any new operational covenants or pre-payment fees or penalties other than as disclosed," added Matthew Alexander, Interim-CFO of BuildDirect. "We expect these amendments to improve our debt to adjusted EBITDA ratio and may allow us to explore alternative debt or refinancing opportunities at a lower cost of capital."
About BuildDirect
BuildDirect (TSXV: BILD) is a growing omnichannel building material retailer. BuildDirect connects North American home improvement B2B and B2C 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. For more information, visit www.BuildDirect.com.
Forward-Looking Information:
This press release contains statements which constitute "forward-looking statements" and "forward-looking information" 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 press release may include, without limitation, statements relating to BuildDirect's ability to satisfy the conditions to give effect to the current amendments to the 2018 Notes, BuildDirect's ability to repay the 2018 and 2022 Notes and satisfy all terms therein, BuildDirect's maintenance of a healthy balance sheet, BuildDirect's ability to continue reducing its outstanding liabilities efficiently while allocating more resources to driving further growth in our operations, the improvement of BuildDirect's debt to adjusted EBITDA ratio and the ability of the subject amendments to the 2018 and 2022 Notes to allow for the exploration of alternative debt or refinancing opportunities at a lower cost of capital.
Forward-looking statements involve significant risks, uncertainties and assumptions. 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, inflation, 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 and other factors referenced under the "Risks and Uncertainties" section of BuildDirect's MD&A. These forward-looking statements may be affected by risks and uncertainties in the business of the Company and general market conditions.
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 press release 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 press release, and BuildDirect assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
Reference is made in this press release to the following non-GAAP measures: Adjusted EBITDA. This non-GAAP measure is commonly used by investors and other interested parties to evaluate the Company's financial performance and is employed by the Company to measure its operating and economic performance and to assist in business decision-making. This non-GAAP measure does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. This measure is provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, this measure should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS. Refer to BuildDirect's unaudited condensed interim consolidated financial statements and accompanying notes and our Management's Discussion and Analysis (for the three and six months ended June 30, 2023 and June 30, 2022), available on the Company's website at www.BuildDirect.com and on the Company's SEDAR profile available at www.sedar.com., for definitions and reconciliations of non-IFRS measures to the nearest IFRS measures. The disclosure under such financial statements and Management's Discussion and Analysis is incorporated by reference into this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information: Matt Alexander, Interim CFO, 1.778.382.7748; BuildDirect Investor Relations, ir@builddirect.com, 1.905.347.5569
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