Now presenting Shawn Wilson with BuildDirect. All right, guys, looking forward to reviewing our business. Hey, first off, here's our highlights. If you want to know a bit about us, we're a flooring consolidator. We'll talk about the industry, the company, what we're doing, and it's a lot of fun. When you look at the company, the primary focus is really the North America flooring market. With that, there are some adjacent categories, but flooring is enough for quite a while. It's a $90 billion TAM. There are quite a few adjacent TAMs that really go along with it. The flooring industry is highly fragmented, highly fragmented in a way I didn't really appreciate until I got into it when I had lots of hair, long blonde hair. I was, I think, 16 or 17 years old. I was full of ideas and ambition. When you look at how it's changed since then, it hasn't. It's the same. Nothing's really developed much at all. In old-school industries, it's controlled by mom-and-pop retailers who, for the most part, were former flooring installers who signed a lease and got a building and kind of figured life out. Online, nothing's changed much there at all either. Most of the business is still done in stores. You have Home Depot, Lowe's, and then just a gazillion different mom-and-pop retail shops out there. It's really kind of the same thing in most building supply categories, which is great. It's right for consolidation and for people like us. The home improvement side is interesting. I was at Depot for a bit as a merchant. Even back then, the narrative was, hey, Big Box is going to eat up this category. It's going to all be a Big Box, Big Box, Big Box. Actually, it's gone backwards in Big Box. Flooring is a specialized purchase. I like to say I'm in the fashion industry because flooring is fashion. Makes me sound better than not. Really, nothing has changed there either. It's a very solid and stable industry. I've been through, well, three crises financially in my career and then probably one a week in the last month. It's a very stable category. Flooring is required building material. You can't get your occupancy permit without it. I like that. Second, it's highly tied to residential remodeling. Only a fraction of it, a small fraction, is tied to new construction, building, things like that. Like cabinets, countertops, roofing, siding make me a little more nervous because they're more tied to the ups and downs of the building cycle where flooring is not. Even in the housing crash, you saw a decent dip down, but life goes on. People still walk on their floors. They beat them up, destroy them with their life, their family. Plus, when flooring gets more and more durable, they ugly out, which is fantastic. A constant cycle happening in the space. For the most part, we are in hard surface categories. Some carpet, people still do buy carpet, contrary to popular belief, especially where it's cold. Not here. We're in all the categories here listed. For the most part, it's a very straightforward, stable category. People are buying the same coloration, style, and designs today than they bought 5, 10, 15 plus years ago. It is a noisy industry. The design channels and all the remodeling work, new brands, new this, new that, new kind of take on the same thing, which is great because we like to buy inventory. Inventory is a huge thing for our space. There is a lot of stability there really in that. Our focus is on the pro side. There are really two reasons why. The one I talk about more openly and the one that I really think about kind of privately. The first thing is on the pro side, look, when the economy is good or bad, they are going to find something to do. The pro contractor goes to multifamily, to commercial, residential. They are always doing something. They generate their own work. When you're attacking the retail segment, like the homeowner, it can be rough. You have a lot of major competitors out there driving up marketing costs, yada, yada. For us, it's all about the pro customer. It's consistent. Marketing cost is much lower. When you target the pro customer, something happens that's just absolutely magical. Your competition goes from being Big Box to just mom-and-pop because the pro customer across North America is served by about 12,000 independent mom-and-pop retailers. At our grand size today of around $65 million in our annual revenue, we are a behemoth, a monster in this industry, which is almost comical at times. It's great. The second part about pro is pro is code for you have to have it now, which is code for you have to have inventory. With the inventory, you have to have a building. The space we'll talk about here in a little bit on our acquisition side, that's been a very crucial part of our thesis. The companies that we are acquiring own their real estate. This is a weird, interesting kind of time right now. You had COVID happen, lots of flooring projects happen. People were nesting and doing lots of crazy things in their house. You had the government giving all the funding, PPP, then ERTC1, ERTC2, lots flown out there to business now. Business got hard again, challenging again, more difficult again. On top of that, these businesses own the real estate, which is a really important part when you're trying to work out a deal on buying the company. For us, I mean, we're a very tight team of operators. It could be a bit boring. We join our meetings, structured SOP calls. We run a business in a very kind of routine way. We're all about returns on what we do, whether we're making a small investment or a large investment. It's a core part for any type of business who is playing around in the world of M&A. You have to have a pretty strong team and also a team built for that, which we've done. Okay, now to get into a bit about what we look like. We have an e-commerce business. We have nine pro centers. I call them pro centers or warehouses where we do distribution to pros, retailers, large projects, things like that. We have a variety of services that we do with them. Our footprint is, I mentioned today, nine pro centers plus our e-commerce business, which is a really important point we'll get into in a minute. Look, I would be thrilled if this map was just dotted all over the place with these little red, white-looking dot things. For us, getting to a location count of around 75, 100 gets me excited. That gets you to a $500,000,000 company. It also gets you a fantastic footprint for expanding e-commerce and also adjacent categories. I should mention our pro customer, they're not just flooring pros, they're pros. They're doing flooring today, they're doing cabinets tomorrow, they're doing insert other categories. There's a lot of adjacent opportunities out there. For us, we had, what, five locations a few months ago. Now we have nine. We'll see how this year wraps up. For us, when you're looking at announcements, things like that, it should be a pretty straightforward deal. We're talking about us building a location or us buying a location. It just comes down to the math. On the model itself, we use e-commerce very differently. I've been in the business for a bit, and I've learned some hard lessons on e-commerce. You can get your head kicked in pretty fast if you use it in the wrong way. For us, we use it as a strategic entry point to markets. For example, in Los Angeles, about a year or so ago, we focused on e-commerce, built up a basic business, then we built a pro center. That was the best option for us there. Orlando, same thing. We just announced that one, which I'll talk about here in a few minutes. We have many other markets that we're actively using e-commerce to wedge into before we do a buy or build on the pro center. From there, there's some integration work, kind of things like that that we have to work through. It's a very kind of consistent, repeatable process. This engine has been built for this. It's an engine that's built to add locations through that approach. On the BuildDirect.com Buy, look, I personally believe if you're going to buy a business, you better be able to build one. You have to have an alternative, like something to keep deal heat at bay and to provide a really good alternative if you can't get the deal you want worked out. That's a big part for us. I'll talk a bit about the buy economics here in a second. On the build side, look, a pro center on average will do around $6.5 million. If you buy a business, that's four of them, and that times four. If you buy one, it's around $6 million-$7 million, somewhere in there. On the build side, takes a minute, right? Takes like five years to ramp up. The cash payback is pretty fast. Break even, obviously, is faster than that. We use that model as we're talking to businesses and we're looking at entering a market. For us, that's a really important part, and that's a differentiator you might see in our announcements. We might say we built a location from scratch. We might say we bought one and converted it. For us, it's just literally the math. For us, here's what gets us excited. We are first and foremost capital allocators. We run the company as if we're like an investment fund in the flooring industry, and our corporate cost is the cost of the fund manager. That's a terrible way of saying it, but that's really what it's all about for us. If we're buying a business, we get excited if there's a one-year path to one-year payback. There could be a plan for two. Anything over that, we need to talk because we like our brand, our systems, our procurement, our model, so on and so forth. When we're coming into a market, the only thing really of value that we're buying is going to be the not the people. It sounds terrible. Like bringing on the team as a bolt-on for us and also that team's customer relationships. With that, you're able to have a very aggressive approach because there's no intangibles or goodwill that's meaningful. No one's buying, we think, much better than us or has a brand that makes that big of a difference beyond what we have. This is what really drives us. Sometimes you get a little carried away. This kind of concept carries through to even small, tiny things. For our team, we're first and foremost focused on how we allocate capital and then what we do with it afterwards. On the synergies, there's two synergies that count if you're at our company. One, if you can pre-quantify a procurement synergy before a deal is done. That's a hard synergy. It's real. We have a time frame, and it's fantastic. It's great. We do a SKU by SKU. Also, marketing, we're pretty good marketers. We have a really good marketing team for our e-commerce business, which is one of the leading e-commerce businesses in the industry. Aside from that, very little synergies are pre-baked in. If we can improve the back end on maybe reducing headcount or being more efficient with X, Y, and Z, great. The economics to do a deal, none of that is ever priced in for us. We have to have a path for a one-year, one to two-year before anything like that. Our most recent transaction was Anchor. We announced this one about two weeks ago, I think, somewhere around there. About $6 million top line, EBITDA was adjusted around $660,000. The inventory that we bought was $593,000. We paid that for the business. That is what it was worth. From there, that business is almost done now being integrated into our pro center format. New name on the building, new samples, updated showroom, team super excited, great people. That payback will be pretty fast. This does not count the procurement synergies, which are probably for this business around 20 or so that will now kind of filter in. In this market, our alternative was to build. We were entering into Orlando market, Florida market with e-commerce. We got to a point where we needed to either build or buy, look for the right folks. This company was a customer of ours. Almost everyone in our M&A pipeline is a customer of ours today, which is great. That is how we know what these synergies could be. In this case, it made sense to buy this place versus building. The economics would have not been quite as good as this if we would have built, but definitely a pretty good indication. Based on time, I'll kind of wrap up with a few of these things. For us, like the last few years was all about getting the business in a really good shape and condition to run this play in a really tough market. The narrative a couple of years out, which I feel like is coming more true than even I would have ever dreamed, was, look, the industry is going to get really tough. These entrepreneurs are going to have a hard time operating. We have to use this vehicle, the BuildDirect vehicle, which the new team came in and really got into shape for this play. We have been very consistent since then with running a clean shop, great EBITDA, and continuing to find opportunities in the corporate platform to become more efficient. I think we are done on that side, but I do not know. Good ideas keep coming out. If we find a good idea to cut costs, we will do it. For us now, it is really about building first and foremost. Our share structure is a bit unusual for the TSX Venture. We are very tightly inside held. I will not get into details in this format, but most of the folks, including myself and my team, have cash in the company, like real cash in the company. We treat the company in that regard, which is fantastic. We have very strong insiders. The company had a long history of raising capital in Vancouver. With that, most of our insiders, of course, are out of that market, very supportive, and we've been pretty disciplined on the dilution side over time. On comparables, this one's tough for flooring. It's not really a close comparable, but companies that I like that really kind of get us excited. Ferguson's a great example of what we could be in the future. They're in the plumbing space. They're not up here, but ABC Supply is a good example in the roofing space. Really, like this business, getting valuations that are closely matched to revenue is very doable. It's effectively the same product of an even a multiple post-growth because today we still do have a decent drag on our EBITDA from our corporate platform. The true cost of being public was a topic yesterday. For example, that we have baked in that scales really well as we grow. With that, I'll open it up to questions. Yes. Yeah. What's going for an interest rate officer like Anchor? How do you see that as a competitor? I heard you were saying that there could be a lingering market. Have you ever seen any of that? Yeah, there's really two ways. Big box retail, like in our value chain, is almost more of a customer. Like Floor & Decor does import some, but they buy a lot. There's Depot from people like us. On the big box, I won't say too much too soon, but on the big box side, that's the example of a customer. I'm a huge fan of Floor & Decor. I love their payback model for sure, but they're geared towards a homeowner, which means they have a very broad assortment, class A real estate, and extremely frustrating approach for a pro. Same with Home Depot, Lowe's, so on and so forth. For pros who shop there, they're shopping like a homeowner. We have customers, homeowners who shop with us. We're not geared for it, but they do. It's great. It's fine. It's more of that. For example, our facilities, light industrial real estate, we get excited about having five or six bay doors, dropdowns, drive-ups, things like that, two-minute loadouts. Our average inventory quantity for a SKU, it's like four times theirs because that's the kind of projects that we do. I would say that's how we interact in the market. The same thing would apply to really anyone who's focused on the homeowner, if that makes sense. Great question. Any other questions? Yep. Yeah, it's an interesting question. They have, so there's two thoughts here. It actually really kind of speaks to our opportunity. First, there was a roll-up that was done by a group called Platinum. It was Artisan Design Group was the name of the company in the industry. You can look it up and see. Lowe's bought them recently for north of $1 billion. They were really focused on installed flooring, like large commercial projects, things like that. That business, kind of zoom out, has low inventory and a high AR, which is great for PE because you can factor AR, right? You can't really factor inventory. In this space, you can get hurt if you don't have outlets for inventory. A truckload of iPhones has intrinsic value, like when it's stolen and shipped somewhere. A truckload of flooring, it's remarkably off. You'll see businesses like clearance, they have limited inventory, 10 cents on the dollar because floor covering outside of a marketing program that's set and consistent, repeatable, is very, very difficult. On the PE side, it's literally the opposite of what they want. On our side, it's the opposite. It's exactly what we want. We want low AR. We want consistent, repeatable contracts, low risk, not a lot of customer concentration. The second thing we want is inventory because we are direct importers. Private equity wouldn't be unless they had that at kind of great scale. The next thing I would say is we are set up for helping the businesses transact. PE will come to you or even come to trade shows. Here's the 45 things you need to do to sell your company, like ERP, CRM, stop paying for your sister's car, like all that kind of stuff to get cleaned up. We're the opposite. We're geared to plug into whatever you want to call it, your ERP is. Could be QuickBooks, could be Excel, could be something more sophisticated. And we literally do all of it for you. We want to help the entrepreneur retire. That is the services we provide. It goes far deeper. We almost can do both sides of the due diligence at times on our front. That was the opportunity we saw is, hey, all these businesses have succession problems. They can't sell. They list with a broker. They don't transact. Reasons why was XYZ systems weren't right or so on and so forth. For us, fantastic. We're great at all those things. We have great people, great team. We set up that little shop inside and we're just burning through them. Yep. Yeah, the pipeline, a few thoughts, especially with the tariff noise, business has gotten a lot harder for a lot of these businesses. I kind of jokingly say I have to use a CRM now to keep track of our M&A pipeline. That's speeding up. A lot of great deals, a lot of great deals out there. I would say the deal for here we announced, this is what we get excited about, and this is what they look like in one form or another. It's just like, for example, if it's $10 million, it's probably two locations, so on and so forth. That's kind of how it scales. Yeah, very good. Anyone else? Yeah, there's one location that does a lot of large commercial projects. And that location is about $15 million. And that's the one outlier. The EBITDA is about the same because it's a large project. But for the most part, they're around the same volume. You run into this, it's kind of interesting because you run into these businesses and they tend to be around the same size. And usually it's because it's a hassle. Like if you're in Dallas and you're on the north side and you get to a certain point where you want to do marketing on the south side, you drop a building in because the traffic is so bad and pros don't want to drive everywhere. I would say the biggest, like the range you'll see is anywhere from 5 to maybe like a 10, but they usually fall in that range, unless they're doing something abnormal. Yep. Yeah, e-commerce is doing great. Our sales dropped off in the last couple of years from us scaling back e-commerce a lot. I think when I came into the company, e-commerce's run rate was around like, I don't know, $25 million, $30 million, somewhere in there, brought down to its knees as a team. We did that as we were fixing it and improving it. That's why you see the change in sales and the massive growth in EBITDA. E-commerce now is a great business. We love the business. It's doing well. If you make money, we like you. That business now can scale back up, I think reasonably bring that back up to former levels, but in a much different profitability. Like structure is very realistic for sure. That is a good one for us. It has a lot of leverage. I think we are all set for time. Nope, two minutes. Yeah, last questions. Okay, thanks guys. Appreciate it.