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DIRTT Releases Q1 2022 Financial Results » DIRTT Environmental Solutions

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DIRTT

DIRTT Environmental Solutions Ltd. (“DIRTT” or the “Company”) (Nasdaq: DRTT, TSX: DRT), a global leader in industrialized construction that empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments, today announced its financial results for the three months ended March 31, 2022. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.

First Quarter 2022

  • Revenue of $38.3 million
  • Gross profit margin of 8.6%
  • Adjusted Gross Profit Margin1 of 17.7%
  • Net loss of $23.0 million
  • Net loss margin of (60.2%)
  • Adjusted EBITDA1 of ($12.0) million
  • Adjusted EBITDA Margin1 of (31.2%)
  • Unrestricted cash balance of $38.9 million

Note: (1) See “Non-GAAP Financial Measures”

Management Commentary

“First quarter revenue was at the low end of our estimates but was an increase of 30% over the same period in 2021 and we believe mark a shift in activity levels as the pandemic moves to endemic with the easing of health restrictions across North America,” said Geoff Krause, CFO and co-interim CEO. “While the beginning of the year temporarily sent many employees back to their home offices and delayed return dates, we experienced a strong uptick in activity that began to translate into orders in March. Approximately 46% of our first quarter revenues were generated in March and we have seen improved sales activity continue into the second quarter.  March marked the highest revenue month since October of 2020 and the second highest revenue month since the beginning of the pandemic. Our twelve-month forward pipeline, including leads, increased by 5% to $318 million from $302 million at January 1, 2022.”

“In early April, we completed our final shift at the Phoenix Facility and commenced decommissioning activities,” said Jeffrey Calkins, COO and co-interim CEO.  “While this closure temporarily impacted labor capacity in April as a result of hiring challenges in Savannah, we are actively focused on increasing staff levels at Savannah and Calgary required to expand aluminum manufacturing at those facilities to support the activity levels that we are seeing build and to meet our delivery timeline commitments.”

“We expected high cash usage in the first quarter,” added Mr. Krause, “driven by the slow start to the quarter which resulted in working capital build combined with one-time restructuring costs and professional fees associated with the contested director elections. Full year revenue guidance is consistent with improvements in cash usage as 2022 progresses as a result of sequential improvements in revenues and a lower fixed cost base, approaching monthly cashflow breakeven in the third or fourth quarter of 2022.”

Mr. Krause concluded, “As an organization, we are relieved to have the proxy fight behind us and enthusiastically welcome our new board of directors. It is with the unwavering belief in the opportunity for DIRTT, in our employees who have repeatedly demonstrated extraordinary resilience and loyalty for our company and in our partners with whom we are grateful to work with every day, that Jeff Calkins and I assumed the role of co-CEO during this interim period. We are also pleased to announce the appointment of Jeffrey Metcalf to interim CFO, effective May 9th, 2022, to enable me to better focus on my new responsibilities working alongside Jeff Calkins.”

Ken Sanders commented, “We have been humbled by the support from the employees and partners during the early stages of the transition to the new board of directors. The board of directors is grateful for the commitment and leadership of Geoff Krause and Jeff Calkins who stepped up to the role of co-interim CEO and, along with the rest of our very talented leadership team are providing strategic insight and strong guidance for developing the path forward for the organization. The CEO search process has been immediately prioritized and we have picked up and accelerated the Company’s search process already underway. We anticipate being able to welcome a new CEO by mid-year.”

“In our early observations, we strongly believe that together with our leadership, our re-energized employees and our partners, we can unlock meaningful value for shareholders, customers and other stakeholders under the stewardship of the new board. We have confidence in the financial guidance provided previously by the organization and believe the second quarter revenue range between $43M - $47M and full year revenue range between $175M - $185M are achievable” Mr. Sanders continued. “On behalf of the board of directors, we are enthusiastically looking forward to leveraging our industry experience to be of service to DIRTT in promoting its growth and financial performance as a public company.” 

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About DIRTT

DIRTT is a global leader in industrialized construction. Its system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the commercial, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes. Headquartered in the US and Canada, DIRTT trades on Nasdaq under the symbol “DRTT” and on the Toronto Stock Exchange under the symbol “DRT”.

 

 

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