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DIRTT Reports Fourth Quarter 2023 Financial Results

DIRTT Environmental Solutions Ltd. (“DIRTT” or the “Company”, “we”, “our”, “us” or “ours”) (TSX: DRT; OTC: DRTTF), a leader in industrialized construction, today announced its financial results for the three and twelve months ended December 31, 2023. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.

Fourth Quarter 2023 Highlights

  • Revenue of $50.9 million, up 20% compared to the prior year period, representing the Company's highest revenue quarter since 2019.

  • Gross Profit improvement to $19.2 million or 37.8% of revenue in the fourth quarter of 2023 from $11.6 million or 27.3% of revenue in the fourth quarter of 2022.

  • Net income after tax and net income margin for the quarter of $1.0 million and 1.9%, respectively, compared to a net loss after tax of $(5.9) million and a net loss margin of (13.9)% in the fourth quarter of 2022.

  • Adjusted EBITDA(1) of $4.3 million (8.5% of revenue), compared to $0.6 million (1.4% of revenue) from the fourth quarter of 2022.

  • Liquidity, comprising of unrestricted cash and available borrowings, of $35.0 million at December 31, 2023 compared to $16.1 million at December 31, 2022.

  • Reduced long term debt by early settling U.S. equipment leases of $7.8 million during the quarter related to the previously announced closure of our manufacturing facility in Rock Hill, South Carolina.

  • On January 9, 2024, the Company successfully closed its rights offering for gross proceeds of C$30.0 million.

  • On February 9, 2024, the Company extended its RBC facility for an additional year.

  • On February 15, 2024, the Company announced a substantial issuer bid and tender offer (the “Substantial Issuer Bid”) for up to a total of C$15.0 million of a combination of the Company's issued and outstanding 6.00% convertible unsecured subordinated debentures due January 31, 2026 and its issued and outstanding 6.25% convertible unsecured subordinated debentures due December 31, 2026 (collectively, the “Debentures”).

(1) See “Non-GAAP Financial Measures”

Management Commentary

Benjamin Urban, chief executive officer remarked “Our 2023 fourth quarter results show the impact of positive decisions made in the past 24 months. We believe the rights offering proceeds will give DIRTT the opportunity to further invest in the business and focus on sustainable revenue growth”.

Fareeha Khan, chief financial officer, added “We are pleased with our fourth quarter results and going into 2024, we will continue to focus on our strategies for increased commercial activity while maintaining our cost structure. The reduction of long term equipment lease debt, the rights offering and the Substantial Issuer Bid demonstrate our commitment to strengthen DIRTT’s balance sheet. We continue to monitor the markets to ensure we are prepared to weather adverse macroeconomic scenarios”.

Fourth Quarter 2023 Results

Fourth quarter 2023 revenues were $50.9 million, an increase of 20% from the fourth quarter of 2022. The fourth quarter of 2023 benefited from several large projects compared to the fourth quarter of 2022.

Fourth quarter 2023 gross profit and gross profit margin were $19.2 million and 37.8% respectively, an increase of $7.6 million from $11.6 million and 27.3%, for the same period of 2022. The increase in gross profit margin was a result of realization of our improved product mix, improved labor efficiency and better fixed cost leverage.

Fourth quarter 2023 Adjusted Gross Profit and Adjusted Gross Profit Margin (see “Non-GAAP Financial Measures”) were $20.1 million and 39.5%, respectively, compared to $13.6 million and 32.0% in the prior year's fourth quarter.

Sales and marketing expenses increased by $1.1 million to $6.9 million for the quarter ended December 31, 2023, from $5.9 million for the quarter ended December 31, 2022. The increase was driven by higher commissions, higher variable compensation costs, and higher outside consulting services, offset by lower travel and entertainment costs and building expenses.

General and administrative expenses increased by $1.6 million to $5.7 million for the quarter ended December 31, 2023, from $4.1 million for the quarter ended December 31, 2022. The increase was primarily related to increased professional services costs of $1.0 million and higher costs of our facilities offset by decreases in communication and software costs.

Operations support expenses increased by $0.1 million from $2.2 million for the quarter ended December 31, 2022, to $2.3 million for the quarter ended December 31, 2023. The increase was primarily due to a $0.5 million increase in variable compensation offset by a $0.4 million decrease in salaries and benefits.

Technology and development expenses decreased by $0.1 million to $1.8 million for the quarter ended December 31, 2023, primarily related to decreased professional services costs during the fourth quarter of 2023 compared to the quarter ended December 31, 2022.

During the quarter, the Company incurred $0.2 million in reorganization costs, which related primarily to movement of inventory from the Rock Hill Facility.

Net income after tax and net income margin for the quarter was $1.0 million and 1.9% compared to a net loss after tax of $(5.9) million and a net loss margin of (13.9)% for prior year’s fourth quarter. The improvement in net income is the result of the higher gross profit margin, a reduction in reorganization expenses, a gain on sale of software and patents, and a decrease in stock-based compensation expense, offset by a remeasurement in the fair value less costs to sell related to the Rock Hill Facility assets held for sale, which resulted in an additional impairment charge in the period.

Adjusted EBITDA and Adjusted EBITDA Margin (see “Non-GAAP Financial Measures”) for the quarter was $4.3 million and 8.5%, respectively, an improvement of $3.7 million from $0.6 million and 1.4% for the prior year’s fourth quarter. Improvements in Adjusted EBITDA for the quarter were due to the above noted reasons.


We achieved an annual revenue of $181.9 million, a 6% increase over 2022 revenue of $172.2 million. We are pleased to report another consecutive year of revenue growth since the COVID-19 pandemic, and despite the volatility in the tech and banking sectors in early 2023. Our revenue for the fourth quarter of 2023 was the highest quarterly revenue since 2019.

During 2023, we built on our successes in 2022 with further balance sheet improvement ($24.7 million vs. $10.8 million cash and cash equivalents at year end), expansion of our Gross Profit Margin (32.7% vs. 16.4%) and Adjusted Gross Profit Margins (35.8% vs. 22.6%), reductions of our net loss after tax from $(55.0) million to $(14.6) million and expansion of our Adjusted EBITDA Margins (4.4% vs. (15.2%)). In 2023, we saw macroeconomic factors stabilize our supply chains and input costs. Our focus on sales and operational planning as well as process efficiencies allowed us to achieve significant improvement in our adjusted gross margins. These actions also led to reductions in labor and inventory carrying costs during 2023. Further, we reduced expenses in our back office and general and administrative overhead to levels commensurate with our current and expected revenue levels.

In the year ahead, we anticipate continued pipeline and revenue growth, but we also remain cautious about macroeconomic uncertainty and remain focused on preparing the Company for a variety of economic scenarios. The unprecedented pace of the US Federal Reserve’s interest rate hikes as well as geopolitical volatility in the Middle East and Asian Pacific have encouraged us to pay close attention to our fixed cost footprint and supply chain resiliency. The upcoming presidential election in the United States adds to this uncertainty and may impact the capital expenditure budgets of our clients. As noted in last quarter’s outlook, the first quarter of the year is typically our seasonally slowest quarter.

As post-pandemic workplaces continue to evolve, the ability of DIRTT’s solutions to anticipate and respond to an uncertain future is at the core of our value proposition. Encouraging access to our full product offering unlocks workplace transformations with more flexible and adaptable environments. Our sustainable product offerings, featuring low carbon footprint, high recycled content, and minimal waste, also enable our Commercial, Government, Healthcare, and Education clients to make meaningful progress toward their environmental commitments and goals.

On January 9, 2024 we successfully closed a C$30 million Rights Offering. As previously disclosed, we expect to use the proceeds of the Rights Offering for general corporate purposes, which may include investments in our business, funding potential future cash needs or operating losses, funding working capital and capital expenditure needs, or reductions to our outstanding indebtedness. We plan to use some of the funds to invest in our commercial business in all verticals, especially Healthcare, and are looking at additional opportunities and partnerships to support our revenue growth.

In line with our objectives for the Rights Offering, on February 15, 2024, we announced a Substantial Issuer Bid for our convertible debentures of C$15 million, intended to strengthen our balance sheet by reducing debt.

Conference Call and Webcast Details

A conference call and webcast for the investment community is scheduled for February 22, 2024 at 08:00 a.m. MDT (10:00 a.m. EDT). The call and webcast will be hosted by Benjamin Urban, chief executive officer, and Fareeha Khan, chief financial officer.

The call is being webcast live on the Company’s website at Alternatively, click here to listen to the live webcast. The webcast is listen-only.

A webcast replay of the call will be available on DIRTT’s website.


DIRTT is a leader in industrialized construction. DIRTT’s 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 workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes. DIRTT's interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve. Headquartered in Calgary, AB Canada, DIRTT trades on the Toronto Stock Exchange under the symbol “DRT”.

For further information please contact:

  • DIRTT Investor Relations

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