DIRTT Environmental Solutions Ltd. (“DIRTT”, the “Company”, “we” or “us”) (Nasdaq: DRTT, TSX: DRT), an interior construction company that uses proprietary software to design, manufacture and install fully customizable environments, today announced its financial results for the three and twelve months ended December 31, 2020. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.
Fourth Quarter 2020
Revenue of $42.2 million
Gross profit margin of 27.4%
Adjusted Gross Profit Margin1 of 32.0%
Net loss of $4.2 million
Net loss margin of (9.9%)
Adjusted EBITDA1 of ($2.9) million
Adjusted EBITDA Margin1 of (6.8%)
Revenue of $171.5 million
Gross profit margin of 31.1%
Adjusted Gross Profit Margin1 of 0%
Net loss of $11.3 million
Net loss margin of (6.6%)
Adjusted EBITDA1 of ($7.2) million
Adjusted EBITDA Margin1 of (4.2%)
$45.8 million cash balance at December 31, 2020
Note: (1) See “Non-GAAP Financial Measures”. We have revised our calculations of Adjusted Gross Profit Margin and Adjusted EBITDA for the periods presented.
“The COVID-19 pandemic brought swift and severe changes to the construction industry in 2020 and DIRTT was not immune to the resulting contraction in commercial construction activity,” stated Kevin O’Meara, chief executive officer. “We benefited throughout most of the year from the completion of projects that were underway at the beginning of the pandemic. However, with continued lack of clarity on how COVID-19 and associated restrictions will evolve, end customers remain reluctant to make firm commitments on new projects. This dynamic began to impact our activity levels in the fourth quarter of 2020 and has continued into 2021.”
“Nevertheless, industry forecasts are predicting commercial construction starts to recover slightly this year and conversations with distribution partners and end customers support the view of strengthening market demand beginning slowly in the second half of 2021. The pace of the recovery may be dependent on the success of vaccination programs and the ensuing confidence of end customers to move forward with projects. Longer term, we continue to believe the pandemic has brought greater attention to how organizations design and build, and we see evidence that it has heightened the need for the type of flexible and adaptable spaces that DIRTT provides.”
“Despite these challenges, we have continued to transform DIRTT through the prudent execution of our strategic plan. This included significant progress towards our objective to develop a robust commercial organization, attain the continuous improvement phase of our operations, and innovate advances in our ICE® technology and solutions suite. Further, in January of 2021 we secured additional liquidity through an oversubscribed offering of 6% convertible unsecured subordinated debentures that, combined with our existing strong balance sheet, we believe enables us to continue the transformational investments we have made while ensuring flexibility should a recovery take longer than expected. We believe these achievements position us to deliver sustainable sales growth when the non-residential market begins to emerge from the pandemic-induced downturn.”
Mr. O’Meara concluded, “Our focus in 2021 is to continue building out our commercial team and to leverage the organizational strength we have developed to drive sales execution and increase market penetration. We remain confident in the strength of our business model and approach to interior construction and resolute in the execution of our strategic plan to drive the Company to achieve its full potential.”
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”.