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 months ended March 31, 2021. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.
First Quarter 2021
Revenue of $29.5 million
Gross profit margin of 11.4%
Adjusted Gross Profit Margin1 of 24.3%
Net loss of $12.5 million
Net loss margin of (42.4%)
Adjusted EBITDA1 of ($11.4) million
Adjusted EBITDA Margin1 of (38.6%)
Note: (1) See “Non-GAAP Financial Measures”
“Throughout 2020, we were able to mitigate some of the COVID-19 induced slowdown in overall construction activity through the completion of projects that were in progress when the pandemic started,” stated Kevin O’Meara, chief executive officer. “With most of these projects delivered by the end of the fourth quarter, we believe the first quarter of 2021 reflected the full impact of the slowdown in non-residential construction activity in North America on DIRTT’s business.”
“At the same time, however, we have been experiencing growing customer engagement through increased demand for both virtual and in-person tours at our DIRTT Experience Centers (“DXCs”), increased project quoting activity, and continued advancement of our strategic accounts strategy. We now have over 40 strategic account relationships in various stages of development compared to 35 at year-end. As a result, we believe the first quarter will be the low point in the pandemic construction cycle and are optimistic that revenues in the second quarter will approach or return to the quarterly ranges experienced in the first half of 2020.”
“Having remained committed throughout 2020 to the prudent execution of our strategic plan, resulting in major enhancements of our commercial and manufacturing capabilities, we believe we will be able to emerge from the pandemic in a position of strength to drive sustained growth. We recently secured our first project directly attributable to our Total Cost of Ownership tool, our qualified sales leads are growing, and our sales and marketing material is more comprehensive and targeted than ever before. We intend to leverage increased brand strength from our strategic marketing initiatives to drive sales growth, supported by our enhanced strategic accounts and industry vertical sales teams. We are looking forward to deploying the new competitive assets we have invested in over the last 12 months, including our newly renovated Chicago DXC, our Dallas DXC (expected to open in Q3 2021) and our state-of-the-art tile plant in Rock Hill, SC (scheduled for full commissioning in June 2021) .”
Mr. O’Meara concluded, “While the ultimate timing of a broad recovery in non-residential construction activity levels remains uncertain and COVID-19 continues to present challenges, we are seeing anecdotal evidence through our sales channels that business confidence, particularly in the United States, is improving. Through continued emphasis on our core value proposition of flexible and adaptable spaces, built with cost precision and on an accelerated schedule, we are confident that we can drive significant sales growth through our approach to interior construction.”
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”.