DRT.TO - Earnings call 1 2022 | Dirtt Environmental Solutions LTD

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Operator

Welcome to the DIRTT Environmental Solutions 2022 Q1 Financial Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Kim MacEachern, Director of Investor Relations. Please go ahead.

Kim MacEachern

Thank you, operator, and good morning, everyone. to first call XXXX today's to discuss quarter DIRTT's results. Welcome

These and are on DIRTT's DIRTT's Krause access prepared the the from slides. me view web on by Canadian Ken are co-interim this within Calkins. accompanied remarks the call statements company's Geoff will include and slides, States expectations and they webcast United Joining To forward-looking Chair; page today and Sanders, or of based on presentation of are Today's our website. statements Board securities intent, current not newly laws. CEOs them of please Jeff the future Today's the appointed applicable are call projections, meaning performance. guarantees

Form XX-Q also to filed X, be and that available reconciliations call Securities Exchange information will turn Eastern with results with May approximately this is and non-GAAP as the reference today replay to this Time. I of statements XXXX, for I at SEC addition, filings GAAP or regarding over reports excluding and like Krause. X:XX Geoff will remind forward-looking other our SEC, special recorded, a the the and to now Commission, results, on In reference non-GAAP items. webcast p.m. you being and would will call Please results.

Geoffrey Krause

and appointed of Directors. Board everyone. operator, Today, conference newly the we Kim, morning, you, and good first Thank with are holding call our

now the start and turn is to Joining to with Chair, Jeff me will Officer is Chief Sanders, remarks. off our Sanders. Operating over It call Interim my call today Also is Board Ken me Calkins, our his the who co-CEO. joining pleasure today Ken

Ken Sanders

a Chair DIRTT's and Board. newly of today join Geoff, you to welcome, pleasure Thank everyone. elected It is you, as

built to I Managing the launched think, Gensler, estate imperative. the real when become you didn't Principal Board increasingly embraced embodied are today most And industrialized As to thank to before. I important since first is involved, and both. follower had more more hesitate. My and I been global I've And is well think builders than tell to And environment opportunity first for I positioned designers urgent and advocate DIRTT a I message also the say our participating Calgary, time as last Most and ever its by mass meeting spent our our and our product team, people developers, an prefabrication, amazing hall construction town don't executive at company of DIRTT. in people need XXXX. owners, you DIRTT week at a customization Board in is technology-enabled with partners Reducing the being with as in a member tenants, former that there. and of well carbon in

on behalf believe, DIRTT's but to we recent toured through truly got partners We been only years, proxy in our hard CEOs persevered were COVID not at and passion you, of much so of people clients. of the and and I met impressive multiple our well. also loyalty our Calgary. very have and have contest, work talent, all Through Board the tell Directors, factory people not did whom serve of that, the a They inspiring. over I And them several stayed and also the past

outcome a continued you of thank Board is letter So commitment new proxy grateful wrote our want I'd for at say call the to with repeat else. to along I to They, our have partners. their been also to this patiently company. I like to what this contest everyone that the on in everyone week waiting DIRTT extraordinarily too, last for

in forward partners months the look I over businesses well on thanks. deserve and industry, a met to about the for and X week. the the acknowledgment Our many call as their we partners of come. The are as ever, than them I've more of learning I across also DIRTT and me to past relationships them them share the important weeks special with loved reason. meeting and today more we that to individuals many call

Jeff Geoff co-CEOs. The our Krause first Calkins, and interim X are

neither have April Tuesday, at And on for to personal focused our the and our mentioned professionalism, commitment, now, commitment providing is permanent we candidate for leadership Board CEO this the continuity time for and DIRTT. Right are all I and the knowledge a of I position, While X company's the business, DIRTT we and to is to time. at enough their at as the intention and at I them company. public growth last company. as believe the simple, important thank and Kim its promote this already fortunate the governing to the which for our press XXX% table that exists cannot integrity want their performance XX, is on my are ongoing company in unlock detailed I shareholders' MacEachern. financial colleagues release potential first acknowledge of a all thank new meeting also met of

days X, priority to focused permanent highest search So CEO. to in, outline our to you Slide our the turn is X priorities are like want if we I'd a on. And for

the already We and new underway up search our have from accelerated Board. have insight additional process it, picked including

the and to market-facing for process seeking of and perspective, energy Board's We inclusive DIRTT. ensure term. also the deep collaborating with talent, successful who a the harness employees industry the passion company's are with is and closely of the partners leader the long incredible and From amplify knowledge, are can team sales-oriented the we leadership both

secondary manufacturing. Our is focus

of Now up. But supply-constrained release the improving March talk about contest. on in Jeff past press now a later speak third, Geoff business. back of will I constrained briefly Geoff, are will facing more may Smed, comment X, Loberg Krause rather litigation coming Barrie in that and about And the like DIRTT of which before been between over Falkbuilt's the we're the detail proxy the health will it to financial years. in to the focused and I call. to than I'd noise environment on hand have seen the the you ongoing that Calkins also demand we Mogens one refer several others. our we've lost

is were X in have our a on I a company last damaged the to and Our companies, the DIRTT. visionary DIRTT the your agreements. litigation to case. of part keep clear, promises And sworn and those resolving based Queen's you we legal has when founder respect general, welcome record, agreements. Bench be as disputes. But testimony by read life especially of to have to in evidence shared promises, submitted a have that business Mogens publicly, in in everyone we to signed Alberta from And for of is resort believe and including memorialized and us, have, be of enormous now are including and as We affidavit I believe Mogens we the actions many believe submitted believe signed including also Mogens. others public that the And should strong both affidavit of their has contrary conduct been already myself,

continue. will litigation that So

Our fiduciary the our partners our interest responsibility protect to will as and so a Board of vigorously. and do we has shareholders employees, well as

like the new its over would turn serve grateful this all on speaking in conclusion, for stakeholders. And of company of So DIRTT's call now the innovative Geoff and back to to to Board, are that, Krause. opportunity we with behalf I

Geoffrey Krause

Thanks, Ken.

team confidence Mr. the leadership First, our vote and I by are as our humbled Calkins of that by I'd like of new Board, our to take start employees our and positions. new saying we

hopefully, of my focus We order. Interim new as we to the and responsibilities. Jeff I'm our better new in are not interim on success onboard believe effective allowed so of period, Metcalf short me to Financial both as only in, CEO May highly committed the pleased DIRTT this announce also Officer, allow to Monday, X, Chief through -- it to but appointment

Jeff. congratulations, So

Turning X to Slide now.

of in with as Canada what with to work-from-home North to the activity providing results Let's U.S. little our with attention easing the review year, financial transitions at related America shift close first hand. the happening to including reflected I'm our will it quarter. Broadly impacts. the and our the operations the the and for for start our including after commentary overall discuss restrictions, going which outlook up health on the Calkins sales a was mandates I'll pandemic and quarter revenue color of a broad levels, Jeff business current speaking, by environment endemic in

from While sent many our began due temporarily the of company since to to of March in and generated marked March, vertical. in back for infections employees its orders of the COVID-XX beginning uptick translate month and revenue XXXX XX% to and beginning be the since growth, exact. the the their which offices year driven opportunities resurgence revenue the was 'XX. Almost the of Omicron and an partners pandemic, October largely home in of variant the dates, into to at DIRTT highest planning QX highest our This activity experienced the return second commercial delayed half

activity the virtual, seeing DXCs, telling these QX in We last and exceeded levels within into are physical At and our time, our us and they QX in both the ever. busier are are same than that those partners QX year. second continue tours quarter,

January including $XXX This growth us Our forward million and between million, $XX between increased X, sequential pipeline, of XX-month to QX leads, led to to has XXXX. XX% million our million of also guidance $XX XX%. from $XXX X% at representing by

'XX now approaching XXXX. be $XXX between quarter a as base, of progresses flow increased And result a in sequential in also and or the in as targets We cash year third expect improvements to our revenue monthly full cost usage fixed improvements lower $XXX and breakeven cash fourth million of million.

network As broaden our Ken committed and taking partner steps our our effectiveness noted, been remain communication. improve our enhance and we have highly to to relationships,

a a overall important further within to headcount for was our in and initial from XX February of will we to our account We, in feedback operational and step This the council, XX we representation our first perspective, and it evaluating. overall and comprised refined of where first next week XX, organization the partner initiative. From reductions council to other on support our to providing time along decision-making. as council the of XXXX, Chairman, with and again partners across The partner feedback strategic meeting have provide critically as a elevate with advisory America, result well quarter, to established extensively that provided first our to commercial as establishment advance continue insight the our targets met as our been of of we geographic increase focus. cadence certain this objectives directors, be North and XX March vertical the

product During the accounts. XX revenue, totaled of million with quarter, sales to to delivered of $X strategic or the accounts XX XX%

develop Jeff to and Calkins turn over For of to we XX the activities. and it comments related the identified now our with opportunities XX to provide XXXX, operations have remainder continue of on accounts. I'll

Jeffrey Calkins

you morning. Thank Geoff, much, very and good

Geoff's certain and and April, the thereafter. When Savannah. additional Ken inventory and aluminum is -- by our expand of the plants and on up Phoenix operational the the the space. the pick with we decommissioning of Calgary having provide shortly our on be to final to the the subletting side. like move closure some and This plant, comments we and of to pieces Rock In included for commenced to to second manufacturing in and complete to accounted of anticipate other redeployment the I'd and production X. of Phoenix Decommissioning aluminum Slide we end aluminum completed aluminum we XXXX, decided ahead manufacturing completed of frame activities. expected to sublease of equipment Calgary shipping be rationalization at to Moving comments facility Hill, shift quarter

accommodate have We and accelerating to This line to pipeline also order be increased accommodate in in Savannah. fluctuations. staffing able Savannah. the handle is challenges activity, to but order in hiring increased In sales have sales are more the Calgary, both time we faced timing volume to our successfully

of in our Completing meet recent our saw to delivery manufacturing us in March. and to we will flex workforce evenly quarter revenue of the distributed allow instances throughout during quarter, expansion in hit first the Savannah volume not our the As discussed where XX% commitments. revenue up in our we filing the is

Hill and of Rock that include thermofoil the part to production second are out end manufacturing our facility panels. we plan, We quarter. first As back-painted enhancing in by of of anticipate the our glass capabilities

thermofoil and X facility Calgary, in a will that time Hill the our cost of our customers back-painted from address well reducing as and supply result, as As to second by be shipping to Rock and Midwest to East and distance, from glass we able ship chromacoat, of the greatly like the chain end the and pressures. quarter. I'd utilization physical increasing supply perspectives; inflationary panels

density for We are experience and and continuing aluminum medium extrusions constraints rising to fiberboard. supply costs both

commodities supply inventory both inventory to new we We aluminum we on are first currently adequate existing suppliers do in ensure note overall working we aluminum supply with in this constrained, demand. increased position the to be on good that our could -- quantities excuse and inventory hand. hand rising proactively with meet when are me, adequate of and identified and quarter I

While sharp increases input for part overall of are times, lead China. in costs in and items ocean American response costs, sourced currently shipping sourcing hardware our small is a to North in pursuing we hardware

increased to well price continue shortages. We supply of continue as pressures inflationary costs. our impact to and In prices tensions driven experience trucking all the the global energy on midterm, upward expect by raw near as pressure both material to of we on labor

to financials. Geoff strategies now where to We appropriate. to I'd the through over call turn go will and continue implement the back Krause like to assess mitigation

Geoffrey Krause

Jeff. Thanks,

the was the mentioned unevenly slow in to our marked the was for increase to year previously, or XX% had $X.X XXXX. activity of March quarter as saw relative quarter an I first quarter Revenue of January and distributed, first X. consistent and Slide expectations to and $XX.X from throughout Revenue with as increase February. million, a million Turning start in the we a

period for for Turning gross from quarter for the adjusted margin in XX.X% to XX.X% to XX.X% period same decreased from to similarly, declined same X.X% the profit Gross XXXX Slide XXXX. margin profit and the X. in

much experienced of the experienced realized in transportation with and largely As we've the a second raw XXXX. cost driven the increases by significant prior discussed effects of half of quarters, pandemic, in packaging, in of increase materials, the we've the

During effective X.X%. XXXX, transportation we percentage gross dynamic, which new approximately profit as materials, packaging as prices quarter, approximately impacted orders the November and by increased a negatively increased X%. In first revenue was by to costs, on of XX, this response

increase. quotes revenue only in result quarter process, reflected of first As of however, price honoring for a price projects XX% that

increase, the period the QX. Further impacting reflected additional and the of the depreciation South last profit and improved revision cost June an QX X, November fixed increase X% to as facility our year leverage a compared facility, opened effective was that the second partially to useful were to revenue amortization cost offset should which price expect the in We a higher including activity. as of Carolina the fixed due impact and percentage be of price by that in orders Phoenix recognized in lives result of begin higher should gross increased incremental assets, was prior to margin

increased benefits quarter DXC, Looking and and primarily the on headcount the costs was to announced March travel third X. XXXX. of related an for related million on by reductions and increase and eased; at a the a $X.X increased entertainment have million were by due breakdown February. of in to salaries million decrease restrictions which operating XX, a activity as volumes costs commissions expenses sales the increase travel, These million of $X.X higher increased to to Dallas $X.X Slide expenses $X.X in meals has in months ended Sales and business opened X facility offset in which XXXX, marketing related expenses to in largely

DXC due $X.X administrative incremental also announced increase development million increased Rock million completion with facility ended capitalized March the of General decrease benefit $X.X for related and expenses to for cost directors, offset million Hill months March expenses election of XX, contested the $X.X the professional million the due a 'XX. million manufacturing million Operations months internal to and The to was costs XX, 'XX, support $X.X X to Dallas projects to lower X X salaries software and the months by and increased $X in last of million February. increased costs. to in X -- primarily 'XX, which for ended March $X.X to decrease the capitalized Technology as headcount $X.X to million million by ended year. XX, reflects development $X.X expenses related a in the decreased by fees for

expenses. to I'd which incurred transparency, the like which million nonrecurring are cost Note included reimbursements be in $X.X related cost total of the the to shareholders. The director $X.X to before was XXXX expected incurred of payments costs about contested date incurred of in $X.X to million, 'XX. quarter and election, $X.X categorized $X.X out and call operational share election in quarter reorganization our directors exclude to the clarity both that date first For and these million is incurred XXXX, of the separately director cash approximately the million and expenses former to to of of in second contested for deferred are costs our any million units

As various In anticipate February, $X.X million. of the second announced additional including incurred first the from million. In Phoenix $X.X in closure recognized facility. we quarter, expected, the we we reorganization we an costs initiatives quarter, the

addition, on an the of XX, Board additional million April, which In change as charge incurred in control insurance categorize on reorganization we XXXX, $X.X costs. will for we April incremental of

to and did adjusted in $X.X XX.X% million Slide fewer directors, due quarter capacity million a same which of loss by negative costs $X.X reduction of from million and offset increase benefit adjusted the XXXX, and in or of activity, in which headcount salaries XXXX, sales, million to not costs of $X.X to quarter increased expense internal due capitalized to reductions. of first entertainment million the $X.X underused travel higher costs projects, lower incremental in due a fees $XX $X.X decrease of reoccur costs, On in XX.X% professional negative gross election adjusted loss and $X.X contested for EBITDA related EBITDA decreased million million margin period reflects million to primarily the XX, or profit, of the a $XX.X commission

we've adjusted EBITDA. million excluded from of reorganization $X.X calculation As costs in a the reminder, the

$X.XX net million expense, per $X.X XX, March net months costs, quarter gross ended of million operating March a loss loss X months loss loss in described interest X share a or previously, government incremental expense, increase $X.X a a loss XXXX. XX, in ended XX, million share for million a decrease $X.XX increase as fees in and for XXXX, to in increased decrease $XX.X is net primarily foreign or $X.X loss the increased of result in $X.X the reorganization a from exchange million Slide million $X.X $XX net profit, the million of increase a in million On including the per of $X.X $X.X million subsidies. professional The

this XX. finished quarter million $XX.X cash $XX.X in unrestricted Slide December to of that $X.X of capital combined of restructuring with onetime the Net operation the contested million increased about $XX was end million, XX, cost levels was included XXXX. We with note at the capital quarter Turning of end Cash of noncash to director election at the used I million. $XX.X million. usage $X.X the by million compared the at working working driven activity costs. quarter, and

lower sales. costs. Days deposits than terms credit March million receivable XXXX, We year cash working in the normal $X.X Net expect and balance outstanding base $XX.X improve higher cash restricted due sequentially income higher of net sales capital million XX the as due our to includes was and cost usage disproportionately undrawn improving throughout reduced per the million to of cash at restricted taxes $XX.X days, to and facility. March fixed onetime XX, was revenues, and a

XX. at X.Xx was to XX December X.Xx March at ratio current Our compared

expected look my of we the we reiterate $XX million second $XX to forward revenue an To to have million. confirmed range as comments, previous quarter,

be For million. XXXX, million we $XXX and revenue year $XXX anticipating the to full are between

the monthly cash February, reorganization adjusted balance are in behalf is very workforce a with and a reduction closure initiatives loss. Net usage improving and in expect to we flow Phoenix with conclude beginning of of us. cash QX the be announced quarter see QX. In faced are Jeff thrilled we usage to final of and we hope other On be in myself we to have the approaching Calkins, we we working the of of of in facility the XXXX breakeven what and quarter cost cash the and EBITDA through behind believe adjusted second a or that challenging As Board conclusion, loss. revenues loss the for with account a our in Directors. distraction of our lot EBITDA corresponding We new recovery guidance to improvement we happy

on opportunity tenure, short there and has a open During can front within now the to for fresh the the their of tremendous forward capitalize moving call us. Operator, questions. of energy been resurgence on a in we perspective company

Operator

Craig-Hallum [Operator Capital question comes Instructions] Group. The first from Palm with Greg

Danny Eggerichs

to I April And This the color is million Eggerichs, for very I demand guess and of kind off, of guess levels. Greg remaining then I $XX.X the of March on quick April the implies on kind Danny appreciate March. trends. with at math kind today. start similar in about

QX or and just is be of guide, I So math we on Is how some thinking May kind that in step guess, my maybe if that about based right, implies June. down the that should a there? color

Geoffrey Krause

Sure, it number facility. obviously. does your was on. of the of out March opposite. Phoenix for pre-closure our exactly actually bang is What We That's -- came March

Moving labor shift of into And we production and to May June. ourselves that constrained we're into April, found April. in some slightly forced

increases revenue have seeing in and revenues results number would are in May in lower what June, which you Xx in the March. than seen a We

and are as moving capacity in we is forward. seeing accelerating activity are have addressing in uptick well as in labor the we we and accelerating Savannah the Calgary As actively an as Jeff for that noted, what that so

activity, Phoenix things So but a seeing we over we a of closure and good bit moving little are the of the of it, and bump uptick all between are forward.

Danny Eggerichs

Got it.

on to similar on March isn't basis? necessarily April activity apples-to-apples revenue commentary a that So

Geoffrey Krause

to continue side the which within on facilities. is us labor us the increased drive side sales and It's to the our which correct. the order of -- levels giving equation, gave confidence and That's

Danny Eggerichs

makes if real quick. on just accounts hit I could sense. Maybe That strategic Okay. the

you the tell million strategic looked it about new from strategic orders $X What like can Are from accounts. these those? of I us quarter in revenue or are think repeat? these

Geoffrey Krause

which accounts, going a through second is are greater $X facility and large servicing currently million, a than our is being very combination going to we first both. in quarter of had we've in large quarter. It served the order, orders clients. which are in We It's the as serve to where of smaller we strategic a those ongoing also part those through that service so continue past

combination foundation business provide stream general, an as So the them. because our larger excellent we provide are our it's they of for a an they a we're they continue looking In service as two. accounts, at footprint and do ongoing strategic to much

Danny Eggerichs

Yes. just it exactly remind defines the a reduction XX. And then maybe locations? us strategic to from And of drives? Is it Is on account? number a what of potential revenue rationale it that bit XX little

Geoffrey Krause

For sure.

to XX headcount general We within footprint. range, account entity perspective, size financial an Fortune we has the part strategic is we them real relates size their large typically in strategic really of from reduce headcount drive smaller reduce projects jurisdictions across North to their of area. -- their a XX and their that So although call did large the really some we that multiple organization the the that. management it regions. The and is ability which to of of within partners as various their smaller We that headcounts. our or a so America, that from of can are a type estate reductions did, some than did some there accounts, that within reduction -- the XXX, But breadth footprint, are of kind footprint, in crosses very a that nature,

that and to within a making highly within be engaged of group, have more this be part strategic have. that is truly sure focus think that that these with we accounts we I group important effective

focusing So better. sometimes is little case a we bit a more is not This ourselves are more. where

Danny Eggerichs

level, me. couple is this all I stuff the more the last focus the saw here. Okay. a you I a Ken and or areas know, were high points pain for one need where behind main us, a guess for a change maybe don't what or there was proxy improvement? guess the one of mean, Board full from of question then maybe I And at I new with

Ken Sanders

permanent That's more think that. little sure. of a great I the color I And to priorities, a getting outlined add of X CEO Yes, sort our bit could question. I urgency a top onboard. including

I think three characteristics really important. are

is value. And leader industry at design complicated again, And building and of a The mentioned, the I understands again, someone can our all and our cheerleader is for who someone is collaboration And a with strong and be for business and I who build sales relationships think, employees who construction and top deep people, partners our the knowledge and we and the at market-facing cultural who sales-oriented clients. importance company. need As delivering the the a business, of can partnerships amazing its nature. I also, innovation list. our team, think

value And it for are to foundation as more be Board, we DIRTT, those going believe to put we the think, place create related more our strengthen we sort and something I are that's simply, have of three to do a and ways characteristics to to great forward. important clients. want And shareholder-friendly. to that So want continue that CEO We nourish in differentiated in innovate want search. at a to more client-friendly, continue partner-friendly we and

Operator

Merer Rupert comes National Bank question with next Financial. from The

Rupert Merer

and enough put And you've what's year have the Geoff, be through. next those the do we on of the you increase of the more that progresses? margins about Have impact price increases you couple net over business, on should expecting inflation talked few impact should side? you as to you've of the quarters? expect Or So the put a through price

Geoffrey Krause

increases that material upward. to if along. expect our price situation. will as prices to like to everyone of be else, the commodities to it continuing they with we're we monitor moving are So We look continue would that fair capture move -- Clearly, raw we upward, move think I

I catches than XX%. it our -- higher that equilibrium of as is percentage a moving as out situation. of to increases, up pricing higher price to expect move will The and forward, settles we Historically, this fluid a our materials back has been certainly raw and as will So pull revenue. an number slightly it. the about cost that we run inflation as and better as then forward, ongoing have

sit So I on think where it. that's we

think is we a us key increases price part forward. put have I for

A partners partners can we in working enough not not increases disruptive to is, us our a to that's to our expected disruptive have such and think I we as forward. do coming for that with basis notice ours. do price in this, key business this collaborative manner and a their partners providing part our

Rupert Merer

that, or is feel you to have, chain price challenges proposition do and through Great. the your competition evolving increases put some you've of And with then relative think value compared Do you the related your with the the the industry, or supply to construction? and better compared to chain does worse in the making to inflation inflation does DIRTT? supply your it is -- industry, your situation issues for incumbents the you how how how

Geoffrey Krause

actually actually there's And that think not the pressure. DIRTT. it's X things making for just inflationary better are I it there's

pressure, As I competitors inflationary space conventional now in that is the and be right buy. need primary said, modular the which -- is in remains price be it the our think everyone customers I be the front. is construction, factor equation, competitive is competitor. it experiencing only be which But ourselves, it don't We other in to having

are factors lower our for and fact, it's looking of that the I customers customers In think looking are one for.

their are you health at dates seeing delays. seeing them, care are here back construction is looking result to X construction times, which getting are office the means movement pushing of parts constraints time, customer. out what's coming a spaces, uncertain the other The an construction in for are on-site construction their occupancy is in and flexibility in which spaces end that customers hit them. schedules as squeezed places key other which Commercial into into back supply are And costly

of DIRTT, and from provide given the into certainty where the a on ICE order, the what that plants and we cost key how parts take I world we cost perspective, can interacts As do with you given the you. all that at very all delays, things bonds those previously, conventional is creates we've and which talked than a different see things of orders, sorts dynamic change coming those about where

times lead incredibly our is important. piece second are The

Our customers have told they're important.

have they are partners told Our us important.

and an it than product integrated can faster than can else. true. it can you be our so for faster subs. far And on your else up in because we That's aren't deliver space product us, And product, relying far stand holding anyone anyone because is

think of to you think are third very means space design later. flexible. is for have and for you can you can value be, change of I is prop part spaces design you tomorrow the flexibility to And our today our going our the what that it don't

indexes, definitely normal I the that things. what going occupancies think I that's in up, rates -- It's our COVID people in tailwinds sales on translating of think the as we're that we our go work or to that's is the hybrid sorts look as And overall seeing much like, of new becoming in more workspaces we're back uptick favor. like, side. and are which activity all seeing important those to looks what enter

Operator

Linsdell question iA from with next Neil comes Capital The Markets.

Neil Linsdell

if you can into bit more insight sales Just wondering or color provide a little mix. the

and the which what especially, versus customers, years? So and previous about geographic new you're serving anything in we've industry if location customers seeing, of kind than customers existing that you're thinking I'm seen or different of any really

Geoffrey Krause

Yes. Thanks, Neil.

are both seeing as into are and new a we -- as come side side. even the seeing customers business, on bunch last our over the manufacturing of well tech health week, we the So care

I to and helping that new also customers of and there's drive proactive result customers. who getting And to different is are new that base, who invest. have that We we there with more the of are them have a been to who a seeing our have activity. lot brought into are some have watching very that out access some and of partners customer Part ecosystem, of traction a invest, of think waiting we been

of it equation, year, near has side the XXXs now up My the prior amount, that Fortune pretty commercial back and our on going continue. we things. That it, that to but of is we're most the revenues were consistent sorts relative uptick to people now, term seeing have of people in understanding to their Year-over-year, where right been the seeing with back the easy, As to biggest is we're and XX%, the return that comp commercial up is coming is are relates now. work work. with those

sorts I you on. investments of that those of So and seeing are moving impacts think the

a geographics, above hit as were the where that restrictions in indicator from have shifted the U.S. perspective have That here XX%. just low is low In terms geographic key a percentage and eased. Canada-U.S. the ease think type We whatever XX% of to XX%, in and where XX started as revenue was to we I Canada point point of now

pockets a think of the improving. I more. is but are I know the starting the on U.S. the the lot in to open depending areas Canadian think jurisdictions are open jurisdiction going I And differently, to up Canada, up

is fully Southern those close of come didn't back, things. U.S. northeast really starting sorts down, to

I is 'XX more time things the from have play. -- that long 'XX, it in relates as apart strategic account think normal health care would thing talk care, we to type we're in play. versus pieces so last to the seeing And health I in a lead

near of then So and like we I that. start mix, health to to that as would historical the stuff we're into verticals in our revert care the driving such expect more the term, on, but some as back mix to, focusing --

Neil Linsdell

Okay. just you've Fair enhancing that the enough. go-to-market Board, look meetings know, done doing. is And what anything you've revising on Board week, your this somewhere? taken at Is been specifically that getting or to has company I'm on strategy the new a is the that or at you're maybe looking there wondering as

Geoffrey Krause

I'm to going that to throw Ken.

Ken Sanders

this Yes, Geoff. Thanks, Yes. is Ken.

a partners background, on on, our more I and collaborative my stronger in personally and is way. focused are engaging think something we focused again, I'm given much

but want Council Advisory I double down to that. think Partner first we creating was great a the on step,

them servicing them. We them. And collaborating I we directing to together out the from it's call them, again, have in and not I'm reaching them us learning for And some them, this meetings with mentioned It's and a us reason. of many coming cooperating before, value. next Dallas. with partners up creating week personally clients

that's think I So change. a big

area should. the the in past the company in years, over we that didn't couple way partners I underinvested an think, engage of really the frankly, that that's

we that, that's things something right and focused as the a are focused one so on Board, on now. And of that very I'm personally

Neil Linsdell

out, it office in is like back at to a of have more companies, Or geographies you do before revamping it mentioned the maybe lot people, of that, I'm workspace one as again, the is different question kind as back we the urgency? And industries where seeing you the of people wrap you see now? looking And workforce that the change far migration different with, models as to it figure lot there's to actually and any do they as of deal up. this on Okay. are to feeling trying need to seeing. different different just guys a that of done? trying and space kind of urgency remodeling kind I'm to offices the you are currently and or than everything get -- see a and not kind and get you I'm hybrid what

Ken Sanders

Ken is this again. Yes,

shot Let take me a at that.

these workplace to I are work of continue the and earlier. that. deploy in whole I to They're earliest return is in really, versus some with North a regard, still this Where and well of as think, idea positioned at office adaptability that that. be world, coming accomplished that companies And back uncertainty. issue briefly think in all touched What's not understanding. And But going whole on that remote. clear DIRTT exact very the Geoff, carbon. this this people I in really can spoke and they versus the important. home to right I to out. mentioned embodied my companies for Geoff the to be flexibility America is office around comments, balance? also And the think And in figuring there's work best

architecture the much and understand on to All impact regard, have something the buildings If you of more investors, left eliminating net America, is manufacturing, really biggest going on up in top of on. model built in And it's the at energy approaching DIRTT's waste, of business putting assembling, of in of of in and really and the major transporting, this attention. factories place ton look so that's estate become North I in terms and carbon. are invested them environment efficiencies all embodied largest firms in efficient terms and over the a X. The real are owners on well in forth, set design is and that's they that as get think and energy

think our continue And so delivering regard. that and to understand that commitment that to I our we're make we're clients in value that partners going really and sure

to servicing that terms going in estate. to again, listen dealt returning question, of develops. commercial to markets return forth, with in doctors part real I arrangements, real of variety and with look, on are that's and in see so patients flexibility have that, question we'll is or a the fact notion of fair also a think and how you're of But work and your a and estate care watch again, that what's as people hybrid And from level say really the health this I'd where people essential. the macro

that estate, share what our participate So the regardless want of that's in huge pie real a with grow we there's happens still, environment to in. macro market in and

and helpful? term So still position bullish can about how our that very long we're that we Is participate market. in

Neil Linsdell

color. the appreciate I Great.

Operator

over like the back Krause for conference question-and-answer would session. Geoff remarks. to This to any the I concludes closing turn

Geoffrey Krause

as and It a and was shareholders time a great you of of start page all much, On And Thanks things as coming. and partners harbinger truly our buzz that updating we our our forward infectious, the The ahead lie was Thank believe to to Board, extend great progress. look I Ken and we a to have we behalf a week our new you to gratitude Jeff us. long of the and the the day. office very of thanks employees, very want much. and we in chapter. last turn

Operator

call. conference today's concludes This

and Thank your may You have for day. a participating, lines. you pleasant disconnect

Dirtt Environmental Solutions (DRTTF) 5 May 222022 Q1 Earnings call transcript