DRT.TO - Earnings call transcript Q1 2024 | Dirtt Environmental Solutions LTD

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Operator

Thank you for standing by. This is the conference operator. Welcome to the DIRTT Environmental Solutions First Quarter 2024 Financial Results Conference Call. [Operator Instructions] The conference is being recorded. I would now like to turn the conference over to Shawna Mason, Director of Corporate Affairs. ahead. go Please

Shawna Mason

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

the performance. Khan, current and not will These statements Joining CEO; intent, Canadian and the expectations on call based security be applicable of will guarantees me laws. States Benjamin meaning and of Fareeha are forward-looking on CFO. projections. include call are They United Today's future statements within today Urban, the company's

you results, a and available non-GAAP X, including SEC items. addition, of I Securities to week. non-GAAP this that with reference In as information and replay early May will our reference is next on results and SEC, remind XX-Q filings results. this XXXX recorded, special being will Form forward-looking the webcast reports for be and statements or call Please reconciliations GAAP also the regarding and other Exchange will filed Commission, with

to I'll now turn over the Benjamin. call

Benjamin Urban

and good you, Thank morning, Shawna, everyone.

I'm that year-over-year proud first of achieved team are achieve profitable to We these has and expansion layer adjusted making them each We are field our this basis to our like share significant fourth teams would organization our the and year-over-year an is a of growth. Every year. since thank our the helping last proud first the incredible we improvement. results. was X,XXX to our EBITDA accomplishment I our contributed the to consecutive since reflect pleased corporate us this slower COVID, DIRTT our our of. our in quarter and results year-over-year at organization team revenue this of quarter point QX directly revenue also technicians made factory time progress growth double-digit DIRTT in from staff, commercial results for quarter in margin, first seasonally which is

Health Doctors, companies Pittsburgh across brand likes Bank, & the Cadence educational orders Medicine, City the such include These Buffalo, San the prestigious Ohio Helmerich NYU Nebraska our University, City organizations Federal Keywood balance Kansas corporate Hospital. as to Payne, of Administration, of U.S. and as CBRE market the clients Memorial National name a Purdue represent Veterans Corporation, diverse Diego. broad and City University. And Government of First continue Government, the as providers, such Health and of and Texas segments. and care institutions Langone Cambridge of University MNP the quarter University of First recognized such Visa, lastly, Health Bank. Corporation,

sustainable team Looking focused leaning on forward, our our advantages. driving is into revenue inherent growth by

the As our DIRTT and in to enhanced a grow ability addressable stronger large construction for remain share is underpenetrated aggressively of and superior how and pursue implementation provider construction to scale network and win. greater quality solutions. and distribution speed, market our market, its valued we technology, We customize construction continue to up a will market. interior partner in commercial continues

focus on added DIRTT in partners for a our States quality to all and of Western commitment growing and the shared DIRTT's bolstering QX business existing new our clients. delivering geographic XXXX, their markets scaling thank coverage we In their United multiple We to partners region. with demonstrating expanded partners

that high training seen indicating engagement, We is partners, have future our investment the also attendance and staffing and across in bright.

aligning is commercial continued DIRTT's efforts theme in of development and reflected through innovation software Our QX product strategy. to investment in the

painted work of doors all new There which thin new ICE glass lines, catalog, the new well as hardware the for profile was new included case QX, new a in a options release back software finish. creation as

ones these conference of largest last at Connext month. with annual along many introduced innovations the additional next debut sales our to over year excited are We at

that announce existing a leading our to excited HKS, health design worldwide. sector in to from be releasing with XX will on QX collaboration we designed care that innovative global In addition enhancements and care the innovative the offices in for to design operating we health also architecture offerings, products new also firm are focuses

on and zero deliveries We to our incidents. defects. zero Zero journey continue missed recordable

reduced For QX to QX and external quarter. defects XXXX, improvement per of X% a we our XX% a dollars improvement million million last $XX.X from revenue XXXX from

which XXXX in performance history. on-time is for Our QX was highest DIRTT's XX.X% the

Safety was key excellence total through which Our the make at the industry impacts priority. commitments to helping safety approach manufacturing sustainability XXXX incident strive performance. maintaining sustainability below practices of implementation our our We customers know core to proactive responsible ESG pride the leader transparent through of and and a their QX factors our our and position our the achieve by XX% solutions. We both design world we and ESG commitments own measuring in value, our a line. that remain business X.XX, in reporting take better, on and is recordable establishing, end frequency our as world-class is average. and bottom

in of $X the make XX-Q. we to project to and in technology in investment of the the the teams ESG This the being next commercial, X secured Canada steps industry States. stay September and established next explained and ahead In both which and progress DIRTT's continue in we United the Council proceedings and from and management comprises manufacturing, take finally, section quarter, dates fund outside to a team Sustainability our level regulations. ongoing DIRTT our Falkbuilt of And employees in cross-functional between summary, are of the million in of DIRTT QX to secured the summary litigation DIRTT year, litigation addition initiatives judgment, legal to as

as in damages amended seeking DIRTT Additionally, in complaint. $XXX noted the million is second

time this we are quarter. proud our transformational performance DIRTT, at this of During

helped to I'll Fareeha are We our results. grateful team, our and financial over that, happen. With more clients share who for partners hand it to some make about this

Fareeha Khan

due profit, gross were which gross pleased the of and On with increase Compared first XX% in profit quarter the XXXX, this party up we cost XX.X% issued efficiencies, in XX.X% the and expenses of were our improvement slowest compared is charges adjusted XXXX we all. results, with quarter for first $X.X discussing year. for is XXXX. Consistent morning, the million initiatives in last same This costs is as margins. quarter quarter first increase and what product as costs increased improved positive an quarter business. the expenses loss just are reorganization note described. EBITDA. primarily $X.X Thank shared to $X.X $XX.X profit XXXX. to from we Adjusted that QX and quarter to website. release from the good a is on quarter, XXXX. million to our have same maintain with margin, is which the Benjamin, margin margin a increased in to driven million, available we first to year-on-year of of XXXX. X.X% gross first million improvement onetime note revenue gross quarter seasonally our was Adjusted in the consecutive continued This from the quarter the the of by related for line of amortization, have Revenues decrease quarter, adjusted Please from the the during XX.X% quarter first initiatives press reduced strong in profit of first operating improved before, to quarter you, DIRTT's is million, in depreciation fourth of EBITDA period $XX.X operating XX.X% now revenues. excludes impact the We first million, and well that the imbursements impairment in first growth, and margin or excluding reduction a our Operating mix. $X.X reduce

$X.X million of balance now we XX due The CAD net for bid, turn Canadian of million on November our this successfully million to substantial income on adjusted a call offering Apart after offering. above, benefited the of $X.X from the same period the XXXX. In loss January which exchange events. I'll discuss devaluing a the Our a XXXX. some later from was dollar. I to an announced interest X, the XXXX tax for to compared discuss and in million gains gain first sheet Higher $XX.X rights net after income will increase closed gain XXXX, million. EBITDA tax issuer foreign QX rights discussed and on quarter we $X

of raised reduce debt. to this $X.X of tendered March the debt. million reduce of the announced to As The we closed on of bid documents, in offering XX.X and CAD buy purpose was of our our bid, we debentures. and received February extinguishment X.X CAD for bid accepted on all XX, our a XXXX, XXXX, related Through a balance the rights sheet. the outstanding this was resulting in debentures. business gain funds We XX, CAD from intention to XX the back explained On and of in our offers strengthen and million the invest issuer some million the offers million substantial to debt

pleased are $XX this at million with sheet. XX, strengthen cash, used finished continue in result as in operations to with our from million $XX.X related payments facility XX, we quarter $XX.X balance availability $X.X was ABL up December year-end. due million The million includes We unrestricted Liquidity, under mainly million, $X of which our March $X to to XXXX. was timing of million credit as vendor $XX.X differences of at million XXXX. Cash

Royal Canada renewed drawn our for additional we facility of on this successfully to date. an February have not On year. We X, with XXXX, ABL Bank

Net capital working improve. million at the principal of repayment offering end and issuer bid. the $XX.X quarter to million, from capital by primarily to the Offset million, million on proceeds net decrease of $X.X working was results. operational improved due from due continues in the Our mainly working to million debt $X.X a XXXX, under rights up December capital the $XX.X $XX.X of

XXXX excluding pipeline was third our of million to regularly into margin driver of our accuracy April million, Our leads increased in forecasting key this XXXX. We particularly our our of than to more I'm profit gross at over proud at XX-month see XX% our compared quarter pipeline management. and April sales our growth. $XXX our matter pipeline is X, revenue organization and X% commercial with are X, success pleased in scrutinize growing revenue consecutive forecasting. pipeline, converting A $XXX

cause XXXX seasonally valued on few Having Looking be costs financial said we quarters. entering to listeners' showing our clients. full margins. Macroeconomic on focused forward, past time April an gross our XX, years. our in and we excellence our delivering margins the draw remain risks the to over DIRTT's This in aluminum deck stronger and on results. published our website, investor maintaining section to like that, we concludes I pressure will exist on and recent to may adjusted increases would our our journey on attention on still

grow and what achieved focused business. continuing of on the have are we improve proud are We and to revenue

I now will it to back to Benjamin turn conclude.

Benjamin Urban

Fareeha. you, Thank

to excellence. journey a on We are

for We future excited on recognize market ongoing growth. are focused are We uncertainty. DIRTT's and revenue

success. with and hard Thank demonstrated and of investment decisions discipline of again through are well you clients is strengthened DIRTT the difficult take said prepared spirit, our day, team. balance amazing but achievements driven economic in outstanding #X thank and incredible embody floor to believe only obstacles all every our And face office, the any our the excellence They we our often of also by of and It construction of ongoing to construction. financial We have resilience you. understand are the teamwork Together, we the commitment team. world partners our our on a asset who differentiated as that clients conditions. change our we variety However, not the sheet, and for in passion partners of continuing From the the to well employees company. and to are behalf care unwavering innovation, their value believe interior have factory of and of their business. talented as witnessed dedication, fuels the this, work DIRTT commitment hard-working, to

thank all us to joining you like for today. I'd

Operator

does participation This your the conclude program. in Thank you for today's conference.

now disconnect. may You

Dirtt Environmental Solutions (DRTTF) 9 May 242024 Q1 Earnings call transcript