18 slides from Dirtt Environmental Solutions's investor presentation, Apr 27, 2024
Slide 1: DIRTT's Journey to Excellence
DIRTT'S JOURNEY TO EXCELLENCE 2024 APRIL* (*) This deck was updated on April 27, 2024 to correct typographical errors on slide 6 © DIRTT ALL RIGHTS RESERVED 1
Slide 2: Advisory Non-GAAP Financial Measures
ADVISORY NON-GAAP FINANCIAL MEASURES CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES Certain statements contained in this presentation are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Priv
Slide 3: Not Just Built for Today. Building for Tomorrow.
NOT JUST BUILT FOR TODAY. BUILDING FOR TOMORROW. Through custom prefabrication, DIRTT translates unique visions into compelling, adaptable spaces where people work, learn, and heal. © DIRTT ALL RIGHTS RESERVED 3
Slide 4: The DIRTT Construction System for All Elements of an Interior Space
THE DIRTT CONSTRUCTION SYSTEM FOR ALL ELEMENTS OF AN INTERIOR SPACE. © DIRTT ALL RIGHTS RESERVED 4
Slide 5: Table of Contents
TABLE OF CONTENTS REFOCUSED DIRTT’S JOURNEY NEW OPERATIONAL COST 2023 FINANCIAL BACKGROUND COMMERCIAL TO EXCELLENCE LEADERSHIP EFFICIENCIES MANAGEMENT RESULTS STRATEGY © DIRTT ALL RIGHTS RESERVED 5
Slide 6: Timeline of Leadership Changes + Financial Results
BACKGROUND TIMELINE OF LEADERSHIP CHANGES + FINANCIAL RESULTS January 2022 April 2022 August 2022 September 30, 2022 December 31, 2022 December 31, 2023 • CEO departs • 22NW LP nominees are • New Executive • $6.7M net loss in Q3* after • $5.9M net loss after tax and • New leadership • Chairman of th
Slide 7: DIRTT's Performance Prior to 2022 Leadership and Board Changes
DIRTT’S PERFORMANCE PRIOR TO 2022 LEADERSHIP AND BOARD CHANGES • Under DIRTT’s prior leadership, financial performance significantly deteriorated. • While revenue declined and margins contracted, DIRTT leadership did not adequately reduce its fixed costs • DIRTT's business was impacted by the COVID-
Slide 8: DIRTT's Performance Prior to 2022 Leadership and Board Changes
BACKGROUND DIRTT’S PERFORMANCE PRIOR TO 2022 LEADERSHIP AND BOARD CHANGES Total Revenue Gross Profit Margin Net Cash Flow from Operations ($M) (%) ($M) $300 45% $20 $275 39.0% $15 $13.4 $12.5 $248 40% $250 34.9% $10.1 $10 35% $11.3 31.1% $5 $11.5 $200 30% $0 $172 2018 2019 2020 2021 25% ($5) $148 $1
Slide 9: Doing It Right This Time: DIRTT's Journey to Excellence
DOING IT RIGHT THIS TIME: DIRTT’S JOURNEY TO EXCELLENCE • Under the new Board of Directors, a comprehensive turnaround strategy of the business is underway • Since the 2022 Board change DIRTT has: • Recruited a best-in-class executive leadership team • Refocused commercial strategy to DIRTT’s compet
Slide 10: Doing It Right This Time: DIRTT's Journey to Excellence
DOING IT RIGHT THIS TIME: DIRTT’S JOURNEY TO EXCELLENCE Total Revenue Gross Profit Margin Net Cash Flow from Operations ($M) 35% 32.7% ($M) $200 $20 $182 $14.8 30% $180 $172 $10 $7.6 $160 $148 25% $11.5 $0.4 $0 $140 2021 2022 2023 $120 20% ($10) 15.9% $100 15% ($20) 16.4% $80 $60 10% ($30) ($31.2) $
Slide 11: Executive Leadership
NEW LEADERSHIP EXECUTIVE LEADERSHIP Benjamin Urban Richard Hunter Fareeha Khan – Chief Executive Officer – Chief Operating Officer – Chief Financial Officer Benjamin joined DIRTT as our Chief Executive Officer in Richard joined DIRTT as our Chief Operating Officer in Fareeha became DIRTT’s Chief Fin
Slide 12: Board of Directors
NEW LEADERSHIP BOARD OF DIRECTORS Ken Sanders† Aron English† – Board Chair, Corporate Governance and Committee Member – Corporate Governance and Compensation Committee Chair Ken Sanders has served as Managing Principal of DesignIntelligence, an organization that Aron English is founder and has serve
Slide 13: Board of Directors
NEW LEADERSHIP BOARD OF DIRECTORS Scott Robinson† Shally Pannikode† – Audit Committee Chair, Enterprise Risk Management – Enterprise Risk Management Committee Member Committee Member Shally is an accomplished healthcare technology executive who has led large healthcare Scott Robinson currently serve
Slide 14: Refocused Commercial Strategy
C O M M E R C I A L S T R AT E GY REFOCUSED COMMERCIAL STRATEGY 12 Month Pipeline Price Increases Revenue Forecasting Accuracy ($M) 25% 100% 99.5% $280 21.3% $270 97.2% $270 20% 95% 94.7% 90.6% $260 15% 90% 88.6% $250 $247 10.3% 10% 85% $240 $232 5.0% 81.5% $230 5% 80% 80.6% Accuracy $220 0.0% 78.2%
Slide 15: Operational Efficiencies
O P E R AT I O N A L E F F I C I E N C I E S OPERATIONAL EFFICIENCIES Average Inventory per $M External Deficiencies Shipments On Time in Full Revenue (in USD) per $M Revenue (OTIF) $125,000 (# of external deficiencies) 100% 98% 98% $122,613 20 $120,401 95% 98% 18 17.2 94% 97% $120,000 95% 16 15.5 9
Slide 16: Cost Management
COST MANAGEMENT COST MANAGEMENT (SG&A) Salaries and Benefits Revenue per SG&A Employee Adjusted Operating Expenses(1) (in USD) (in USD) (% of Revenue) 60% 56.9% $45,000 $700,000 $39,858 $650,000 $40,000 $582,179 $600,000 50% $35,000 $32,864 $550,000 42.8% $500,000 $462,798 $30,000 $28,697 40% $450,0
Slide 17: 2023 Financial Results and Reconciliation of Non-GAAP Financial Measures
Q 4 F I N A N C I A L R E S U LT S 2023 FINANCIAL RESULTS AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(1) For the Three Months Ended December 31, 2023 2022 2021 For the Year Ended December 31, 2023 2022 2021 • In Q4 2023 DIRTT achieved: Gross profit 19,238 11,589 ($ in thousands) 8,416 59,542 2
Slide 18: © DIRTT ALL RIGHTS RESERVED
© DIRTT ALL RIGHTS RESERVED