DIRTT Reports Fourth Quarter and Year-End 2013 Results
CALGARY, ALBERTA--(Marketwired - Mar 17, 2014) - DIRTT
Environmental Solutions ("DIRTT" or the "Company") (TSX:DRT), a
leading technology-enabled designer, manufacturer and installer of
fully customized, prefabricated interiors, today announced its
financial results for the three- and 12-month periods ended
December 31, 2013.
The following financial information should be read in
conjunction with the Company's financial statements and
management's discussion and analysis for the three- and 12-month
periods ended December 31, 2013, which will be available at
www.sedar.com and http://ir.dirtt.net/financial-reports/.
This news release contains references to Canadian dollars and
United States dollars. Canadian dollars are referred to as "$" and
United States dollars are referred to as "US$".
Selected Highlights
In the fourth quarter of 2013 the Company:
- Completed an initial public offering (the "IPO") for gross
proceeds of $45.0 million ($39.8 million net of fees) and issued
15.0 million of its Common Shares (the "Common Shares");
- Converted its Class A preferred shares (the "Preferred Shares")
and its convertible notes issued in June 2012 (the "June 2012
Notes") to Common Shares; and
- Repaid 50% of the US$20.0 million of convertible notes issued
in December 2012 (the "December 2012 Notes"), which reduced
exposure to the fluctuations in the US dollar against the Canadian
dollar.
In addition to the highlights reported in the fourth quarter of
2013, during calendar 2013 the Company:
- Successfully completed the largest project in the Company's
history in early 2013;
- Strengthened its Distribution Partner ("DP") network by
providing more training to existing DPs. This was supported by
further investment on the part of selected DPs in their own Green
Learning Centers ("GLCs") and DIRTT-dedicated staff; and
- Launched the new i-Cube software in June 2013 adding fully
customizable millwork (shelves, cabinets, etc.) to its proprietary
3D design, configuration and manufacturing software ("ICE" or the
"ICE Software").
Subsequent to year-end the Company:
- Announced receipt of letters of intent and contracts from five
companies totalling $12 million with three of the projects
scheduled to be delivered in the first half of 2014.
"In the fourth quarter of 2013 we completed our initial public
offering which allowed us to tidy up our balance sheet and provided
us with the capital to fund an array of growth initiatives that
include new product development, targeting additional opportunities
in markets and verticals where we do business today, as well as
regions and sectors outside of our current operational base," said
Scott Jenkins, President of DIRTT. "Our Distribution Partners share
our commitment to growth and together we intend to further invest
in training, staff and Green Learning Centers in 2014 with an eye
to showcasing the high value our customized solutions bring to the
interior construction industry."
"Our solid results in the fourth quarter were supported by
higher than normal activity levels through the holiday season,
which we saw extend into the early part of 2014," said Mogens Smed,
CEO of DIRTT. "In the first quarter we announced a series of five
agreements totalling some $12 million, well in excess of our
average job value, that we expect will contribute revenue both in
the first half of the year and beyond as the solutions are
delivered."
Summary Financial Results |
|
|
Three months ended |
|
Twelve months ended |
|
Fifteen months ended |
|
Twelve months ended |
|
($ thousands, except per share amounts) |
December 31, 2013 $ |
|
December 31, 2012 $ |
|
December 31, 2013 $ |
|
December 31, 2012 $ |
|
September 30, 2011 $ |
|
Revenue |
34,202 |
|
34,661 |
|
139,795 |
|
173,566 |
|
114,823 |
|
Gross
profit |
12,603 |
|
12,525 |
|
53,296 |
|
60,701 |
|
41,312 |
|
Gross
profit % |
36.8 |
% |
36.1 |
% |
38.1 |
% |
35.0 |
% |
36.0 |
% |
Adjusted Gross profit % (1) |
38.4 |
% |
37.8 |
% |
39.5 |
% |
36.6 |
% |
37.4 |
% |
Selling, general and administrative |
14,724 |
|
13,288 |
|
56,727 |
|
65,070 |
|
41,931 |
|
IPO
transaction costs |
836 |
|
- |
|
836 |
|
- |
|
- |
|
Operating loss |
(2,957 |
) |
(763 |
) |
(4,267 |
) |
(4,369 |
) |
(619 |
) |
Debt
settlement expense |
4,560 |
|
- |
|
4,560 |
|
- |
|
- |
|
Finance costs |
1,133 |
|
882 |
|
5,224 |
|
4,037 |
|
2,958 |
|
Adjusted EBITDA (1) |
82 |
|
1,833 |
|
5,525 |
|
6,980 |
|
6,376 |
|
Net
loss |
(10,151 |
) |
(419 |
) |
(16,495 |
) |
(7,144 |
) |
(4,813 |
) |
Net loss attributable to common shareholders -basic and diluted
share: |
(0.25 |
) |
(0.01 |
) |
(0.42 |
) |
(0.21 |
) |
(0.12 |
) |
Note: |
|
1. |
See
"Non-IFRS Measures" |
Financial Results
Revenue
Revenue decreased by $0.5 million or 1.3% in the three months
ended December 31, 2013 compared with the same period in 2012.
Revenue decreased by $33.8 million or 19.5% in the 12 months ended
December 31, 2013 compared to the 15 months ended December 31,
2012, primarily due to a 12-month reporting period versus a
15-month reporting period along with the substantial completion of
a large project for a Fortune 500 company in 2012 (12 months ended
December 31, 2013 - $0.5 million, 15 months ended December 31, 2012
- $12.6 million). The decrease was partially offset by higher
demand from energy, healthcare and financial services clients as
well as the strengthening of the US dollar during 2013.
Growth in energy, healthcare and financial services is due in
large part to the continued efforts to strengthen the network of
DPs. As existing DPs are developed and reassessed, and new DPs are
added, DIRTT's exposure and success in new and growing markets
increases. Additional or stronger DPs translate into greater
resources in the sales territories promoting DIRTT and generating
sales opportunities for future periods. On average, new DPs require
up to two years to establish themselves in their market. At
December 31, 2013, DIRTT had 98 DPs compared with 100 at December
31, 2012; and 91 at September 30, 2011. As at December 31, 2013,
DIRTT increased its DP locations to 172, selling in eight
countries.
Gross Profit / Adjusted Gross Profit
Gross profit as a percentage of revenue increased by 0.7% in the
three months ended December 31, 2013 when compared to the same
period in 2012. The increase was due to improved efficiencies on
transportation costs, and an increase in higher margin software
revenue. Gross profit as a percentage of revenue increased by 3.1%
in the 12 months ended December 31, 2013 compared to the 15 months
ended December 31, 2012. Due to the significant size of the project
substantially completed for a Fortune 500 company in 2012, a
discount was provided during the period, which contributed to the
overall lower gross profit percentage in the 15 months ended
December 31, 2012 compared to the 12 months ended December 31,
2013. In addition, there were some final positive adjustments at
the conclusion of this project that contributed to the higher gross
profit percentage in the 12 months ended December 31, 2013.
Adjusted gross profit as a percentage of revenue increased by
0.6% in the three months ended December 31, 2013 when compared to
the same period in 2012 and by 2.9% in the 12 months ended December
31, 2013 compared to the 15 months ended December 31, 2012 for the
same reasons noted above.
Selling, General and Administrative ("SG&A")
Expenses
SG&A expenses increased by $1.4 million or 10.8% in the
three months ended December 31, 2013 when compared to the same
period in 2012. The change was the result of increases in salaries
and benefits of $1.5 million and commission expense of $0.3
million, and was partially offset by decreases in travel and
marketing costs of $0.2 million, stock-based compensation expense
of $0.1 million, and $0.1 million in other miscellaneous items.
Salary cost increases reflect personnel additions focused on
generating and supporting higher business volumes.
SG&A expenses decreased by $8.3 million or 12.8% in the 12
months ended December 31, 2013 compared to the 15 months ended
December 31, 2012. Of the $8.3 million overall decrease, $12.1
million was related to the additional three months of operations
being reported in 2012, partially offset by a $3.8 million increase
in 2013. The majority of the increase for the 12 months ended
December 31, 2013 was the result of hiring additional sales and
support personnel as DIRTT continues to grow in North America and
pursue clients in new geographic markets outside of North America,
which increased salaries and benefits by $3.5 million; a revised
commission plan which increased commissions by $1.0 million; and
higher rent costs of $0.7 million, primarily due to the sale and
leaseback of the Company's Calgary office building in October 2012.
This was partially offset by a reduction in travel and marketing
expenses of $0.7 million, a decrease in professional services fees
of $0.4 million, and a reduction in miscellaneous office expenses
of $0.3 million.
IPO Transaction Costs
Upon completion of the IPO on November 28, 2013, the Company
issued 15,000,000 Common Shares at $3.00 per share for gross
proceeds of $45.0 million. Total transaction costs incurred on the
IPO were $5.2 million, of which $4.4 million (incremental costs
directly attributable to issuing new shares) was recognized as a
reduction in equity as at December 31, 2013 and $0.8 million (costs
that relate to the listing of existing shares) was recognized as
IPO transaction costs for the three and 12 months ended December
31, 2013.
Transaction costs consisted of underwriters' commission and
fees, plus audit, legal, filing, printing, translation and
miscellaneous fees. Transaction costs that relate to both new share
issuance and listing of existing shares were allocated between
those functions based on the number of shares involved.
Debt Settlement Expense
During the 12 months ended December 31, 2013, DIRTT incurred
debt settlement expense of $4.6 million in connection with the 50%
repayment of the original US$20.0 million December 2012 Notes. As
per the terms of the first and second amendment agreements to the
Note purchase agreement dated October 21, 2013, DIRTT exercised its
option to repay US$10.0 million ($10.5 million) of the December
2012 Notes from the proceeds of the IPO in November 2013. As a
result of the $10.5 million prepayment, the Company incurred a
prepayment premium of US$3.5 million ($3.8 million), as well as a
non-cash charge of $0.8 million upon the derecognition of the
liability since the carrying value at time of payment was $9.7
million. The non-cash charge of $0.8 million represents the
un-accreted interest expense associated with the $10.5 million in
principal, which had not yet been accreted up to face value at the
time of prepayment.
Finance Costs
Finance costs increased by $0.2 million in the three months
ended December 31, 2013 compared to the same period in 2012.
Finance costs for the three months ended December 31, 2013 were
comprised of $0.7 million non-cash and $0.4 million cash as
compared to $0.4 million and $0.5 million for the same period in
2012, respectively. The higher non-cash interest expense in the
2013 period reflects three months of accretion expense associated
with the December 2012 notes compared to one month of accretion
expense in the 2012 period, partially offset by a reduction in
accretion expense related to the debt component of the Preferred
Shares as a result of conversion to Common Shares in November
2013.
Finance costs increased by $1.2 million for the 12 months ended
December 31, 2013 when compared to the 15 months ended December 31,
2012. Finance costs for the 12 months ended December 31, 2013 were
comprised of $3.2 million non-cash and $2.0 million cash compared
to $2.0 million and $2.0 million for the 15 months ended December
31, 2012, respectively. The increase in non-cash interest in the
2013 period was mainly due to 12 months of accreted interest
attributed to the December 2012 Notes compared to one month of
accretion expense in the 2012 period, partially offset by the
repurchase of the debentures in June 2012 and a reduction in the
accretion expense from the debt component of the Preferred Shares
as result of conversion to Common Shares in November 2013.
Adjusted EBITDA
Adjusted EBITDA decreased by $1.8 million in the three months
ended December 31, 2013 compared with the same period in 2012. The
decrease was mainly due to a reduction in revenue of $0.5 million,
an increase in SG&A costs of $1.4 million, and was partially
offset by improved adjusted gross profit percentage from 37.8% to
38.4%.
Adjusted EBITDA decreased by $1.5 million in the 12 months ended
December 31, 2013 compared to the 15 months ended December 31,
2012. The decrease was mainly due to a reduction in revenue of
$33.8 million resulting from a 12-month reporting period versus a
15-month reporting period, and partially offset by a decrease in
SG&A of $8.3 million and improved adjusted gross profit
percentage from 36.6% to 39.5%.
Outlook
Construction is a major global industry and consists of building
new structures, making additions and modifications to existing
structures, as well as conducting maintenance, repair and leasehold
improvements on existing structures. As an example, the total US
construction market was US$899 billion in 2013, of which US$562
billion was attributable to non-residential building (Source:
US Census Bureau). This includes both new building and
renovation projects. Total US non-residential construction spending
is forecast to grow to US$714 billion in 2017 (Source: FMI US
Markets Construction Overview 2014). DIRTT believes
conventional construction activities are fraught with challenges
including cost overruns, quality issues and time delays and
increasingly organizations are looking for a better way to build
out their interior spaces, whether for new buildings or
renovations. DIRTT's growing roster of repeat clients is a strong
testament to the benefits of technology enabled prefabricated
solutions.
DIRTT's growth strategy consists of five key pillars: (1)
increase penetration of existing markets by providing continued
support and increased investment to existing DPs throughout North
America; (2) continue to invest in ICE and new innovative interior
construction solutions; (3) capitalize on recent and continued
investment in new industry verticals such as healthcare; (4)
capitalize on recent and continued investment alongside new
international DPs such as those in the Middle East; and (5)
penetrate new industries such as the hospitality and residential
sectors.
Management believes DIRTT Solutions, including DIRTT Walls,
DIRTT Power, DIRTT Networks, DIRTT Millwork and DIRTT Floors, are a
superior alternative to conventional construction in all sectors of
the construction industry, and that a continued increase in
construction activity can be expected to result in an ongoing
improvement in Company revenues. DIRTT plans to invest additional
resources, including the further development of ICE and the
development of new DIRTT Solutions and test projects, in order to
pursue existing opportunities in healthcare, education and
government, and new opportunities in the hospitality and
residential sectors of the construction industry. The Company's
product development team has been, and will continue to be,
expanded to address industry specific challenges and
opportunities.
Liquidity and Capital Resources
At December 31, 2013, DIRTT had $34.4 million in cash and cash
equivalents as compared to $8.8 million in cash and restricted cash
as at December 31, 2012. Upon completion of the IPO on November 28,
2013, DIRTT received net proceeds of $39.8 million, of which $30.0
million was held in short-term, liquid deposits at December 31,
2013. In November 2013, the Company used a portion of the proceeds
to repay US$10.0 million ($10.5 million) of the December 2012 Notes
as well as US$3.5 million ($3.8 million) prepayment penalty in
accordance with the terms of the December 2012 Notes.
As at December 31, 2013, DIRTT had drawn $4.9 million from its
US$5.0 million capital financing facility, had fully drawn its
US$2.5 million term facility, and had drawn $nil from its US$18.0
million revolving operating facility. DIRTT currently has
sufficient productive capacity to satisfy near-term growth.
Looking forward to 2014, management expects to make continued
investments in product and software development to further expand
the Company product offerings, as well as in certain manufacturing
equipment to support this development. Management also expects to
further invest in its existing GLCs to ensure that each location is
showcasing the latest DIRTT Solutions. DIRTT is also investing in a
new GLC in Toronto, Ontario, to better serve and support the
significant market in Central Canada.
Non-IFRS Measures
Adjusted gross profit and adjusted gross profit %, EBITDA and
Adjusted EBITDA are non-IFRS measures used by management to assess
DIRTT's performance and financial condition. Consequently, they do
not have a standard meaning as prescribed by IFRS, and are
therefore unlikely to be comparable to similar measures presented
and calculated by other companies. Management believes that the
non-IFRS measures are useful supplemental measures that may assist
investors in assessing the financial performance and the cash
anticipated to be generated by DIRTT's business. The non-IFRS
measures should not be considered as the sole measure of the
Company's performance and should not be considered in isolation
from, or as a substitute for, analysis of the Company's financial
statements.
Adjusted gross profit and adjusted gross profit %
Adjusted gross profit is defined as gross profit before the
deduction of the depreciation of equipment and tooling for
manufacturing-related assets that is included in cost of goods
sold. Adjusted gross profit % is calculated as adjusted gross
profit divided by revenue. DIRTT uses this measure as an indicator
of cash generated from the production of goods and services that it
sells.
The following table reconciles adjusted gross profit to the
audited consolidated statements of comprehensive loss.
|
Three months ended |
|
Twelve months ended |
|
Fifteen months ended |
|
($ in thousands, except %) |
December 31, 2013 $ |
|
December 31, 2012 $ |
|
December 31, 2013 $ |
|
December 31, 2012 $ |
|
Revenues |
34,202 |
|
34,661 |
|
139,795 |
|
173,566 |
|
Cost of goods sold |
21,599 |
|
22,136 |
|
86,499 |
|
112,865 |
|
Gross
profit |
12,603 |
|
12,525 |
|
53,296 |
|
60,701 |
|
Gross
profit % |
36.8 |
% |
36.1 |
% |
38.1 |
% |
35.0 |
% |
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
|
Depreciation included in cost of goods sold |
520 |
|
582 |
|
1,936 |
|
2,770 |
|
Adjusted gross profit |
13,123 |
|
13,107 |
|
55,232 |
|
63,471 |
|
Adjusted gross profit % |
38.4 |
% |
37.8 |
% |
39.5 |
% |
36.6 |
% |
EBITDA and Adjusted EBITDA
EBITDA represents an indication of the entity's capacity to
generate income from operations before taking into account
management's financing decisions and costs of consuming tangible
and intangible capital assets, which vary according to their
vintage, technological currency, and management's estimate of their
useful life. Accordingly, EBITDA is earnings before interest,
taxes, depreciation and amortization. Adjusted EBITDA is EBITDA
plus non-cash foreign exchange gains or losses on debt revaluation;
gains or losses on disposal of property, plant and equipment and
intangible assets; write-off of property, plant and equipment and
intangible assets; stock-based compensation expense; transaction
costs; and any other non-recurring gains or losses. Management uses
these measures to assess the Company's ability to generate cash
flows, service debt, pay current taxes, and fund capital
expenditures. Readers are cautioned that EBITDA should not be
considered as an alternative to profit as determined in accordance
with IFRS.
The following table reconciles EBITDA and Adjusted EBITDA to the
audited consolidated statements of comprehensive loss.
|
Three months ended |
|
Twelve months ended |
|
Fifteen months ended |
|
($ thousands) |
December 31, 2013 $ |
|
December 31, 2012 $ |
|
December 31, 2013 $ |
|
December 31, 2012 $ |
|
Net
loss for the period |
(10,151 |
) |
(419 |
) |
(16,495 |
) |
(7,144 |
) |
|
|
|
|
|
|
|
|
|
Add
back (deduct): |
|
|
|
|
|
|
|
|
Finance costs |
1,133 |
|
882 |
|
5,224 |
|
4,037 |
|
Current tax (recovery) expense |
(106 |
) |
(136 |
) |
455 |
|
(761 |
) |
Deferred tax expense (recovery) |
1,069 |
|
(697 |
) |
841 |
|
(417 |
) |
Depreciation included in cost of goods sold |
520 |
|
582 |
|
1,936 |
|
2,770 |
|
Depreciation and amortization included in selling, general and
administrative |
1,708 |
|
1,624 |
|
6,322 |
|
7,899 |
|
EBITDA |
(5,827 |
) |
1,836 |
|
(1,717 |
) |
6,384 |
|
IPO
transaction costs |
836 |
|
- |
|
836 |
|
- |
|
Debt
settlement expense |
4,560 |
|
- |
|
4,560 |
|
- |
|
Stock-based compensation |
54 |
|
177 |
|
395 |
|
681 |
|
Non-cash foreign exchange loss on debt revaluation |
459 |
|
- |
|
1,259 |
|
- |
|
Write-off of property, plant and equipment |
- |
|
- |
|
192 |
|
- |
|
Gain on sale of property, plant and equipment |
- |
|
(180 |
) |
- |
|
(85 |
) |
Adjusted EBITDA |
82 |
|
1,833 |
|
5,525 |
|
6,980 |
|
Conference Call Details
DIRTT will host a conference call and webcast on Monday, March
17, 2014 at 7 a.m. MT (9 a.m. ET) to discuss its fourth quarter and
year-end results in greater detail. President Scott Jenkins and CFO
Derek Payne will participate.
To access the conference call by telephone dial 647.427.7450 (Toronto
and international callers) or 1.888.231.8191
(toll-free in North America). Please call 10 minutes prior to the
start of the call. In addition, a live webcast (listen only mode)
of the conference call will be available at:
http://www.newswire.ca/en/webcast/detail/1317551/1455071
Investors are invited to submit questions by email before and
during the conference call. Please send them to ir@dirtt.net.
A replay of the conference call will be available at
416.849.0833 or
1.855.859.2056,
passcode 9755754, from noon (ET) Monday, March 17, 2104 to midnight
(ET) Monday, March 24, 2014 or through the webcast archives at
http://www.newswire.ca or on DIRTT's website at
http://ir.dirtt.net/.
Financial Statements
DIRTT Environmental Solutions Ltd. |
|
Consolidated Statements of Loss and Comprehensive
Loss |
|
(Stated in thousands of Canadian dollars, except per
share amounts) |
|
|
|
|
For the twelve months ended |
|
For the fifteen months ended |
|
|
December 31, 2013 $ |
|
December 31, 2012 $ |
|
|
|
|
|
|
Revenues |
139,795 |
|
173,566 |
|
Cost
of goods sold |
86,499 |
|
112,865 |
|
Gross
profit |
53,296 |
|
60,701 |
|
|
|
|
|
|
Selling, general and administrative |
56,727 |
|
65,070 |
|
IPO transaction costs |
836 |
|
- |
|
Operating loss |
(4,267 |
) |
(4,369 |
) |
|
|
|
|
|
Foreign exchange loss |
1,148 |
|
1 |
|
Gain
on sale of property, plant and equipment |
- |
|
(85 |
) |
Debt
settlement expense |
4,560 |
|
- |
|
Finance costs |
5,224 |
|
4,037 |
|
Loss
before tax |
(15,199 |
) |
(8,322 |
) |
|
|
|
|
|
Current tax expense (recovery) |
455 |
|
(761 |
) |
Deferred tax expense (recovery) |
841 |
|
(417 |
) |
Net
loss for the period |
(16,495 |
) |
(7,144 |
) |
|
|
|
|
|
Other
comprehensive income (loss) |
|
|
|
|
Exchange differences on translation of foreign operations, net of
tax of $nil (2012 - $nil) |
1,611 |
|
(1,281 |
) |
Total comprehensive loss for the period |
(14,884 |
) |
(8,425 |
) |
|
|
|
|
|
Net
loss for the period attributable to: |
|
|
|
|
Equity holders of the Company |
(16,495 |
) |
(7,480 |
) |
Non-controlling interest |
- |
|
336 |
|
|
(16,495 |
) |
(7,144 |
) |
Total
comprehensive loss for the period attributable to: |
|
|
|
|
Equity holders of the Company |
(14,884 |
) |
(8,771 |
) |
Non-controlling interest |
- |
|
346 |
|
|
(14,884 |
) |
(8,425 |
) |
Loss
per share |
|
|
|
|
Basic and diluted |
(0.42 |
) |
(0.21 |
) |
|
|
DIRTT Environmental Solutions Ltd. |
|
Consolidated Statements of Financial Position |
|
(Stated in thousands of Canadian dollars) |
|
|
|
As at December 31 |
2013 $ |
|
2012 $ |
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash
and cash equivalents |
34,373 |
|
7,826 |
|
Restricted cash |
- |
|
1,000 |
|
Trade
and other receivables |
17,166 |
|
18,601 |
|
Inventory |
11,376 |
|
8,062 |
|
Prepaids and other current assets |
1,058 |
|
985 |
|
|
63,973 |
|
36,474 |
|
Non-current assets |
|
|
|
|
Long-term deposits |
522 |
|
540 |
|
Property, plant and equipment |
29,986 |
|
31,498 |
|
Intangible assets |
10,112 |
|
8,909 |
|
Notes
receivable |
486 |
|
494 |
|
Deferred tax assets |
1,967 |
|
2,920 |
|
Goodwill |
1,845 |
|
1,845 |
|
|
44,918 |
|
46,206 |
|
Total Assets |
108,891 |
|
82,680 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Trade
accounts payable and accrued liabilities |
12,550 |
|
12,638 |
|
Customer deposits |
8,370 |
|
8,604 |
|
Current portion of long-term debt |
2,419 |
|
784 |
|
Provisions |
469 |
|
346 |
|
Current tax liabilities |
314 |
|
227 |
|
|
24,122 |
|
22,599 |
|
Non-current liabilities |
|
|
|
|
Deferred tax liabilities |
592 |
|
744 |
|
Long-term debt |
5,673 |
|
2,074 |
|
Convertible notes |
9,904 |
|
16,279 |
|
Debt component of preferred shares |
- |
|
14,253 |
|
|
16,169 |
|
33,350 |
|
Shareholders' Equity |
|
|
|
|
Common share capital |
123,127 |
|
54,268 |
|
Preferred share capital |
- |
|
8,604 |
|
Warrants |
1,101 |
|
1,101 |
|
Equity component of convertible notes |
57 |
|
4,003 |
|
Contributed surplus |
6,192 |
|
5,748 |
|
Accumulated other comprehensive income (loss) |
1,293 |
|
(318 |
) |
Accumulated deficit |
(63,170 |
) |
(46,675 |
) |
|
68,600 |
|
26,731 |
|
Total Liabilities and Shareholders' Equity |
108,891 |
|
82,680 |
|
|
|
DIRTT Environmental Solutions Ltd. |
|
Consolidated Statements of Cash Flows |
|
(Stated in thousands of Canadian dollars) |
|
|
|
|
For the twelve months ended |
|
For the fifteen months ended |
|
|
December 31, 2013 $ |
|
December 31, 2012 $ |
|
Cash
flows from operating activities: |
|
|
|
|
Net
loss for the period |
(16,495 |
) |
(7,144 |
) |
Items
not affecting cash: |
|
|
|
|
Depreciation included in cost of goods sold |
1,936 |
|
2,770 |
|
Depreciation and amortization included in selling, general and
administrative |
6,322 |
|
7,899 |
|
Stock-based compensation |
395 |
|
681 |
|
Write-off of property, plant and equipment |
192 |
|
- |
|
Gain
on sale of property, plant and equipment |
- |
|
(85 |
) |
Loss
on derecognition of liability |
832 |
|
- |
|
Non-cash issue of warrants |
- |
|
37 |
|
Non-cash deferred tax adjustment |
841 |
|
(601 |
) |
Non-cash foreign exchange loss on debt revaluation |
1,259 |
|
- |
|
Non-cash foreign exchange loss (gain) |
439 |
|
(387 |
) |
|
(4,279 |
) |
3,170 |
|
Net
change in non-cash working capital relating to operating
activities |
(1,623 |
) |
6,221 |
|
Interest accretion |
3,180 |
|
2,045 |
|
Net cash flows (used in) from operating activities |
(2,722 |
) |
11,436 |
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
Purchase of property, plant and equipment |
(3,066 |
) |
(6,695 |
) |
Proceeds from sale of property, plant and equipment |
9 |
|
8,500 |
|
Capital expenditures on internally generated intangible assets |
(3,953 |
) |
(4,742 |
) |
Repayment (issue) of notes receivable |
8 |
|
(4 |
) |
Net cash flows used in investing activities |
(7,002 |
) |
(2,941 |
) |
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
Decrease in bank indebtedness |
- |
|
(3,775 |
) |
Issuance of share capital on IPO |
45,000 |
|
- |
|
Share
capital issuance costs |
(4,448 |
) |
- |
|
Issuance of share capital on exercise of stock options |
18 |
|
22 |
|
Proceeds (repayment) of long-term debt, net |
5,152 |
|
(8,402 |
) |
Retirement of convertible debentures |
- |
|
(9,670 |
) |
(Repayment) proceeds of convertible notes |
(10,451 |
) |
21,951 |
|
Net cash flows from financing activities |
35,271 |
|
126 |
|
|
|
|
|
|
Net
increase in cash and cash equivalents and restricted cash |
25,547 |
|
8,621 |
|
Cash and cash equivalents and restricted cash, beginning of
period |
8,826 |
|
205 |
|
Cash and cash equivalents and restricted cash, end of period |
34,373 |
|
8,826 |
|
|
|
|
|
|
Cash
and cash equivalents and restricted cash consists of: |
|
|
|
|
Cash |
4,372 |
|
7,826 |
|
Temporary investments |
30,001 |
|
- |
|
Restricted cash |
- |
|
1,000 |
|
|
34,373 |
|
8,826 |
|
About DIRTT
DIRTT Environmental Solutions (Doing It Right This Time) uses
its proprietary 3D software to design, manufacture and install
fully customized prefab interiors. DIRTT's customers in the
corporate, government, education and healthcare sectors benefit
from the Company's precise design and costing; rapid lead times
with the highest levels of customization and flexibility; and
faster, cleaner construction.
To find out more about DIRTT (TSX:DRT) please visit our website
www.dirtt.net or contact us at ir@dirtt.net.
Forward-Looking Statements
This news release contains forward-looking statements about
expected future events and financial and operating performance of
DIRTT. Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future
events or performance (often, but not always, through the use of
words or phrases such as "will likely result", "are expected to",
"will continue", "is anticipated", "believes", "estimated",
"intends", "plans", "projection" and "outlook"), are not historical
facts and may be forward-looking. Actual results or outcomes may
differ materially from those expressed in the forward-looking
information contained herein as a result of various factors. There
can be no assurance that forward-looking information will prove to
be accurate, and readers should not place undue reliance on the
forward-looking information.
With respect to forward-looking information contained in this
new release, assumptions have been made regarding, among other
things:
- DIRTT's ability to manage its growth;
- competition in the Company's industry;
- the Company's ability to enhance current products and develop
and introduce new products;
- the Company's ability to obtain components and products from
suppliers on a timely basis and on favourable terms;
- the Company's ability to obtain qualified staff and equipment
in a timely and cost-efficient manner;
- the regulatory framework governing taxes in Canada and the
United States and any other jurisdictions in which DIRTT may
conduct its business in the future;
- future development plans for the Company's assets unfolding as
currently envisioned;
- future capital expenditures to be made by the Company;
- future sources of funding for the Company's capital
program;
- the intentions of the board of directors of DIRTT with respect
to the compensation plans;
- the impact of increasing competition on the Company; and
- the Company's success in identifying other risks to its
business.
Readers are cautioned that the foregoing lists of factors are
not exhaustive. Further, forward-looking information is made as of
the date hereof, and DIRTT undertakes no obligation to update
forward-looking information to reflect events or circumstances
after the date on which such statement is made or to reflect the
occurrence of unanticipated events, except as required by law. New
factors emerge from time to time, and it is not possible for
management to predict all of these factors and to assess in advance
the impact of each such factor on the Company's business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in
forward-looking information.
For a detailed description of the risks and uncertainties facing
the Company and its business and affairs, readers should refer to
the Company's annual financial statements and management's
discussion and analysis for the 12 months ended December 31, 2013,
both of which are available at www.sedar.com.
DIRTT Environmental SolutionsScott
JenkinsPresident403.723.5009sjenkins@dirtt.netDIRTT Environmental
SolutionsDerek
PayneCFO403.313.9879dpayne@dirtt.netwww.dirtt.net
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