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DIRTT Reports Second Quarter 2014 Results

CALGARY, ALBERTA -- (Marketwired) -- 08/07/14 -- DIRTT Environmental Solutions Ltd. ("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 six months ended June 30, 2014.

The following financial information should be read in conjunction with the Company's condensed consolidated financial statements and management's discussion and analysis for the three and six months ended June 30, 2014, 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

Highlights for the second quarter of 2014 include:


--  Revenue increasing by $3.7 million, or 9.7%, to $42.2 million compared
    with Q2 2013 and by $13.8 million, or 20.1%, to $82.7 million compared
    with the first six months of 2013;
--  Adjusted gross profit percentage (see "Non-IFRS Measures") for Q2 2014
    was 40.7% and 42.1% for the first six months of 2014;
--  Completion of a bought deal secondary offering of approximately $18.6
    million;
--  Conversion of 50% or $5.5 million principal and accrued interest of the
    14% convertible notes issued in December 2012 ("December 2012 Notes")
    into 2,430,595 Common Shares, with the other 50% converted subsequent to
    quarter end;
--  Award of a notice of contract in excess of US$30.0 million to DIRTT and
    its Distribution Partner;
--  Launch of the Employee Share Purchase Plan ("ESPP"); and
--  Launch of the new Enzo Approach to interior construction at the
    Company's annual marketing and training event in Chicago.

"The first half of 2014 saw us record a 20% improvement in top line growth versus the year ago period as our solutions continued to gain traction," said Scott Jenkins, President of DIRTT. "In the second quarter we received a notice of contract for the largest sale in the Company's history valued in excess of US$30 million gross. This type of contract demonstrates both the scalability of our solutions and our ability to supplement baseline growth with major contract wins."

"In the second quarter we closed a bought deal secondary offering that allowed certain selling shareholders to sell their shares to a syndicate of underwriters, permitting an orderly transition in our shareholder base as early stakeholders exited their positions," said Derek Payne, CFO of DIRTT. "Subsequent to the offering, we believe a number of selling shareholders were able to further reduce their positions, significantly decreasing the number of shares set to come off lock-up at the end of November 2014. We also recently saw the conversion of all of our outstanding convertible notes into common shares of the Company. This allowed us to eliminate high interest debt, further strengthening our balance sheet."

Management Announcement

DIRTT also announced today that Chief Financial Officer Derek Payne will take a temporary medical leave of absence to treat a long-standing medical condition. In the interim, Scott Jenkins will act as interim CFO with additional oversight by the board of directors.

"Derek is a core member of our team, and with the full support of our board, is taking a temporary leave to focus on getting the treatment he needs to support his continued good health," said Scott Jenkins. "We look forward to welcoming Derek back and wish him a full and speedy recovery."

Summary Financial Results


----------------------------------------------------------------------------
                                     Three months ended    Six months ended
----------------------------------------------------------------------------
                                     June 30,  June 30,  June 30,  June 30,
                                         2014      2013      2014      2013
----------------------------------------------------------------------------
($ thousands, except per share
 amounts)                                   $         $         $         $
----------------------------------------------------------------------------
Revenue                                42,218    38,494    82,733    68,885
----------------------------------------------------------------------------
Gross profit                           16,758    16,843    33,848    26,484
----------------------------------------------------------------------------
Gross profit %                           39.7%     43.8%     40.9%     38.4%
----------------------------------------------------------------------------
Adjusted gross profit % (1)              40.7%     45.2%     42.1%     40.1%
----------------------------------------------------------------------------
Selling, general and administrative    18,337    15,126    34,429    27,692
----------------------------------------------------------------------------
Operating (loss) income                (1,579)    1,717      (581)   (1,208)
----------------------------------------------------------------------------
Finance costs                             584     1,359     1,200     2,675
----------------------------------------------------------------------------
Adjusted EBITDA (1)                     1,149     4,258     4,864     3,855
----------------------------------------------------------------------------
Income tax (recovery) expense            (215)    1,074        79     1,074
----------------------------------------------------------------------------
Net loss                               (2,055)   (1,271)   (2,125)   (5,850)
----------------------------------------------------------------------------
Net loss per basic and diluted
 share:                                 (0.03)    (0.04)    (0.03)    (0.16)
----------------------------------------------------------------------------
Note:
(1)  See "Non-IFRS Measures".

Revenue

Revenue increased by $3.7 million or 9.7% in the three months ended June 30, 2014 compared with the same period in 2013. For the three months ended June 30, 2014, these increases were achieved despite the adverse winter weather conditions that impacted businesses across much of North America, particularly in the early part of the quarter. DIRTT was not immune to these conditions and experienced a particularly weak April. These conditions proved to be relatively short-lived and the Company saw a strong recovery in revenue levels for the remainder of the quarter that were in excess of levels achieved in the same period of the prior year.

Revenue increased by $13.8 million or 20.1% in the six months ended June 30, 2014 compared with the same period in 2013. Revenue in the six-month period ended June 30, 2014 was significantly influenced by a higher than normal number of project orders received late in the fourth quarter of 2013, during the traditionally slower holiday season, which drove strong revenue early in the first quarter of 2014.

As a significant amount of DIRTT's revenue is generated by the US market DIRTT also benefitted from a stronger US dollar during the three and six months ended June 30, 2014.

Included in the total revenue reported for the three and six months ended June 30, 2014, was approximately one-third and two-thirds, respectively, of the $12.0 million of significant projects announced in January 2014. These projects, for leading players in the energy, insurance and healthcare sectors, are scheduled to deliver through 2014 and into 2015.

Adjusted Gross Profit

Adjusted gross profit as a percentage of revenue decreased by 4.5% from 45.2% to 40.7% in the three months ended June 30, 2014 compared with the same period in 2013. The higher adjusted gross profit experienced during the three months ended June 30, 2013 was positively impacted by one-time adjustment items, including a final adjustment after completion of a Fortune 500 company's project.

In general, consistent manufacturing throughput throughout a quarter contributes to stronger gross profit, as this allows for more efficient operations over the period versus significant fluctuations in monthly manufacturing volumes. As a result of poor weather conditions during the first quarter of 2014, April's revenue was significantly lower than May and June which contributed to the lower adjusted gross profit % during the second quarter of 2014.

Adjusted gross profit as a percentage of revenue increased by 2.0% from 40.1% to 42.1% in the six months ended June 30, 2014 compared with the same period in 2013 even with the positive one-time adjustments experienced in the prior year as noted above. The increase was due primarily to significantly better results in the first quarter of 2014 compared with the same period in 2013. These results were achieved with a $10.1 million or 33.7% increase in revenue in the first quarter of 2014 over the same period in the prior year, leading to greater efficiencies driven by higher overall volumes in the Company's production facilities.

Selling, General and Administrative ("SG&A") Expenses

SG&A expenses increased by $3.2 million or 21.2% in the three months ended June 30, 2014 compared with the same period in 2013. The most significant change can be attributed directly to sales-related efforts as salaries and benefits and commission expense for internal sales representatives and industry specific experts increased by $0.9 million and $0.3 million, respectively. These costs reflect personnel additions focused on generating and supporting higher business volumes, and are consistent with the use of proceeds as outlined in the prospectus filed in respect of DIRTT's IPO. Higher commission costs are in line with the increased revenue volumes in the current quarter. Other increases in SG&A in the current quarter included travel and marketing costs of $0.7 million, depreciation expense of $0.6 million, and $0.2 million in other miscellaneous items. The increase in travel and marketing costs was mainly due to the previously discussed annual marketing initiative in Chicago in June, with a total cost of $1.3 million incurred during the three months ended June 30, 2014 compared with $1.1 million in the same period in 2013. The increase was due to additional attendees for the event and training and for external tours through the newly refreshed GLC showcasing the latest DIRTT solutions. This cost does not occur in any other month but includes marketing and training efforts that benefit DIRTT throughout the remainder of the year and beyond. The stronger US dollar contributed to the overall increase in SG&A across the organization in the current quarter.

SG&A costs in the period also included $0.5 million in transaction costs related to the secondary offering that was completed in June 2014. Despite the fact that the Company did not receive any proceeds from the secondary offering, under the terms of agreements with certain shareholders DIRTT was responsible for the costs of the secondary offering.

SG&A expenses increased by $6.7 million or 24.3% in the six months ended June 30, 2014 compared with the same period in 2013. The increase was due to increases in salaries and benefits of $2.2 million, travel and marketing costs of $1.2 million, depreciation expense of $1.0 million, commission expense of $0.9 million, transaction costs from the secondary offering of $0.5 million, office supplies of $0.3 million, rent expense of $0.2 million, insurance expense of $0.1 million and $0.3 million in other miscellaneous items. Included in the $2.2 million increase in salaries and benefits is $0.3 million in accrued bonuses for senior management in accordance with the Board-approved 2014 bonus pool. The increase in salaries and benefits and commission expense are due to the same reasons as discussed above.

Adjusted EBITDA

Adjusted EBITDA decreased by $3.1 million in the three months ended June 30, 2014 compared with the same period in 2013. The decrease was mainly due to a lower adjusted gross profit percentage which dropped from 45.2% to 40.7% and increased SG&A of $3.2 million. These amounts were partially offset by increased revenue of $3.7 million.

Adjusted EBITDA increased by $1.0 million in the six months ended June 30, 2014 compared with the same period in 2013. The increase was mainly due to the $13.8 million increase in revenue, and the resulting improved adjusted gross profit percentage which grew from 40.1% to 42.1%. These amounts were partially offset by increased SG&A of $6.7 million for the reasons discussed above.

Finance Costs

Finance costs decreased by $0.8 million in the three months ended June 30, 2014 compared with the same period in 2013. Finance costs for the three months ended June 30, 2014 were comprised of $0.4 million non-cash and $0.2 million cash costs compared with $0.9 million and $0.4 million, respectively, for the same period in 2013. In November 2013, upon completion of the IPO, the Class A preferred shares and the convertible notes issued in June 2012 ("June 2012 Notes") were converted into Common Shares and as a result there were no accretion or accrued interest amounts reported during 2014 related to those items. Upon completion of the IPO, the Company also repaid US$10.0 million of the original US$20.0 million of December 2012 Notes. Under the terms of the note purchase agreement on the remaining principal portion of the December 2012 Notes, the interest rate increased from 8% to 14% (12% cash and 2% non-cash) effective March 7, 2014. The 2% non-cash portion of the interest is included with the accretion expense in the accreted / accrued interest (non-cash) section of the table above. In June 2014, in connection with the secondary offering, US$5.0 million of the then-remaining US$10.0 million December 2012 Notes plus all accrued interest at the time of conversion were converted into Common Shares.

Finance costs decreased by $1.5 million in the six months ended June 30, 2014 compared with the same period in 2013. Finance costs for the six months ended June 30, 2014 were comprised of $0.6 million non-cash and $0.6 million cash costs compared with $1.8 million and $0.9 million, respectively, for the same period in 2013. The reasons for the decrease are the same as discussed above.

Secondary Offering

In June 2014, the Company completed a secondary offering on a bought-deal basis, whereby a total of approximately 7.2 million Common Shares were sold by a group of selling shareholders to a syndicate of underwriters at an offering price of $2.60 per Common Share. DIRTT did not receive any proceeds from the secondary offering but incurred $0.5 million in transaction costs.

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. The total US construction market was US$900 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 forecasted 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 increasing roster of repeat clients is a strong testament to the benefits of technology-enabled prefabricated solutions.

DIRTT believes its solutions 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 revenue. The Company plans to invest additional resources, including the further development of ICE and the development of new DIRTT Solutions and test projects, to pursue further 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.

Looking at the American Institute of Architects' (AIA) Architecture Billings Index (ABI), which is a useful leading economic indicator of how non-residential billing activity could trend, the overall March numbers showed a decline in billings and enquiries due to the unseasonably cold and stormy weather that gripped much of the continent. As anticipated, the second quarter of 2014 got off to a slow start as adverse weather conditions negatively impacted sales volumes in April. These conditions were short-lived and monthly revenue bounced back as sales volume returned to anticipated levels. This momentum continued into the early part of the third quarter of 2014. This is consistent with the most recently released ABI numbers from the AIA for June 2014 which were at the strongest level since September 2013. The AIA believes that these numbers point to improved fundamentals that could support growth across all segments of the building industry for the next nine to 12 months.

In June 2014, DIRTT received notice of award for a project valued in excess of US$30.0 million to DIRTT and its Distribution Partner Agile OFIS of Houston, Texas, which is scheduled to commence during the first quarter of 2015 and is expected to be substantially completed in 2015.

Liquidity and Capital Resources

At June 30, 2014, DIRTT had $26.4 million in cash and cash equivalents compared with $34.4 million at December 31, 2013. At June 30, 2014, the Company had an undrawn US$18.0 million revolving operating facility.

Non-IFRS Measures

Adjusted gross profit, adjusted gross profit %, EBITDA, and Adjusted EBITDA are non-IFRS measures used by management to assess 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 its financial statements. Please refer to the Company's management's discussion and analysis for three and six months ended June 30, 2014 for a definition and reconciliation of the non-IFRS measures used herein.

Conference Call Details

DIRTT will host a conference call and webcast on Friday, August 8, 2014 at 7 a.m. MT (9 a.m. ET) to discuss its second quarter results in greater detail. President Scott Jenkins and CFO Derek Payne will participate.

To access the conference call by telephone dial +1 416.764.8688 (Toronto and international callers) or 1.888.390.0546 (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 www.newswire.ca/en/webcast/detail/1387857/1539755.

Investors are invited to submit questions by email before and during the conference call. Please send them to [email protected].

A replay of the conference call will be available at +1 416.764.8677 or 1.888.390.0541, passcode 571299, from noon (ET) Friday August 8, 2014 to midnight (ET) Friday, August 15, 2014 or through the webcast archives at 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 three months    For the six months
                                                ended                 ended
----------------------------------------------------------------------------
                                  June 30,   June 30,   June 30,   June 30,
                                      2014       2013       2014       2013
----------------------------------------------------------------------------
                                         $          $          $          $
----------------------------------------------------------------------------
Revenue                             42,218     38,494     82,733     68,885
----------------------------------------------------------------------------
Cost of goods sold                  25,460     21,651     48,885     42,401
----------------------------------------------------------------------------
Gross profit                        16,758     16,843     33,848     26,484
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Selling, general and
 administrative                     18,337     15,126     34,429     27,692
----------------------------------------------------------------------------
Operating (loss) income             (1,579)     1,717       (581)    (1,208)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Foreign exchange loss                   29        557        257        899
----------------------------------------------------------------------------
Gain on sale of property, plant
 and equipment                         (18)         -        (18)         -
----------------------------------------------------------------------------
Loss on derecognition of
 liability                             153          -        153          -
----------------------------------------------------------------------------
Interest income                        (57)        (2)      (127)        (6)
----------------------------------------------------------------------------
Finance costs                          584      1,359      1,200      2,675
----------------------------------------------------------------------------
Loss before tax                     (2,270)      (197)    (2,046)    (4,776)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Current tax expense                    232        497        544        497
----------------------------------------------------------------------------
Deferred tax (recovery) expense       (447)       577       (465)       577
----------------------------------------------------------------------------
                                      (215)     1,074         79      1,074
----------------------------------------------------------------------------
Net loss for the period             (2,055)    (1,271)    (2,125)    (5,850)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Other comprehensive (loss)
 income
----------------------------------------------------------------------------
Items that will not be
 reclassified to profit or loss:
----------------------------------------------------------------------------
Exchange differences on
 translation of foreign
 operations, net of tax of $nil
 (2013 - $nil)                        (907)       931        123      1,428
----------------------------------------------------------------------------
Total comprehensive loss for the
 period                             (2,962)      (340)    (2,002)    (4,422)
----------------------------------------------------------------------------
Loss per share
----------------------------------------------------------------------------
Basic and diluted                    (0.03)     (0.04)     (0.03)     (0.16)
----------------------------------------------------------------------------

DIRTT Environmental Solutions Ltd.
Consolidated Statements of Financial Position
(Stated in thousands of Canadian dollars)

----------------------------------------------------------------------------
As at                                                June 30,  December 31,
                                                         2014          2013
----------------------------------------------------------------------------
                                                            $             $
----------------------------------------------------------------------------
ASSETS
----------------------------------------------------------------------------
Current Assets
----------------------------------------------------------------------------
Cash and cash equivalents                              26,364        34,373
----------------------------------------------------------------------------
Trade and other receivables                            22,879        17,166
----------------------------------------------------------------------------
Inventory                                               9,709        11,376
----------------------------------------------------------------------------
Prepaids and other current assets                       3,421         1,058
----------------------------------------------------------------------------
                                                       62,373        63,973
----------------------------------------------------------------------------
Non-current Assets
----------------------------------------------------------------------------
Long-term deposits                                        590           522
----------------------------------------------------------------------------
Property, plant and equipment                          30,751        29,986
----------------------------------------------------------------------------
Intangible assets                                      11,138        10,112
----------------------------------------------------------------------------
Notes receivable                                          476           486
----------------------------------------------------------------------------
Deferred tax assets                                     2,092         1,967
----------------------------------------------------------------------------
Goodwill                                                1,845         1,845
----------------------------------------------------------------------------
                                                       46,892        44,918
----------------------------------------------------------------------------
Total Assets                                          109,265       108,891
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------
Current Liabilities
----------------------------------------------------------------------------
Trade accounts payable and accrued liabilities         17,580        12,550
----------------------------------------------------------------------------
Customer deposits                                       5,417         8,370
----------------------------------------------------------------------------
Current portion of long-term debt                       2,422         2,419
----------------------------------------------------------------------------
Provisions                                                358           469
----------------------------------------------------------------------------
Current tax liabilities                                   613           314
----------------------------------------------------------------------------
                                                       26,390        24,122
----------------------------------------------------------------------------
Non-current Liabilities
----------------------------------------------------------------------------
Deferred tax liabilities                                  257           592
----------------------------------------------------------------------------
Long-term debt                                          4,474         5,673
----------------------------------------------------------------------------
Convertible notes                                       5,182         9,904
----------------------------------------------------------------------------
                                                        9,913        16,169
----------------------------------------------------------------------------
Shareholders' Equity
----------------------------------------------------------------------------
Common share capital                                  129,809       123,127
----------------------------------------------------------------------------
Warrants                                                1,101         1,101
----------------------------------------------------------------------------
Equity component of convertible notes                      28            57
----------------------------------------------------------------------------
Contributed surplus                                     5,903         6,192
----------------------------------------------------------------------------
Accumulated other comprehensive income                  1,416         1,293
----------------------------------------------------------------------------
Accumulated deficit                                   (65,295)      (63,170)
----------------------------------------------------------------------------
                                                       72,962        68,600
----------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity            109,265       108,891
----------------------------------------------------------------------------

DIRTT Environmental Solutions Ltd.
Consolidated Statements of Cash Flows
(Stated in thousands of Canadian dollars)

----------------------------------------------------------------------------
                                 For the three months    For the six months
                                                ended                 ended
----------------------------------------------------------------------------
                                  June 30,   June 30,   June 30,   June 30,
                                      2014       2013       2014       2013
----------------------------------------------------------------------------
                                         $          $          $          $
----------------------------------------------------------------------------
Cash flows from operating
 activities:
----------------------------------------------------------------------------
Net loss for the period             (2,055)    (1,271)    (2,125)    (5,850)
----------------------------------------------------------------------------
Items not affecting cash:
----------------------------------------------------------------------------
Depreciation included in cost of
 goods sold                            442        571        975      1,171
----------------------------------------------------------------------------
Depreciation and amortization
 included in selling, general
 and administrative                  2,137      1,530      4,089      3,108
----------------------------------------------------------------------------
Stock-based compensation                56        129        103        271
----------------------------------------------------------------------------
Loss on derecognition of
 liability                             153          -        153          -
----------------------------------------------------------------------------
Write off of property, plant and
 equipment                               -        217          -        217
----------------------------------------------------------------------------
Gain on sale of property, plant
 and equipment                         (18)         -        (18)         -
----------------------------------------------------------------------------
Income tax provision                  (215)     1,074         79      1,074
----------------------------------------------------------------------------
Finance cost                           584      1,359      1,200      2,675
----------------------------------------------------------------------------
Non-cash foreign exchange (gain)
 loss on debt revaluation             (389)       651         24      1,195
----------------------------------------------------------------------------
Non-cash foreign exchange (gain)
 loss                                 (393)       277         46        470
----------------------------------------------------------------------------
Net change in non-cash working
 capital relating to operating
 activities                            353       (532)    (4,545)    (1,284)
----------------------------------------------------------------------------
Cash taxes paid                        (72)         -       (229)         -
----------------------------------------------------------------------------
Net cash flows provided by (used
 in) operating activities              583      4,005       (248)     3,047
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cash flows from investing
 activities:
----------------------------------------------------------------------------
Purchase of property, plant and
 equipment                          (3,127)    (1,222)    (4,174)    (1,936)
----------------------------------------------------------------------------
Capital expenditures on
 internally generated intangible
 assets                             (1,267)    (1,069)    (2,602)    (2,209)
----------------------------------------------------------------------------
Proceeds from sale of property,
 plant and equipment                    22          -         22          -
----------------------------------------------------------------------------
Receipt of proceeds from notes
 receivable                              5          -         10          -
----------------------------------------------------------------------------
Net cash flows used in investing
 activities                         (4,367)    (2,291)    (6,744)    (4,145)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cash flows from financing
 activities:
----------------------------------------------------------------------------
Issuance of share capital on
 exercise of stock options             664         13        761         13
----------------------------------------------------------------------------
Interest paid on convertible
 notes                                (161)      (421)      (413)      (829)
----------------------------------------------------------------------------
Proceeds of long-term debt               -      3,232          -      3,232
----------------------------------------------------------------------------
Repayment of long-term debt           (607)       (62)    (1,218)      (643)
----------------------------------------------------------------------------
Interest paid on long-term debt        (70)       (24)      (147)       (55)
----------------------------------------------------------------------------
Net cash flows (used in)
 provided by financing
 activities                           (174)     2,738     (1,017)     1,718
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Net (decrease) increase in cash
 and cash equivalents               (3,958)     4,452     (8,009)       620
----------------------------------------------------------------------------
Cash and cash equivalents and
 restricted cash, beginning of
 period                             30,322      4,994     34,373      8,826
----------------------------------------------------------------------------
Cash and cash equivalents, end
 of period                          26,364      9,446     26,364      9,446
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cash and cash equivalents
 consists of:
----------------------------------------------------------------------------
Cash                                 3,209      9,446      3,209      9,446
----------------------------------------------------------------------------
Temporary investments               23,155          -     23,155          -
----------------------------------------------------------------------------
                                    26,364      9,446     26,364      9,446
----------------------------------------------------------------------------

About DIRTT

DIRTT Environmental Solutions (Doing It Right This Time) uses its proprietary 3D software to design, manufacture and install fully customized prefab interiors. The Company's customers in the corporate, government, education and healthcare sectors benefit from DIRTT's precise design and costing; rapid lead times with the highest levels of customization and flexibility; and faster, cleaner construction.

DIRTT manufacturing facilities are in Phoenix, Savannah, Kelowna and Calgary. DIRTT's teams support more than 100 Distribution Partners throughout North America, the Middle East and Asia. For more information please visit www.dirtt.net.

To find out more about DIRTT (TSX: DRT) please visit our website www.dirtt.net or contact us at [email protected].

Forward-Looking Statements

Certain information and statements contained in this news release constitute "forward-looking information" and "forward-looking statements" (collectively, "Forward-Looking Information") as defined under applicable Canadian securities laws and the Company hereby cautions investors about important factors that could cause the Company's actual results or outcomes to differ materially from those projected in any Forward-Looking Information contained in this news release. 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 and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such Forward-Looking Information.

In particular and without limitation, this news release contains Forward-Looking Information pertaining to the following: comments with respect to the Company's revenue, objectives and priorities for 2014 and beyond; project timetables; its growth strategies and opportunities; its ability to meet working capital requirements and financial obligations; the launch of the ESPP; use of proceeds from the IPO; and its outlook for its operations and the Canadian, US and international economies, and in particular, the US construction industry.

With respect to Forward-Looking Information contained in this news release, assumptions have been made regarding the Company, among other things:


--  its ability to manage its growth;
--  competition in its industry;
--  its ability to enhance current products and develop and introduce new
    products;
--  its ability to obtain components and products from suppliers on a timely
    basis and on favourable terms;
--  its ability to obtain qualified staff and equipment in a timely and
    cost-efficient manner;
--  the regulatory framework governing taxes in Canada and the US and any
    other jurisdictions in which the Company may conduct its business in the
    future;
--  future development plans for its assets unfolding as currently
    envisioned;
--  future capital expenditures to be made by the Company;
--  future sources of funding for its capital program;
--  the impact of increasing competition on the Company; and
--  its success in identifying risks to its business and managing the risks
    mentioned below.

The Company's actual results or outcomes could differ materially from those expressed in the Forward-Looking Information as a result of the risks normally encountered in its industry such as:


--  maintaining and managing growth;
--  history of losses;
--  risks related to global financial crisis;
--  risks related to new technology;
--  competition risks;
--  operating results and financial condition fluctuations on a quarterly
    and annual basis;
--  risks related to intellectual property;
--  risks related to additional capital requirements;
--  customer base and market acceptance;
--  software and product defects and design risks;
--  availability of key supplies;
--  dependence on key personnel and consultants;
--  commodity price risk;
--  risks related to restricted covenants;
--  credit risk;
--  the effect of government regulation;
--  risks related to international expansion;
--  risks related to physical facilities;
--  legal risks;
--  foreign currency and fiscal matters;
--  risks related to future acquisitions;
--  risks related to Forward-Looking Information;
--  reliance on third parties; and
--  conflicts of interest.

Since actual results or outcomes could differ materially from those expressed in the Forward-Looking Information provided by or on behalf of the Company, investors and others should not place undue reliance on any such Forward- Looking Information.

DIRTT cautions that the foregoing lists of factors are not exhaustive. Further, Forward-Looking Information is made as of the date hereof, and the Company 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 applicable Canadian securities laws. New factors emerge from time to time, and it is not possible for DIRTT's 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. No assurance can be given that these expectations will prove to be correct and such Forward-Looking Information contained in this news release should not be unduly relied upon. In addition, this news release may contain Forward-Looking Information attributed to third party industry sources.

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, management's discussion and analysis and annual information form for the 12 months ended December 31, 2013, all of which are available at www.sedar.com.

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In 2014, the market witnessed a massive migration to the cloud as enterprises finally overcame their fears of the cloud’s viability, security, etc. Over the past 18 months, AWS, Google and Microsoft have waged an ongoing battle through a wave of price cuts and new features. For IT executives, sorting through all the noise to make the best cloud investment decisions has become daunting. Enterprises can and are moving away from a "one size fits all" cloud approach. The new competitive field has ...
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
Everyone talks about continuous integration and continuous delivery but those are just two ends of the pipeline. In the middle of DevOps is continuous testing (CT), and many organizations are struggling to implement continuous testing effectively. After all, without continuous testing there is no delivery. And Lab-As-A-Service (LaaS) enhances the CT with dynamic on-demand self-serve test topologies. CT together with LAAS make a powerful combination that perfectly serves complex software developm...
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises ar...
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Moving an existing on-premise infrastructure into the cloud can be a complex and daunting proposition. It is critical to understand the benefits as well as the challenges associated with either a full or hybrid approach. In his session at 17th Cloud Expo, Richard Weiss, Principal Consultant at Pythian, will present a roadmap that can be leveraged by any organization to plan, analyze, evaluate and execute on a cloud migration solution. He will review the five major cloud transformation phases a...
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing thes...
eCube Systems has released NXTmonitor, a full featured application orchestration solution. NXTmonitor, which inherited the code base of NXTminder, has been extended to support multi-discipline processes and will act as a DevOps utility in a heterogeneous enterprise environment. Previously, NXTminder was packaged with NXTera middleware to configure and manage Entera and NXTera RPC servers. “Since we are widening the focus of this solution to DevOps, we felt the need to change the name to NXTmon...
Amazon and Google have built software-defined data centers (SDDCs) that deliver massively scalable services with great efficiency. Yet, building SDDCs has proven to be a near impossibility for ‘normal’ companies without hyper-scale resources. In his session at 17th Cloud Expo, David Cauthron, founder and chief executive officer of Nimboxx, will discuss the evolution of virtualization (hardware, application, memory, storage) and how commodity / open source hyper converged infrastructure (HCI) so...
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device acce...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
Enterprises can achieve rigorous IT security as well as improved DevOps practices and Cloud economics by taking a new, cloud-native approach to application delivery. Because the attack surface for cloud applications is dramatically different than for highly controlled data centers, a disciplined and multi-layered approach that spans all of your processes, staff, vendors and technologies is required. This may sound expensive and time consuming to achieve as you plan how to move selected applicati...
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small,...