DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 10:00 am ET
Ladies and gentlemen, thank you for standing by and welcome to the DIRTT Environmental Solutions 2020 Second Quarter Financial Results Conference Call. [Operator Instructions].
I would now like to hand the conference over to your speaker today, Kim MacEachern, Director of Investor Relations for DIRTT. Please go ahead, ma'am
Thank you. Good morning, everyone, and welcome to today's call to discuss DIRTT's second quarter 2020 results. Joining me on the call are DIRTT's Chief Executive Officer Kevin O'Meara and Chief Financial Officer Geoff Krause. Management's prepared remarks today are accompanied by presentation slides. To access the slides, please use them from the web page of this webcast or go to the Investors section of DIRTT's website. The earnings press release that was issued yesterday afternoon can also be found on our website. Today's call will include forward-looking statements within the meaning of applicable Canadian and United States Securities Laws.
These statements are based on the company's current intent, expectations and projections. They are not guarantees of future performance. In addition, this call will include references to non-GAAP results, excluding special items. Please reference our Form 10-Q as filed on July 29, 2020 with the Securities and Exchange Commission, or SEC, and other reports and filings with the SEC for information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. I will also remind you that this webcast is being recorded and a replay will be available today at approximately one p.m. Eastern Time.
I will now turn the call over to Kevin.
Thank you, Kim, and thank you to everyone joining us today. Starting on slide four, obviously it's been a challenging time in the construction industry as all of us worked to deal with the impact of the COVID-19 pandemic on our business and the many ongoing uncertainties it has created. Similar to the first quarter, DIRTT saw the deferral of some projects due to either full job site shutdowns or slowdowns. Nonetheless, at $42.2 million, our second quarter revenue slightly exceeded our first quarter revenue. We delivered modestly positive adjusted EBITDA and we maintained our strong balance sheet, ending the quarter with just under $45 million of cash. Although to-date commercial and healthcare organizations appear to be taking a measured approach to modifying spaces in reaction to COVID-19, we continue to believe the long-term impacts of the pandemic on our business have the potential to be positive, accelerating the shift to prefabricated off-site construction and to DIRTT's modular product suite.
Post-reductions in on-site labor due to physical distancing can adversely impact construction schedules and costs, both of which are hurdles that DIRTT can help overcome. Increased focus on infection control and risk mitigation office environment may call for reduced density, increased use of private offices and other separation strategies, all of which could increase the per square foot content of DIRTT Solutions. Perhaps most importantly, spaces will need to evolve with changing circumstances. In recent months, the nature of the conversation with our clients has begun migrating