CALGARY C Because the American house construction industry rebounds, one Calgary-based interior planning and manufacturing clients are seeking to break in.
DIRTT Environmental Solutions, a company that utilizes proprietary software to streamline interior planning and work place projects, is targeting renewed development in the U.S. construction sector to go in the residential market.
“We’re going head-on into the construction industry, which hasn’t had much technology since dry wall, that is celebrating its 100th birthday this year,” DIRTT’s chief financial officer Derek Payne said.
Instead of drywall, Payne said the Calgary-based company designs after which manufactures customizable walls and office spaces that allow buyers to manipulate the area his or her offices shrink or grow.
After initially individuals corporate office market, DIRTT has since grown its business by doing interior renovations and new-builds at hospitals and clinics as well as schools and colleges.
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Now, as DIRTT is trying to push into residential construction, Payne said the sector’s rapid growth in the U.S. is definitely an incentive. “For us, it’s the next reasonable step,” he explained.
The National Association of Home Builders, a large U.S. industry group, released data now showing that single-family housing starts are now up their highest levels since 2007, when the sector peaked and then fell because of the Great Recession starting in 2008.
“As the U.S. economy firms, job creation continues and mortgage rates remain low, we should see further development in housing production continuing to move forward,” NAHB chief economist David Crowe said inside a Wednesday release.
Payne said the company doesn’t expect to post “meaningful” revenues from residential construction and renovation projects for a long time.
DIRTT pulled in $64 million in revenues in the fourth quarter, a 12 percent gain on its $57 million revenue figure in the same period last year. At the same time, it’s net income grew to $9.A million, that is up 39 per cent from the same quarter in 2014.
Raymond James analyst David Quezada said even a “miniscule slice” of the U.S. home construction market could be meaningful for DIRTT. “The company has suggested it could eventually be as large as the present non-residential business,” Quezada said.
The company’s software, called ICE, allows users to design office or residential spaces while ICE tabulates the entire price of these products, which arrive within 3 weeks.
Normally, Payne said, “custom costs more money, however with DIRTT custom is standard.”
While the company hopes its software will give it an advantage entering the residential market, it’s also fighting to keep competitors out of the office market. DIRTT is suing Iowa-based Allsteel Inc., which is countersuing, for wilful patent infringement and indicated it would launch additional lawsuits as necessary.
“We possess the balance sheet, the strength and also the resolve and we’ll protect our ip,” DIRTT president Scott Jenkins said on Thursday’s business call.
DIRTT’s shares rose 5.68 per cent Thursday, closing $5.95 in Toronto.
gmorgan@nationalpost.com
Twitter.com/geoffreymorgan
