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  • 06 Jan 2026

DIRTT Announces Early Lease Termination, Shedding Multiyear Cost Drag With One-Time-Cost In 4Q:25; We Modestly Lift 2026-2027 Estimates; Maintain $2 Price Target

  • Sidoti & Company
    • Julio Romero

    • 9 pages


 

Yesterday, DIRTT announced an agreement for an early termination of its lease at its former Rock Hill, South Carolina, manufacturing facility (closed in 2023), which sheds the company of idle facility costs that were expected to continue until 2034. As a result, in 4Q:25 DIRTT incurred a $1.0 million early termination fee and a $2.3 million one-time, non-cash asset impairment charge. By our model, this takes down our 4Q:25 estimate by $0.02, to a loss per share of $0.01 (from EPS of $0.01 prior). Our 4Q:25 adjusted EBITDA forecast remains unchanged at $5.0 million, as we expect the $3.3 million of one-time costs to be adjusted out, in line with prior quarterly adjustments. (DIRTT's 4Q:25 guidance is for EBITDA of $5-7 million). Looking to 2026, DIRTT expects annualized cost savings of $1.6 million as a result of these actions. As idle facility costs are included within cost of goods sold (COGS), we believe this action will lift 2026 and 2027 gross margins by 90 basis points to 37.6% and 70 basis points to 39.1% (from 36.7% and 38.4%, respectively). We now forecast a wider 2025 loss per share of $0.06 (from $0.04), while maintaining our 2026 EPS estimate of $0.04 and ticking up our 2027 EPS estimate by a penny to $0.12 (from $0.11). Increased revenue, operating expense leverage, and use of existing deferred tax assets continue to be key earnings drivers in our model. DIRTT held net cash of $3 million as of 3Q:25. A recent letter agreement with the Business Development Bank of Canada (BDC) for a $15 million loan will allow DIRTT to refinance (and thus eliminate) half of its convertible debt (at essentially the same interest rate). Our unchanged $2 price target is based on a steady 16x our 2027 EPS estimate of $0.12 (from $0.11).

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DIRTT Announces Early Lease Termination, Shedding Multiyear Cost Drag With One-Time-Cost In 4Q:25; We Modestly Lift 2026-2027 Estimates; Maintain $2 Price Target

  • Published: 06 Jan 2026
  • Author: Julio Romero
  • Pages: 9
  • Sidoti & Company


Yesterday, DIRTT announced an agreement for an early termination of its lease at its former Rock Hill, South Carolina, manufacturing facility (closed in 2023), which sheds the company of idle facility costs that were expected to continue until 2034. As a result, in 4Q:25 DIRTT incurred a $1.0 million early termination fee and a $2.3 million one-time, non-cash asset impairment charge. By our model, this takes down our 4Q:25 estimate by $0.02, to a loss per share of $0.01 (from EPS of $0.01 prior). Our 4Q:25 adjusted EBITDA forecast remains unchanged at $5.0 million, as we expect the $3.3 million of one-time costs to be adjusted out, in line with prior quarterly adjustments. (DIRTT's 4Q:25 guidance is for EBITDA of $5-7 million). Looking to 2026, DIRTT expects annualized cost savings of $1.6 million as a result of these actions. As idle facility costs are included within cost of goods sold (COGS), we believe this action will lift 2026 and 2027 gross margins by 90 basis points to 37.6% and 70 basis points to 39.1% (from 36.7% and 38.4%, respectively). We now forecast a wider 2025 loss per share of $0.06 (from $0.04), while maintaining our 2026 EPS estimate of $0.04 and ticking up our 2027 EPS estimate by a penny to $0.12 (from $0.11). Increased revenue, operating expense leverage, and use of existing deferred tax assets continue to be key earnings drivers in our model. DIRTT held net cash of $3 million as of 3Q:25. A recent letter agreement with the Business Development Bank of Canada (BDC) for a $15 million loan will allow DIRTT to refinance (and thus eliminate) half of its convertible debt (at essentially the same interest rate). Our unchanged $2 price target is based on a steady 16x our 2027 EPS estimate of $0.12 (from $0.11).

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