 Announces Additions to Board of DirectorsCALGARY, Alberta, July 29, 2020 GLOBE NEWSWIRE -- DIRTT Environmental Solutions Ltd. DIRTT, the Company, we or us TSX: DRT, NASDAQ: DRTT, an interior construction company that uses technology for client-driven design and manufacturing, today announced its financial results for the three and six months ended June 30, 2020. All financial information in this news release is presented in U.S. dollars, unless otherwise stated. Second Quarter 2020 Revenue of 42.2 million Gross profit margin of 33.7 Adjusted Gross Profit Margin1 of 38.2 Net income of 0.3 million Net income margin of 0.7 Adjusted EBITDA1 of 0.3 million Adjusted EBITDA Margin1 of 0.6 44.6 million cash balanceNote: 1 See Non-GAAP Financial Measures. We have revised our calculations of Adjusted Gross Profit Margin and Adjusted EBITDA for the periods presented. Management CommentaryWe continued making steady progress in implementing key elements of our strategic plan despite adjusting our hiring plans in reaction to the COVID-19 pandemic, stated CEO Kevin OMeara. Strengthening our commercial capabilities, we welcomed our director of strategic accounts and enterprise sales, whose industry experience includes 25 years with Herman Miller, most recently as Senior Vice President of Sales and five years as president of Trendway, a manufacturer of office furniture and systems. We hired the last of our four regional sales directors, broadened our partner network with five new partners, and will soon re-open our DIRTT Experience Centers to client tours. We also implemented phase one of our CRM system, which we expect will significantly strengthen our ability to manage lead generation and our end to end sales pipeline.Leveraging our many new capabilities, on July 7th we launched Make Space for PossibilitiesTM, DIRTTs first-ever comprehensive strategic marketing campaign. The campaign integrates our Companys expanded sales, marketing and product efforts, illustrating our in-depth approach to enhancing sales execution. Make Space for PossibilitieTM highlights the ability of DIRTT solutions to meet the needs of individuals, teams and organizations seeking greater adaptability within their workplaces and real estate portfolios as they adjust to the long-term impacts of COVID-19.Mr. OMeara concluded, Despite dramatic economic shifts due to the pandemic and its impact on the construction industry, our second quarter revenue of 42.2 million slightly exceeded our first quarter revenue and we delivered modestly positive adjusted EBITDA. Given the uncertain macro-environment, we continued to take measures to conserve financial liquidity and maintain our strong balance sheet and ended the quarter with just under 45 million of cash. In the second half of 2020, we will be laser-focused on leveraging opportunities to accelerate the shift from conventional to modular construction and, in the process, positioning DIRTT to achieve sustained, long-term market share growth.Board of DirectorsDIRTT is pleased to announce that Michael T. Ford and Shauna R. King will be joining the Companys board effective August 1, 2020. Mr. Ford is Head of Global Real Estate Security for Microsoft Corporation, with responsibility for a multi-billion-dollar real estate portfolio including more than 38 million square feet across 113 countries. Ms. King was formerly Vice President, Finance and Business Operations for Yale University and, prior to that, held many leadership positions with PepsiCo, Inc., including Global Chief Information Officer and Chief Transformation Officer. DIRTT also announces the resignation of Christine McGinley from the board, effective August 31. Ms. McGinley has been a director of DIRTT since 2013 and is the current chair of the Audit Committee. Ms. McGinley was instrumental in leading the boards efforts in relation to the Companys recent Nasdaq listing and the Companys conversion from IFRS accounting to US GAAP. Management and the board thank Ms. McGinley for her significant contributions to the board and the Company.Upon the effectiveness of their appointment, Mr. Ford and Ms. King will both join the Audit Committee along with current members Wayne Boulais and Denise Karkkainen, with Ms. King assuming the role of Audit Committee Chair.Second Quarter Financial ReviewRevenue for the second quarter of 2020 was 42.2 million compared to 64.1 million reported in the second quarter of 2019. In the second quarter of 2020, we experienced the ongoing effects of disruption in sales activity levels stemming from the transitional state of our commercial function as we implement our strategic plan. Our revenues were also impacted by the COVID-19 pandemic. We estimate approximately 3.7 million of projects that we were highly confident of second quarter delivery at March 15 which were deferred to future quarters in addition to opportunities that would normally have come to fruition that were delayed or deferred, the amount of which is not possible to quantify.Correspondingly, gross profit for the second quarter of 2020 declined to 14.2 million from 24.4 million in the prior year period. Gross profit margin decreased to 33.7 of revenue in the second quarter from 38.1 in the prior year period, but up from 27.6 in the first quarter of 2020. Gross profit for the second quarter was impacted by reduced fixed cost leverage on lower revenues and 0.5 million of severance costs offset by a 1.2 million timber provision reversal, following the validation of an in-situ remediation solution.Adjusted Gross Profit Margin in the second quarter decreased to 38.2 from 42.1 in the prior year period.Sales and marketing expenses decreased to 6.2 million for the second quarter of 2020 from 9.5 million in the prior year period. The decline was caused primarily by a reduction in commission expense on lower revenue; lower travel, meals and entertainment expenses due to restriction on travel as a result of COVID-19; the cancellation of the annual Connext trade show in June as a result of COVID-19; as well as continued attention to cost discipline. Included in sales and marketing expenses in the prior year period were 1.3 million of consulting costs related to our sales and marketing plan that did not recur in 2020. As economies re-open, we anticipate travel and entertainment expenses to increase over current levels, the timing and amount of which, however, are indeterminate.General and administrative expenses decreased to 6.2 million for the second quarter of 2020 from 6.9 million for the prior year period. The decrease reflects expense reductions, both deliberate and as a result of COVID-19 combined with 0.4 million of professional fees related to the listing of our common shares on Nasdaq that did not recur. These reductions were partially offset by 0.9 million of higher legal costs.Operations support expenses decreased to 2.3 million in the second quarter of 2020 from 2.9 million for the prior year period. In the second quarter of 2019 we incurred 0.7 million of consulting costs to assist with the rectification of the tile warping issue that did not recur in 2020.Technology and development expenses of 2.1 million for the second quarter of 2020 were consistent with 2.0 million in the prior year period.Net income for the second quarter of 2020 was 0.3 million or 0.00 per share compared to net income of 2.6 million or 0.03 per share for the second quarter of 2019. The decrease was a result of changes in gross profit and operating expenses as described above, increased stock-based compensation expense, as in 2019 stock-based compensation expense included a fair value adjustment on cash settled options, and a 0.5 million increase in foreign exchange losses partially offset by 4.3 million of government subsidies and lower income tax expense. Adjusted EBITDA and Adjusted EBITDA Margin for the three months ended June 30, 2020 decreased to 0.3 million or 0.6 from 6.0 million or 9.4 in the same period of 2019. This reflects a 10.9 million decrease in Adjusted Gross Profit and 0.9 million of higher legal costs in 2020, partially offset by reduced commissions on lower revenues and decreased spending on travel, meals and entertainment, including tradeshows due to COVID-19 as well as cost reduction initiatives. Additionally, in the second quarter of 2019 we incurred 1.3 million of consulting costs for our sales and marketing plan and 0.4 million of costs related to the listing of our common shares on Nasdaq, neither of which recurred in 2020.Conference Call and Webcast DetailsA conference call and webcast for the investment community is scheduled for Thursday, July 30, 2020 at 8:00 a.m. MDT 10:00 a.m. EDT. The call and webcast will be hosted by Kevin OMeara, chief executive officer, Geoff Krause, chief financial officer, and Kim MacEachern, director of investor relations.The conference call will be broadcast live in listen-only mode available through the Company website at dirtt.cominvestors. Alternatively, click here to listen to the live webcast.To join by telephone, dial 1-877-479-7708 toll-free in North America or 1-647-427-2478 international. Please dial in a minimum of 15 minutes prior to the start time.Investors are invited to submit questions to before and during the call. Supplemental information slides will be available within the webcast and at dirtt.cominvestors prior to the call start.A replay of the webcast will be available online and on DIRTTs website.Statement of OperationsThe following unaudited table presents DIRTTs consolidated statements of operations for the three and six -month periods ended June 30, 2020 and 2019. 