Calgary’s DIRTT seeking to break into residential construction industry

CALGARY C As the American home construction industry rebounds, one Calgary-based interior planning and manufacturing company is looking to break in.

DIRTT Environmental Solutions, a business that uses 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 and then manufactures customizable walls and offices that allow buyers to manipulate the area as their 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 an incentive. “For us, it is the next reasonable step,” he explained.

The National Association of Home Builders, a sizable U.S. industry group, released data now showing that single-family housing starts are actually up their highest levels since 2007, once the sector peaked after which fell as a result of the truly amazing Recession beginning in 2008.

“As the U.S. economy firms, job creation continues and mortgage rates remain low, we should see further growth in housing production moving forward,” NAHB chief economist David Crowe said in a Wednesday release.

Payne said the organization doesn’t expect to post “meaningful” revenues from residential construction and renovation projects for a long time.

DIRTT taken in $64 million in revenues within the fourth quarter, a 12 percent gain on its $57 million revenue figure from the same period last year. At the same time, it’s net gain grew to $9.A million, that is up 39 per cent in the same quarter in 2014.

Raymond James analyst David Quezada said a “miniscule slice” of the U.S. home construction market could be meaningful for DIRTT. “The company has suggested it might eventually become as huge as the present non-residential business,” Quezada said.

The company’s software, called ICE, allows users to create office or residential spaces while ICE tabulates the total cost of the products, which arrive within 3 weeks.

Normally, Payne said, “custom costs more money, however with DIRTT custom is standard.”

While the organization hopes its software can offer an edge entering the residential market, it’s also fighting to help keep competitors outside market. DIRTT is suing Iowa-based Allsteel Inc., which is countersuing, for wilful patent infringement and indicated it might launch additional lawsuits as necessary.

“We have the balance sheet, the strength and the resolve and we’ll protect our intellectual property,” 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