speaker
Conference Operator
Conference Operator

Thank you for standing by. This is the conference operator. Welcome to the DIRT Environmental Solutions Second Quarter 2023 Financial Results Conference Call. As a reminder, all participants are in the listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. And to join the question queue, you may press star 11 on your telephone keypad. And to withdraw your question, please press star 1-1 again. I would now like to turn the conference over to Shawna Mazin, Director of Corporate Affairs. Please go ahead.

speaker
Shawna Mazin
Director of Corporate Affairs

Thank you, Operator, and good morning, everyone. Welcome to today's call to discuss DIRT's second quarter 2023 results. Joining me on the call today will be Benjamin Urban, CEO, Brad Little, CFO, and Freya Khan, Vice President of Finance. Today's prepared remarks are accompanied by presentation slides. To access these slides, please view them from the webpage of this webcast or on our website at DIRT.com. Today's call will include forward-looking statements within the meaning of applicable Canadian and United States security 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 reference non-GAAP results, excluding special items. Please reference our Form 10-Q as filed on August 2, 2023, 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 gap results. I will also remind you that this webcast is being recorded and a replay will be available tomorrow. I now turn the call over to Benjamin.

speaker
Benjamin Urban
CEO

Thank you, Shauna, and good morning, everyone. Before I begin, I want to start by thanking all of our team members, our partners, and numerous end customers. Looking back on the completion of my first full year with DIRT, I'm proud of the successful efforts of all of our team members and partners who have helped transform this company. We have more work to do. However, we have better line of sight to consistent profitability and growth with Q2 results proving that out. The positive feedback shared from our customers and construction partners continues to grow. On the heels of our most successful Conext, our open house in Chicago that coincides with Neocon, the sentiment was a strong dirt is back buzz with attendance up 30% over last year. More importantly, with an attendee mix of more first-time attendees, both customers as well as architects and designers. The revised strategy within our commercial organization continues to provide improved results in the last quarter. During Connext, our product development team unveiled seven new competitive product solutions, which received overwhelmingly positive feedback from our customers and construction partners. We will continue to roll out additional products and enhancements throughout the second half of the year. DIRT has undertaken a strategic initiative aimed at augmenting and broadening our partner network. In line with this objective, we have successfully onboarded a new partner in both Florida and Alabama, and additionally, we have strengthened our presence by expanding partnerships in Northern California and Winnipeg, alongside six grand openings of new experience centers in the last quarter, with five more before the end of the year. These experience centers are a critical component to our success by growing and converting sales opportunities. In May, we conducted our first inaugural in-person masterclass for all of our sales representatives in Calgary, making the first such event in the last four years. The feedback from our sales representatives and leadership is that we haven't been this aligned as a commercial organization in recent memory. In addition to the sales training, our sales force is also growing. We added six new sales reps and a healthcare vertical specialist in the last quarter, and we'll fill four more roles in the second half of the year. We also successfully secured four new commercial agreements, exemplifying our commitment to strategic growth and expansion. These agreements encompassed two third-party integrators in laboratory environments and multifamily residential, a purchasing program from one of the largest general contractors in the United States, and a manufacturing partnership with a magnesium oxide manufacturer. We also added two standardization programs for key accounts with two major financial institutions. During our previous earnings call, I highlighted some large wins, and we are witnessing the fruition of those projects as they progress into the ordering phase, underscoring the robustness of our pipeline. We continue to see large project wins in our pipeline grow with examples like Armstrong School District, CFG Bank, and Maverick Natural Resources, which will all order and deliver this year. In our relentless pursuit of safety excellence, we remain steadfast in our commitment to achieve our journey to zero recordable incidents and being seen as a world-class leader in safety performance. Notably, our dedication and exceptional safety programs have been recognized by Canadian Occupational Safety as a 2023 Excellence Awardee. The extensive list recognizes dozens of organizations who have demonstrated excellence in their safety programs and a commitment to ensure in which they operate. We are one of 12 companies vying for Canada's safest manufacturing employer. Our year-to-date total recordable incident frequency is 0.6 compared to our year-to-date June 22 frequency of 0.2. The Bureau of Labor and Statistics standard benchmark for dirt's peer manufacturing industry is a TRIF of 5.1. Dirt is 80% below the industry benchmark. We continue to focus on quality improvement as well. During the second quarter, we had 6.62 external defects per million dollars of revenue, a 40% improvement from prior year. Also, our on-time performance during the second quarter was 98%, a major improvement from the 83% on-time performance during the second quarter of last year. We launched a significant update to our proprietary ice technology platform with more than 10 unique functions. More importantly, these improvements were from direct feedback from our construction partners that were of the most value to them as we continue to develop the platform. In conclusion, our unwavering commitment to excellence and innovation has driven sustainable growth and profitability while prioritizing safety, product development, and customer satisfaction. With this foundation, we are poised for greater achievements in the future. And with that, I'll hand it over to Brad to comment on our financials. Brad?

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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