DIRTT Confirms Early Termination of Lease Agreement for Former Rock Hill Facility

Core Viewpoint - DIRTT Environmental Solutions Ltd. has announced the early termination of its lease at the former Rock Hill manufacturing facility, effective December 30, 2025, which is expected to lead to significant cost savings and operational optimization [1][2][3]. Group 1: Lease Termination Details - DIRTT entered into a Lease Termination and Release Agreement with PDM US, LLC, relieving the company of future rent obligations in exchange for a reduced early termination fee of $1.0 million [2]. - The original lease for the Rock Hill facility was a 15-year build-to-suit agreement executed in 2019, but the facility was permanently closed in September 2023 [3]. - As of November 30, 2025, DIRTT's remaining rent obligations under the lease were estimated at approximately $10.5 million on an undiscounted basis [3]. Group 2: Financial Implications - The lease termination is expected to deliver recurring annual cost savings of $1.6 million starting in January 2026 [3]. - The company anticipates recognizing a one-time, non-cash impairment expense related to leasehold improvements of approximately $2.3 million, which will negatively impact reported results in the current period [3]. - The right-of-use asset related to this lease was valued at $5.9 million, while the lease liability was $7.7 million as of September 30, 2025 [3]. Group 3: Operational Strategy - The lease termination is part of DIRTT's broader operational initiatives aimed at rationalizing its real estate footprint and optimizing business operations [3]. - DIRTT operates a multi-facility manufacturing footprint across North America, with specialized facilities in Calgary, Alberta, and a major production plant in Savannah, Georgia [4].