Mr. Benjamin Urban reports

DIRTT CONFIRMS EARLY TERMINATION OF LEASE AGREEMENT FOR FORMER ROCK HILL FACILITY

DIRTT Environmental Solutions Ltd. has entered into an agreement for an early termination of the lease at its former Rock Hill, S.C., manufacturing facility, effective Dec. 30, 2025.

In September, 2025, PDM US, LLC entered into a purchase and sale agreement with the landlord, SP Rock Hill Legacy East #1, LLC, for the facility. In connection with that transaction, DIRTT entered into a lease termination and release agreement with PDM, contingent upon the closing of the purchase and sale agreement. With this agreement finalized, DIRTT has been relieved of all future rent obligations in exchange for a reduced early termination fee of $1.0-million.

DIRTT originally executed a 15-year build-to-suit lease for the Rock Hill facility in 2019. As part of broader operational initiatives, the company permanently closed the facility in September, 2023, shifting capacity to its Calgary manufacturing facilities. As of Nov. 30, 2025, DIRTT's remaining rent obligations under the lease were estimated at approximately $10.5 million on an undiscounted basis. "This action represents an important step in rationalizing DIRTT's real estate footprint and is expected to deliver recurring annual cost savings of $1.6-million beginning in January, 2026," said Benjamin Urban, chief executive officer of DIRTT. "As part of our volume- and margin-focused transformation, we remain committed to revisiting and optimizing all aspects of our business."

As of Sept. 30, 2025, the right-of-use asset related to this lease was $5.9-million and the lease liability was $7.7-million. The company expects to recognize a one-time, non-cash impairment expense related to leasehold improvements of approximately $2.3-million. While this charge is expected to negatively impact reported results in the current period, the lease termination is expected to reduce continuing operating expenses and be accretive to earnings in future periods.

DIRTT operates a multifacility manufacturing footprint across North America, with four specialized facilities in Calgary, producing casework, timber, metal and finishes, and a major production plant in Savannah, Ga.

About DIRTT Environmental Solutions Ltd.

DIRTT is a leader in industrialized construction. DIRTT's system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education and public sector markets, DIRTT's system provides total design freedom, and greater certainty in cost, schedule and outcomes. DIRTT's interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve.

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