The first annual meeting of DIRTT Environmental Solutions since co-founder Mogens Smed was ousted as chief executive had more fireworks than a Canada Day event.
But this was no celebration.
More than 100 people showed up Tuesday at a downtown hotel, and given the number of interruptions, jeers and tough questions asked, it was a meeting few in attendance — including lead director Steve Parry — will soon forget.
Where to start?
Well, the acting CEO didn’t attend; shareholders repeatedly interrupted the meeting’s chairman to grill him on recent corporate changes; and one of the sons of the co-founder said the existing board has “very little understanding” of what the Calgary-based company actually does.
Even the session for shareholders to ask questions was cut short as disgruntled investors pressed for answers.
“That was embarrassing. It’s embarrassing for our shareholders, it’s embarrassing for our company. You know, we’ve always been totally transparent,” Mogens Smed, who remains DIRTT’s executive chair, said after the 42-minute gathering.
“I feel terrible for the shareholders, especially to be told they’re not important.”
To understand the depths of emotion at the meeting, you have to understand what lit the fuse in the first place.
DIRTT, a growing office interior design and manufacturing firm, stunned investors at the beginning of this year by ousting president Scott Jenkins, while pushing the 70-year-old Smed out of the CEO’s role.
The board of directors brought in an interim CEO, Michael Goldstein, and an interim CFO, who was replaced last month.
Smed, a veteran Calgary business leader, has long been the public face of the company and has earned a dedicated following of employees and shareholders.
“I invested in this company, mostly because of the record of Mogens Smed,” one shareholder told the meeting.
DIRTT, which stands for Doing It Right This Time, was created in 2004 by Smed, Barrie Loberg and Geoff Gosling, and went public in 2013. It’s developed 3D software to design and produce customized prefabricated building interiors.
The company’s share price, which ended last year at $6.74, fell 18 per cent to $5.53 on Jan. 2 after the management changes were announced. It’s since rebounded, closing at $6.43 on Tuesday.
At the meeting, one longtime investor called the management shakeup “ill-conceived and poorly executed” and wanted answers.
Parry said the board stands by its decision and wasn’t going to “re-litigate” the issue in public — last January he cited “cracks in the governance process” — but noted Tuesday there was disappointment with the 2017 financial results.
DIRTT saw its revenues climb by 10 per cent, but posted a net loss of $7.4 million last year.
“We see the future as bright and we see the changes made as appropriate,” Parry added.
Oddly, the interim CEO didn’t attend the event, with the lead director saying simply he wasn’t available. A new chief executive should be in place in the second or third quarter, Parry told the audience.
But the no-show of the current chief executive didn’t satisfy Darrin Hopkins, director and co-head of the private client capital markets division at Richardson GMP, whose clients own stock in the company.
“This is the first chance shareholders had … to engage with him, and they don’t have him there? I’ve not seen anything like that before,” Hopkins said later.
Likewise, former company director Keith Allan left the meeting frustrated DIRTT wouldn’t lay out its future plans and direction until a permanent CEO is appointed.
“It was a chance for them to showcase what this company’s vision was,” said Allan. “We got absolutely stonewalled.”
It’s been a tumultuous few months at the company.
Aside from the management upheaval, DIRTT faced a potential proxy battle with U.S.-based fund manager Iron Compass earlier this spring, but later reached a settlement that saw two of its nominees named to DIRTT’s board.
At the annual meeting, the company said its new slate of directors all received around 90 per cent of votes cast.
Speaking after the gathering, Parry said he’s met with almost all of the major shareholders and the board has a “strong mandate” to move ahead, while pointing out many investors inside the room were close friends of the former CEO.
“Those are heartfelt emotions and I think you have to respect people’s right to get up and say what they’re going to say,” he said.
“I am confident what we did is right and I am confident we’re on the right path. So I’ve just got to let this … vent a bit.”
And vent they did.