Shares in Calgary office manufacturer tumble after sudden CEO replacement

CALGARY — Shares in Calgary-based DIRTT Environmental Solutions Ltd. (TSX:DRT) plummeted nearly 18 per cent on Tuesday after it made the surprise announcement its board was replacing its 70-year-old founder as CEO.

A morning company press release presented the changes as part of succession planning with Mogens Smed staying on as executive chairman — but on a conference call, Smed said he wasn’t part of the decision.

“I just found out about this on Friday,” he said in response to a financial analyst’s question.

“I’ve got absolutely no job description or anything yet so I haven’t really got a clue what it is that I’ll be doing, to be clear, OK? Hopefully that will get settled in the next couple of weeks.”

Stock in the office interior design and manufacturing company (TSX:DRT) closed at $5.53, down $1.21 or 17.95 per cent on Tuesday.

In its news release, DIRTT said Smed will focus on its network of sales partners, as well as key business development initiatives, reporting to the CEO. Smed said he “ain’t going away,” and will take on any task assigned by the board.

Lead director Steve Parry, whose title was previously chairman, wouldn’t be specific on the call about what led to the appointment of Michael Goldstein as interim CEO but stated it was not related to any financial reporting issues.

“We started to see some of what I would call cracks in the governance process in the company,” he said.

“This is a very proactive board and a good proactive board when it sees issues, rather than waiting for something that costs the shareholders, starts to act to put in place a process to make sure no loss does occur.”

He said the decision to replace Smed was made based on an internal board assessment of DIRTT’s capabilities, earning power, growth opportunities, governance and shareholder returns.

DIRTT also announced the appointment of Peter Henry as interim chief financial officer, replacing president and interim CFO Scott Jenkins.

In a later interview, Parry insisted the board is not trying to get rid of Smed. He said Smed was aware the changes were coming and knows what his new job is, suggesting his comment on the call was an “off the cuff remark.”

He added negative market reaction was unfortunate but he’s hopeful investors will eventually “absorb the information and … understand its positive implications.”

In a research note, Laurentian Bank analyst Elizabeth Johnston said the “abrupt changes to management and near-term uncertainty” are negative for the company.

Smed sold SMED International Inc., a manufacturer of customizable prefabricated building interiors, to Haworth, Inc. in 2000 for $250 million.

He co-founded DIRTT, a manufacturer of customizable prefabricated building interiors, in 2004. The name stands for Doing It Right This Time.

Follow ↕HealingSlowly on Twitter.

Just Posted

People hurt in rollover near Red Deer

Occupants of a vehicle that rolled south of Hwy 11A were airlifted… Continue reading

Eager-beaver cannabis entrepreneurs already waiting outside Red Deer City Hall

Appications will be accepted on a first-come basis starting on Tuesday

Like father like son: Red Deer area Dreeshen family dedicates life to public service

There are three jobs that could be considered the Dreeshen family business:… Continue reading

Restaurant owner concerned about Gasoline Alley road changes

Nearly 20 trucks were lined up on the service road in front… Continue reading

Preliminary hearings set for two men charged in weapons and drugs bust

A Red Deer man and Sylvan Lake man are facing 80 charges

WATCH: Hypnotizing show at Westerner Days

Hynotist and mentalist Joshua Seth performs three times a day at Westerner Days

WWII hero’s lost Purple Heart returned to his family

NEW YORK — A lost Purple Heart medal has been returned to… Continue reading

California girl, 2, accidentally shot and killed by boy, 4

SAN BERNARDINO, Calif. — Authorities say a 4-year-old boy accidentally shot and… Continue reading

A hairy issue: Sailors tell the US Navy, ‘We want beards’

PROVIDENCE, R.I. — Now that women in the Navy can wear ponytails,… Continue reading

PHOTOS: River Town Saints rock Red Deer

River Town Saints play Westerner Days Friday in Red Deer

PHOTOS: Dogs, horses and more animals at Westerner Days

Westerner Park’s pavilions were filled with animals during Westerner Days

Red Deer residents can’t get enough mini-doughnuts

Mini-doughnuts were the biggest draw to Westerner Days according to a Red… Continue reading

Four-car crash, including RCMP vehicle, on Highway 2

Two sheriff vehicles were also involved in the collision

Divers hunt for 4 after Missouri duck boat sinks, killing 13

BRANSON, Mo. — Divers are searching Friday for four people still missing… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month