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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Data Communications Management Corp | TSX:DCM | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.03 | 0.97% | 3.12 | 3.11 | 3.14 | 3.18 | 3.09 | 3.10 | 7,364 | 20:59:59 |
FULL YEAR HIGHLIGHTS
DATA Communications Management Corp. (TSX: DCM; OTCQX: DCMDF) (“DCM” or the "Company"), a leading provider of marketing and business communication solutions to companies across North America, today reported its fiscal 2023 and fourth quarter 2023 financial results.
MANAGEMENT COMMENTARY
“We are pleased to report on the results of our performance in 2023,” said Richard Kellam, President & CEO of DCM. “This was a transformative year for DCM highlighted by the completion of our acquisition of Moore Canada Corporation (“MCC”) and the significant progress we made in our post-merger planning and execution.”
“Our focus throughout the year was to build on the positive momentum we experienced in our business prior to the announcement of the MCC acquisition and to set a clear direction for our entire team beginning on Day 1 of the combined business in late April. We moved quickly to bring our teams together, design our new organization and select key leadership to take us forward, prioritizing our large Commercial and Operations teams. We completed this effort within the first six months of Day 1.”
“We also moved quickly to complete a thorough analysis of our manufacturing footprint and announced a decision in early July to consolidate our plant network from 14 to 10 facilities to drive greater efficiencies in producing and delivering our products and services. We completed the closure of the first of these facilities in Edmonton, Alberta before the end of the year and are on track with our detailed plan to close the remaining three plants and transfer production to other facilities in our network.”
“Our Commercial team delivered solid performance throughout the year, expanding revenue with existing clients, winning new logos, and building a strong new business pipeline focused on the value we can deliver to clients with our combined product and service offerings. We are pleased to report that in a year of significant change, the team delivered organic year over year revenue growth of 2%, which we believe is a great start for this new team.”
1 Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted net income (loss) and Adjusted net income (loss) as a percentage of revenues are non-IFRS measures. For a description of the composition of these non-IFRS measures, and a reconciliation to their most comparable IFRS measure, net income, see the information under the heading “Non-IFRS Measures”, the information set forth on Table 2 and Table 3 herein, and our Management Discussion & Analysis for the year ended December 31, 2023.
FOURTH QUARTER RESULTS
OTHER BUSINESS HIGHLIGHTS
In June 2023 and December 2023 respectively, DCM completed the sale and leaseback of its Oshawa, Ontario warehouse facility and its Fergus, Ontario manufacturing plant, each of which was acquired as part of the Company’s acquisition of MCC. The total gross proceeds from these transactions amounted to $30.5 million. Total net proceeds of $29.5 million were used to repay an acquisition-related credit facility.
On January 11, 2024, DCM completed the sale and leaseback of its Trenton, Ontario warehouse facility, also acquired as part of the Company’s acquisition of MCC. DCM realized gross proceeds on the Trenton sale of $9 million and net proceeds of $8.5 million have been applied towards paying down the Company’s revolving credit facility.
DCM management to date has focused on four key areas of post-merger integration in connection with the MCC acquisition:
DCM continues to expect total annualized synergies from the MCC acquisition of between $30 million to $35 million to be substantially realized over the next 12 months from these operational, organizational and procurement initiatives.
2024 PRIORITIES
DCM has established the following strategic priorities for 2024:
FISCAL 2023 AND FOURTH QUARTER 2023 EARNINGS CALL
The Company will host a conference call and webcast on Wednesday, March 20, 2024, at 9.00 a.m. Eastern time. Mr. Kellam, and James Lorimer, CFO, will present the fiscal 2023 and fourth quarter 2023 results followed by a live Q&A period.
Instructions on how to access both the webcast and telephone call are available below. For those unable to join live, a replay of the webcast will be available on the DCM Investor Relations page.
DCM will be using Microsoft Teams to broadcast our earnings call, which will be accessible via the options below: Click here to join the meeting Meeting ID: 291 583 190 545 Passcode: 9334kz Download Teams | Join on the web
Or call in (audio only) +1 647-749-9154,,120708552# Canada, Toronto Phone Conference ID: 120 708 552#
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Learn More | Meeting options
The Company’s full results will be posted on its Investor Relations page and on www.sedarplus.ca. A video message from Mr. Kellam will also be posted on the Company’s website.
TABLE 1 The following table sets out selected historical consolidated financial information for the periods noted.
For the periods ended December 31, 2023 and 2022
October 1 to December 31, 2023
October 1 to December 31, 2022
January 1 to December 31, 2023
January 1 to December 31, 2022
(in thousands of Canadian dollars, except share and per share amounts, unaudited)
Revenues
$
129,964
$
73,045
$
447,725
$
273,804
Gross profit
32,760
23,554
118,911
84,224
Gross profit, as a percentage of revenues
25.2
%
32.2
%
26.6
%
30.8
%
Selling, general and administrative expenses
25,300
13,636
87,244
54,439
As a percentage of revenues
19.5
%
18.7
%
19.5
%
19.9
%
Adjusted EBITDA
15,012
12,565
53,390
40,965
As a percentage of revenues
11.6
%
17.2
%
11.9
%
15.0
%
Net income for the period
(6,358
)
3,680
(15,854
)
13,966
Adjusted net income
1,362
6,302
12,827
17,388
As a percentage of revenues
1.0
%
8.6
%
2.9
%
6.4
%
Basic earnings per share
$
(0.12
)
$
0.08
$
(0.31
)
$
0.32
Diluted earnings per share
$
(0.12
)
$
0.08
$
(0.31
)
$
0.30
Adjusted net income per share, basic
$
0.02
$
0.14
$
0.25
$
0.39
Adjusted net income per share, diluted
$
0.02
$
0.13
$
0.25
$
0.37
Weighted average number of common shares outstanding, basic
55,022,883
44,062,831
50,832,543
44,062,831
Weighted average number of common shares outstanding, diluted
55,022,883
46,796,407
50,832,543
46,572,066
TABLE 2 The following table provides reconciliations of net income to EBITDA and of net income to Adjusted EBITDA for the periods noted.
EBITDA and Adjusted EBITDA reconciliation
For the periods ended December 31, 2023 and 2022
October 1 to December 31, 2023
October 1 to December 31, 2022
January 1 to December 31, 2023
January 1 to December 31, 2022
(in thousands of Canadian dollars, unaudited)
Net income for the period
$
(6,358
)
$
3,680
$
(15,854
)
$
13,966
Interest expense, net
5,667
1,134
15,321
4,965
Debt modification losses and prepayment fees
—
—
—
—
Amortization of transaction costs
137
87
457
344
Current income tax expense
367
1,653
1,209
5,456
Deferred income tax expense (recovery)
(2,671
)
269
(7,799
)
473
Depreciation of property, plant and equipment
2,058
644
6,165
2,965
Amortization of intangible assets
829
393
2,881
1,606
Depreciation of the ROU Asset
4,665
1,610
12,677
6,609
EBITDA
$
4,694
$
9,470
$
15,057
$
36,384
Acquisition and integration costs
704
1,870
10,903
1,870
Restructuring expenses
10,570
—
20,308
—
Net fair value (gains) losses on financial liabilities at fair value through profit or loss
(956
)
1,225
7,122
2,711
Adjusted EBITDA
$
15,012
$
12,565
$
53,390
$
40,965
TABLE 3 The following table provides reconciliations of net income (loss) to Adjusted net income (loss) and a presentation of Adjusted net income per share for the periods noted.
Adjusted net income reconciliation
For the periods ended December 31, 2023 and 2022
October 1 to December 31, 2023
October 1 to December 31, 2022
January 1 to December 31, 2023
January 1 to December 31, 2022
(in thousands of Canadian dollars, except share and per share amounts, unaudited)
Net income (loss) for the period
$
(6,358
)
$
3,680
$
(15,854
)
$
13,966
Acquisition and integration costs
704
1,870
10,903
1,870
Restructuring expenses
10,570
—
20,308
—
Net fair value (gains) losses on financial liabilities at fair value through profit or loss
(956
)
1,225
7,122
2,711
Tax effect of the above adjustments
(2,598
)
(473
)
(9,652
)
(1,159
)
Adjusted net income (loss)
$
1,362
$
6,302
$
12,827
$
17,388
Adjusted net income per share, basic
$
0.02
$
0.14
$
0.25
$
0.39
Adjusted net income per share, diluted
$
0.02
$
0.13
$
0.25
$
0.37
Weighted average number of common shares outstanding, basic
55,022,883
44,062,831
50,832,543
44,062,831
Weighted average number of common shares outstanding, diluted
55,022,883
46,796,407
50,832,543
46,572,066
About DATA Communications Management Corp.
DCM is a marketing and business communications partner that helps companies simplify the complex ways they communicate and operate, so they can accomplish more with fewer steps and less effort. For over 60 years, DCM has been serving major brands in vertical markets, including financial services, retail, healthcare, energy, other regulated industries, and the public sector. We integrate seamlessly into our clients’ businesses thanks to our deep understanding of their needs, our technology-enabled solutions, and our end-to-end service offering. Whether we are running technology platforms, sending marketing messages, or managing print workflows, our goal is to make everything surprisingly simple.
Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on SEDAR+ at www.sedarplus.ca.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DCM, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as “may”, “would”, “could”, “will”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan”, and other similar expressions are intended to identify forward-looking statements. These statements reflect DCM’s current views regarding future events and operating performance, are based on information currently available to DCM, and speak only as of the date of this press release.
These forward-looking statements involve a number of risks, uncertainties, and assumptions. They should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DCM to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements. We caution readers of this press release not to place undue reliance on our forward-looking statements since a number of factors could cause actual future results, conditions, actions, or events to differ materially from the targets, expectations, estimates or intentions expressed in these forward-looking statements.
The principal factors, assumptions and risks that DCM made or took into account in the preparation of these forward-looking statements and which could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are described in further detail in our Management Discussion and Analysis for the year ended December 31, 2023, and include but are not limited to the following:
Additional factors are discussed elsewhere in this press release and under the headings "Liquidity and capital resources" and “Risks and Uncertainties” in DCM’s Management Discussion and Analysis and in DCM’s other publicly available disclosure documents, as filed by DCM on SEDAR+ (www.sedarplus.ca). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, DCM does not intend and does not assume any obligation to update these forward-looking statements.
NON-IFRS ACCOUNTING STANDARDS MEASURES
NON-IFRS ACCOUNTING STANDARDS AND OTHER FINANCIAL MEASURES
This press release includes certain non-IFRS Accounting Standards measures, ratios and other financial measures as supplementary information. This supplementary information does not represent earnings measures recognized by IFRS Accounting Standards and does not have any standardized meanings prescribed by IFRS Accounting Standards. Therefore, these non-IFRS Accounting Standards measures, ratios and other financial measures are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that this supplementary information should not be construed as alternatives to net income (loss) determined in accordance with IFRS Accounting Standards as an indicator of DCM’s performance. Definitions of such supplementary information, together with a reconciliation of net income (loss) to such supplementary financial measures, can be found in Table 4 and Table 5 of our Management Discussion and Analysis for the fiscal year ended December 31, 2023 and filed on SEDAR+ at www.sedarplus.ca.
Consolidated statements of financial position
(in thousands of Canadian dollars, unaudited)
December 31, 2023
December 31, 2022
$
$
Assets
Current assets
Cash and cash equivalents
$
17,652
$
4,208
Trade receivables
117,956
54,630
Inventories
28,840
20,220
Prepaid expenses and other current assets
5,313
2,984
Income taxes receivable
2,640
15
Assets held for sale
8,650
—
181,051
82,057
Non-current assets
Other non-current assets
2,900
466
Deferred income tax assets
9,801
4,830
Property, plant and equipment
30,358
6,779
Right-of-use assets
159,801
33,505
Pension assets
1,962
2,364
Intangible assets
10,616
2,507
Goodwill
22,265
16,973
$
418,754
$
149,481
Liabilities
Current liabilities
Bank overdraft
1,564
—
Trade payables and accrued liabilities
$
75,766
$
44,133
Current portion of credit facilities
6,333
11,667
Current portion of lease liabilities
10,322
6,791
Provisions
16,325
1,316
Income taxes payable
—
1,630
Deferred revenue
6,221
3,942
116,531
69,479
Non-current liabilities
Provisions
1,004
—
Credit facilities
93,918
15,380
Lease liabilities
144,993
33,011
Pension obligations
26,386
6,069
Other post-employment benefit plans
3,606
2,695
Asset retirement obligation
3,552
—
$
389,990
$
126,634
Equity
Shareholders’ equity
Shares
$
283,738
$
256,478
Warrants
219
869
Contributed surplus
3,135
3,131
Translation Reserve
177
207
Deficit
(258,505
)
(237,838
)
$
28,764
$
22,847
$
418,754
$
149,481
Consolidated statements of operations
(in thousands of Canadian dollars, except per share amounts, unaudited)
For the three months ended December 31, 2023
For the three months ended December 31, 2022
$
$
Revenues
$
129,964
$
73,045
Cost of revenues
97,204
49,491
Gross profit
32,760
23,554
Expenses
Selling, commissions and expenses
11,014
6,501
General and administration expenses
14,286
7,135
Restructuring expenses
10,570
—
Acquisition costs
704
1,870
Net fair value (gains) losses on financial liabilities at fair value through profit or loss
(956
)
1,225
35,618
16,731
(Loss) income before finance costs, other income and income taxes
(2,858
)
6,823
Finance costs
Interest expense on long term debt and pensions, net
2,742
1,134
Interest expense on lease liabilities
2,925
—
Amortization of transaction costs
137
87
5,804
1,221
(Loss) income before income taxes
(8,662
)
5,602
Income tax expense
Current
367
1,653
Deferred
(2,671
)
269
(2,304
)
1,922
Net (loss) Income for the period
$
(6,358
)
$
3,680
Consolidated statements of operations
(in thousands of Canadian dollars, except per share amounts, unaudited)
For the year ended December 31, 2023
For the year ended December 31, 2022
$
$
Revenues
$
447,725
$
273,804
Cost of revenues
328,814
189,580
Gross profit
118,911
84,224
Expenses
Selling, commissions and expenses
39,195
29,041
General and administration expenses
48,049
25,398
Restructuring expenses
20,308
—
Acquisition and integration costs
10,903
1,870
Net fair value (gains) losses on financial liabilities at fair value through profit or loss
7,122
2,711
125,577
59,020
(Loss) income before finance costs, other income and income taxes
(6,666
)
25,204
Finance costs
Interest expense on long term debt and pensions, net
8,315
2,742
Interest expense on lease liabilities
7,006
2,223
Amortization of transaction costs net of debt extinguishment gain
457
344
15,778
5,309
(Loss) Income before income taxes
(22,444
)
19,895
Income tax expense
Current
1,209
5,456
Deferred
(7,799
)
473
(6,590
)
5,929
Net (loss) income for the period
$
(15,854
)
$
13,966
Other comprehensive income:
Items that may be reclassified subsequently to net income
Foreign currency translation
(30
)
34
(30
)
34
Items that will not be reclassified to net income
Re-measurements of pension and other post-employment benefit obligations
(6,525
)
640
Taxes related to pension and other post-employment benefit adjustment above
1,712
(162
)
(4,813
)
478
Other comprehensive (loss) income for the period, net of tax
$
(4,843
)
$
512
Comprehensive (loss) income for the period
$
(20,697
)
$
14,478
Basic (loss) earnings per share
$
(0.31
)
$
0.32
Diluted (loss) earnings per share
$
(0.31
)
$
0.30
Consolidated statements of cash flows
(in thousands of Canadian dollars, unaudited)
For the year ended December 31, 2023
For the year ended December 31, 2022
$
$
Cash provided by (used in)
Operating activities
Net (loss) income for the year
$
(15,854
)
$
13,966
Items not affecting cash
Depreciation of property, plant and equipment
6,165
2,965
Amortization of intangible assets
2,881
1,606
Depreciation of right-of-use-assets
12,677
6,609
Interest expense on lease liabilities
7,006
2,223
Share-based compensation expense
675
328
Net fair value losses on financial liabilities at fair value through profit or loss
7,122
2,711
Pension expense
1,245
351
(Gain)/ loss on disposal of property, plant and equipment
487
98
Provisions
20,308
—
Amortization of transaction costs, accretion of debt premium/ discount, net of debt extinguishment gain
457
344
Accretion of non-current liabilities
—
120
Accretion of asset retirement obligation
24
—
Other post-employment benefit plans expense
515
(16
)
Right-of-use assets impairment
464
—
Income tax (recovery) expense
(6,590
)
5,929
Changes in non cash working capital
5,863
(3,632
)
Contributions made to pension plans
(1,124
)
(869
)
Contributions made to other post-employment benefit plans
(471
)
(365
)
Provisions paid
(4,975
)
(3,160
)
Income taxes paid
(4,072
)
(3,822
)
32,803
25,386
Investing activities
Net cash consideration for acquisition of MCC
(130,953
)
—
Purchase of property, plant and equipment
(4,222
)
(1,475
)
Proceeds on sale and leaseback transactions
29,533
—
Purchase of intangible assets
(127
)
(71
)
Proceeds on disposal of property, plant and equipment
1,282
70
(104,487
)
(1,476
)
Financing activities
Issuance of common shares and warrants, net
24,221
—
Decrease in restricted cash
—
515
Proceeds from credit facilities
162,140
2,900
Repayment of credit facilities
(87,592
)
(12,616
)
Proceeds from exercise of warrants
489
—
Increase in bank overdrafts
282
—
Proceeds from exercise of options
751
—
Transaction costs
(1,801
)
—
Lease payments
(13,321
)
(8,730
)
85,169
(17,931
)
Change in cash and cash equivalents during the period
13,485
5,979
Cash and cash equivalents – beginning of period
$
4,208
$
901
Effects of foreign exchange on cash balances
(41
)
39
Cash and cash equivalents – end of period
$
17,652
$
6,919
View source version on businesswire.com: https://www.businesswire.com/news/home/20240319990323/en/
Mr. Richard Kellam President and Chief Executive Officer DATA Communications Management Corp. Tel: (905) 791-3151 Mr. James E. Lorimer Chief Financial Officer DATA Communications Management Corp. Tel: (905) 791-3151 ir@datacm.com
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