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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 0.32% | 3.11 | 3.11 | 3.19 | 3.18 | 3.09 | 3.12 | 3,866 | 21:00:40 |
DATA Communications Management Corp. (TSX: DCM) (“DCM” or the "Company"), a leading provider of marketing and business communication solutions to companies across North America, announces its consolidated financial results for the year ended December 31, 2021.
FISCAL 2021 AND FOURTH QUARTER 2021 HIGHLIGHTS
Adjusted EBITDA in the second half of 2021 would be $16.4 million, up 33.9% from $12.3 million in the first half of 2021. Further adjusting for RSU and DSU mark-to-market expenses would result in adjusted EBITDA of $34.3 million in 2021, compared to $32.7 million in 2020.
2021 OPERATIONAL HIGHLIGHTS – BUILDING A BETTER BUSINESS
MANAGEMENT COMMENTARY
"We are very pleased with the progress we made in 2021. Since I joined DCM on March 8, 2021, we’ve implemented a clear strategy to move from a “print first” company to a “digital first” company with a clear five-year strategic plan to drive our execution," said Richard Kellam, CEO and President of DCM. "We believe we are very well positioned for growth, given our clarity of strategy, our positioning in the marketplace, the strength of our team, and importantly the positive results we delivered in the second half of 2021, and specifically the fourth quarter. In my 36 years in business, I’ve always found that momentum builds momentum. We are very excited about the future of DCM."
FISCAL 2021 AND FOURTH QUARTER EARNINGS CALL
The Company will host a conference call and webcast to review Fiscal 2021 and Q4 2021 results on Friday, March 25, 2022 at 9.00 a.m. Eastern time. DCM will be using Microsoft Teams to broadcast the call, which will be accessible via the options below:
Join on your computer or mobile app Click here to join the meeting Or call in (audio only)
+1 647-749-9154,,242779691# Canada, Toronto Phone Conference ID: 242 779 691#
The Company’s full results will be posted on its Investor Relations page and on www.sedar.com. A video message from Richard Kellam, DCM’s President and CEO will 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, 2021 and 2020
October 1 to December 31, 2021
October 1 to December 31, 2020
January 1 to December 31, 2021
January 1 to December 31, 2020
(in thousands of Canadian dollars, except share and per share amounts, unaudited)
(Restated)
(Restated)
Revenues
$
60,871
$
60,589
$
235,331
$
259,314
Gross profit
17,713
15,008
69,535
72,942
Gross profit, as a percentage of revenues
29.1
%
24.8
%
29.5
%
28.1
%
Selling, general and administrative expenses (1)
15,431
12,375
55,957
56,481
As a percentage of revenues
25.4
%
20.4
%
23.8
%
21.8
%
Adjusted EBITDA
7,270
7,387
33,286
41,476
As a percentage of revenues
11.9
%
12.2
%
14.1
%
16.0
%
Net income for the period/year
(1,857
)
3,374
1,565
13,299
Adjusted net income
(200
)
3,946
7,684
15,766
As a percentage of revenues
(0.3
) %
6.5
%
3.3
%
6.1
%
Basic (loss) earnings per share
$
(0.04
)
$
0.08
$
0.04
$
0.31
Diluted (loss) earnings per share
$
(0.04
)
$
0.08
$
0.03
$
0.31
Adjusted net income per share, basic and diluted
$
0.00
$
0.08
$
0.17
$
0.37
Adjusted net income (loss) per share, diluted
$
0.00
$
0.08
$
0.17
$
0.36
Weighted average number of common shares outstanding, basic
44,062,831
43,442,668
43,993,494
43,146,866
Weighted average number of common shares outstanding, diluted
46,439,445
44,258,933
46,136,507
43,316,630
(1) SG&A and deferred income tax expense include the impact of the IFRS Interpretations Committee’s agenda decision regarding configuration or customization costs in a cloud computing arrangement. Prior periods have been retrospectively restated to derecognize previously capitalized costs in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Refer to note 3 of the consolidated financial statements for the year ended December 31, 2021 for further details on the impact of the amended accounting standard.
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, 2021 and 2020
October 1 to December 31, 2021
October 1 to December 31, 2020
January 1 to December 31, 2021
January 1 to December 31, 2020
(in thousands of Canadian dollars, unaudited)
(Restated)
(Restated)
Net (loss) income for the period/year (1)
$
(1,857
)
$
3,374
$
1,565
$
13,299
Interest expense, net
1,124
260
5,839
6,076
Debt modification losses and prepayment fees
473
78
473
703
Amortization of transaction costs
503
146
941
553
Current income tax expense (recovery)
183
(754
)
2,238
(491
)
Deferred income tax (recovery) expense (1)
(371
)
561
(1,159
)
4,208
Depreciation of property, plant and equipment
731
762
3,133
3,541
Amortization of intangible assets (1)
2,282
522
3,589
1,876
Depreciation of the ROU Asset
1,920
1,674
8,428
8,399
EBITDA
$
4,988
$
6,623
$
25,047
$
38,164
Restructuring expenses
2,282
748
9,691
2,821
Other income
—
—
(1,452
)
—
One-time business reorganization costs (2)
—
16
—
491
Adjusted EBITDA
$
7,270
$
7,387
$
33,286
$
41,476
(1) SG&A and deferred income tax expense include the impact of the IFRS Interpretations Committee’s agenda decision regarding configuration or customization costs in a cloud computing arrangement. Prior periods have been retrospectively restated to derecognize previously capitalized costs in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Refer to note 3 of the consolidated financial statements for the year ended December 31, 2021 for further details on the impact of the amended accounting standard.
(2) One-time business reorganization costs include non-recurring headcount reduction expenses for employees that did not qualify as restructuring costs.
TABLE 3 The following table provides reconciliations of net (loss) income to Adjusted net (loss) income and a presentation of Adjusted net (loss) income per share for the periods noted.
Adjusted net (loss) income reconciliation
For the periods ended December 31, 2021 and 2020
October 1 to December 31, 2021
October 1 to December 31, 2020
January 1 to December 31, 2021
January 1 to December 31, 2020
(in thousands of Canadian dollars, except share and per share amounts, unaudited)
(Restated)
(Restated)
Net (loss) income for the period/year (1)
(1,857
)
$
3,374
1,565
13,299
Restructuring expenses
2,282
748
9,691
2,821
One-time business reorganization costs (2)
—
16
—
491
Other income
—
—
(1,452
)
—
Tax effect of the above adjustments
(625
)
(192
)
(2,120
)
(845
)
Adjusted net income
(200
)
3,946
7,684
15,766
Adjusted net income per share, basic
-0.00
0.08
0.17
0.37
Adjusted net income per share, diluted
-0.00
0.08
0.17
0.36
Weighted average number of common shares outstanding, basic
44,062,831
43,442,668
43,993,494
43,146,866
Weighted average number of common shares outstanding, diluted
46,439,445
44,258,933
46,136,507
43,316,630
Number of common shares outstanding, basic
44,062,831
43,867,030
44,062,831
43,867,030
Number of common shares outstanding, diluted
46,439,445
44,683,295
46,205,844
44,036,795
(1) SG&A and deferred income tax expense include the impact of the IFRS Interpretations Committee’s agenda decision regarding configuration or customization costs in a cloud computing arrangement. Prior periods have been retrospectively restated to derecognize previously capitalized costs in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Refer to note 3 of the consolidated financial statements for the year ended December 31, 2021 for further details on the impact of the amended accounting standard.
(2) One-time business reorganization costs include non-recurring headcount reduction expenses for employees that did not qualify as restructuring costs.
About DATA Communications Management Corp.
DCM is a leading provider of marketing and workflow solutions that solve the complex branding, communications, logistics and regulatory challenges of some of North America’s biggest brands. Powered by purpose-built technology like our DCMFlex™ workflow management platform and our ASMBL digital asset management solution, we help clients bring their brands to life and create more meaningful connections with customers. We serve market leaders in key verticals such as financial services, retail, healthcare, energy, and the public sector, supporting them with marketing scale, speed, efficiency and insight that drives their competitiveness and improves their performance.
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 the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
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 and 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. The principal factors, assumptions and risks that DCM made or took into account in the preparation of these forward-looking statements include: risks relating to the continuing impact of the COVID-19 pandemic, the impact of which could be material on DCM’s business, liquidity and results of operations; increases in the costs of freight, paper, ink, and other raw material inputs used by DCM in the conduct of its business; supply chain disruptions which may limit the availability of raw materials and impact our production and revenues; the Company's ability to continue as a going concern is dependent upon management’s ability to meet forecast revenue and profitability targets for at least the next twelve months in order to comply with its financial covenants on its credit facilities or to obtain financial covenant waivers from its lenders if necessary; risks relating to DCM’s ability to access sufficient capital to fund its liquidity and business plans, including, without limitation, under its existing revolving credit facility, on favourable terms or at all; the risk that DCM will not be successful in negotiating amendments to the terms of its existing credit facilities including, without limitation, the financial covenants of DCM under these facilities; the limited growth in the traditional printing industry and the potential for further declines in sales of DCM’s printed business documents relative to historical sales levels for those products; the risk that changes in the mix of products and services sold by DCM will adversely affect DCM’s financial results; the risk that DCM may not be successful in reducing the size of its legacy print business, realizing the benefits expected from restructuring and business reorganization initiatives, reducing costs, reducing and repaying its long term debt, and growing its digital and marketing communications businesses; the risk that DCM may not be successful in managing its organic growth; DCM’s ability to invest in, develop and successfully market new digital and other products and services; competition from competitors supplying similar products and services, some of whom have greater economic resources than DCM and are well-established suppliers; DCM’s ability to grow its sales or even maintain historical levels of its sales of printed business documents; the impact of economic conditions on DCM’s businesses; risks associated with acquisitions and/or investments in joint ventures by DCM; the failure to realize the expected benefits from the acquisitions it has made and risks associated with the integration and growth of such businesses; DCM’s ability to maintain and grow relationships with its customers and suppliers; litigation risks; and risks related to a disruption of operations from adverse labour relations, higher labour costs, or both. 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’s discussion and analysis and in DCM’s other publicly available disclosure documents, as filed by DCM on SEDAR (www.sedar.com). 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 MEASURES
This press release includes certain non-IFRS measures as supplementary information. Except as otherwise noted, when used in this press release, EBITDA means earnings before interest and finance costs, taxes, depreciation and amortization and Adjusted EBITDA means EBITDA adjusted for restructuring expenses, and one-time business reorganization costs. Adjusted net income (loss) means net income (loss) adjusted for restructuring expenses, one-time business reorganization costs, and the tax effects of those items. Adjusted net income (loss) per share (basic and diluted) is calculated by dividing Adjusted net income (loss) for the period by the weighted average number of common shares of DCM (basic and diluted) outstanding during the period. Adjusted EBITDA as a percentage of revenues means revenues divided by Adjusted EBITDA and Adjusted net income (loss) as a percentage of revenues means revenues divided by adjusted net income (loss), in each case for the same period. In addition to net income (loss), DCM uses non-IFRS measures and ratios, including Adjusted net income (loss), Adjusted net income (loss) per share, Adjusted net income (loss) as a percentage of revenues, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues to provide investors with supplemental measures of DCM’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. DCM also believes that securities analysts, investors, rating agencies and other interested parties frequently use non-IFRS measures in the evaluation of issuers. DCM’s management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess its ability to meet future debt service, capital expenditure and working capital requirements. Adjusted net income (loss), Adjusted net income (loss) per share, EBITDA and Adjusted EBITDA are not earnings measures recognized by IFRS and do not have any standardized meanings prescribed by IFRS. Therefore, Adjusted net income (loss), Adjusted net income (loss) per share, EBITDA and Adjusted EBITDA are unlikely to be comparable to similar measures presented by other issuers.
Investors are cautioned that Adjusted net income (loss), Adjusted net income (loss) per share, EBITDA and Adjusted EBITDA should not be construed as alternatives to net income (loss) determined in accordance with IFRS as an indicator of DCM’s performance. For a reconciliation of net income (loss) to EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA, see Table 3 in the most recent Management's Discussion & Analysis filed on www.sedar.com. For a reconciliation of net income (loss) to Adjusted net income (loss) and a presentation of Adjusted net income (loss) per share, see Table 4 in the Company's most recent Management's Discussion & Analysis filed on www.sedar.com.
Consolidated statements of financial position
(in thousands of Canadian dollars, unaudited)
December 31, 2021
December 31, 2020
$
$
(Restated)
Assets
Current assets
Cash and cash equivalents
901
578
Trade receivables
51,567
65,290
Inventories
12,133
8,514
Prepaid expenses and other current assets
2,580
1,521
Income taxes receivable
860
—
68,041
75,903
Non-current assets
Other non-current assets
625
581
Deferred income tax assets
5,465
5,236
Restricted cash
515
515
Property, plant and equipment
8,416
9,783
Right-of-use assets
33,476
42,341
Pension assets
2,531
203
Intangible assets
4,042
6,241
Goodwill
16,973
16,973
140,084
157,776
Liabilities
Current liabilities
Trade payables and accrued liabilities
37,589
39,999
Current portion of credit facilities
11,743
6,172
Current portion of promissory notes
—
1,154
Current portion of lease liabilities
6,123
8,032
Provisions
3,280
1,186
Income taxes payable
841
1,608
Deferred revenue
3,269
2,798
62,845
60,949
Non-current liabilities
Provisions
1,196
90
Credit facilities
24,556
39,567
Promissory notes
—
975
Lease liabilities
32,976
40,321
Deferred income tax liabilities
—
282
Pension obligations
7,499
8,271
Other post-employment benefit plans
2,971
3,507
132,043
153,962
Equity
Shareholders’ equity / (Deficiency)
Shares
256,478
256,260
Warrants
881
850
Contributed surplus
2,791
2,354
Translation reserve
173
192
Deficit
(252,282
)
(255,842
)
8,041
3,814
140,084
157,776
Consolidated statements of operations
(in thousands of Canadian dollars, except per share amounts, unaudited)
For the three months ended December 31, 2021
For the three months ended December 31, 2020
$
$
(Restated)
Revenues
60,871
60,589
Cost of revenues
43,158
45,581
Gross profit
17,713
15,008
Expenses
Selling, commissions and expenses
6,569
5,385
General and administration expenses
8,862
6,990
Restructuring expenses
2,282
748
17,713
13,123
Income before finance costs, other income and income taxes
—
1,885
Finance costs
Interest expense, net
1,124
260
Debt modification losses and prepayment fees
473
78
Amortization of transaction costs
503
146
2,100
484
Other income
Government grant income
55
1,780
(Loss) income before income taxes
(2,045
)
3,181
Income tax expense
Current
183
(754
)
Deferred
(371
)
561
(188
)
(193
)
Net (loss) Income for the year
(1,857
)
3,374
Basic (loss) earnings per share
(0.04
)
0.08
Diluted (loss) earnings per share
(0.04
)
0.08
Consolidated statements of operations
(in thousands of Canadian dollars, except per share amounts, unaudited)
For the year ended December 31, 2021
For the year ended December 31, 2020
$
$
(Restated)
Revenues
235,331
259,314
Cost of revenues
165,796
186,372
Gross profit
69,535
72,942
Expenses
Selling, commissions and expenses
24,888
26,424
General and administration expenses
31,069
30,057
Restructuring expenses
9,691
2,821
65,648
59,302
Income before finance costs, other income and income taxes
3,887
13,640
Finance costs
Interest expense on long term debt and pensions, net
3,318
2,819
Interest expense on lease liabilities
2,521
3,257
Debt modification losses and prepayment fees
473
703
Amortization of transaction costs
941
553
7,253
7,332
Other income
Government grant income
4,558
10,708
Other income
1,452
—
Income before income taxes
2,644
17,016
Income tax expense
Current
2,238
(491
)
Deferred
(1,159
)
4,208
1,079
3,717
Net income for the year
1,565
13,299
Other comprehensive income:
Items that may be reclassified subsequently to net income
Foreign currency translation
(19
)
(62
)
(19
)
(62
)
Items that will not be reclassified to net income
Re-measurements of pension and other post-employment benefit obligations
2,643
(949
)
Taxes related to pension and other post-employment benefit adjustment above
(648
)
239
1,995
(710
)
Other comprehensive income (loss) for the year, net of tax
1,976
(772
)
Comprehensive income for the year
3,541
12,527
Basic earnings per share
0.04
0.31
Diluted earnings per share
0.03
0.31
Consolidated statements of cash flows
(in thousands of Canadian dollars, unaudited)
For the year ended December 31, 2021
For the year ended December 31, 2020
$
$
(Restated)
Cash provided by (used in)
Operating activities
Net income for the year
1,565
13,299
Items not affecting cash
Depreciation of property, plant and equipment
3,133
3,541
Amortization of intangible assets
3,589
1,876
Depreciation of right-of-use-assets
8,428
8,399
Interest expense on lease liabilities
2,521
3,257
Share-based compensation expense
488
54
Shares issued as payment for services
40
—
Pension expense
480
487
Loss on disposal of property, plant & equipment
66
—
(Gain) disposal of property, plant, and equipment
(196)
—
Provisions
9,691
2,821
Amortization of transaction costs and debt modification losses
1,201
1,256
Accretion of non-current liabilities and capitalized interest expense
(441)
(972)
Other post-employment benefit plans expense (gain)
(118)
852
Income tax expense (note 14)
1,079
3,717
31,526
38,587
Changes in working capital
7,135
15,944
Contributions made to pension plans
(970)
(1,116)
Contributions made to other post-employment benefit plans
(390)
(338)
Provisions paid
(6,491)
(5,623)
Income taxes paid (note 14)
(3,865)
181
26,945
47,635
Investing activities
Purchase of property, plant and equipment
(1,832)
(268)
Purchase of intangible assets
(1,390)
(571)
Proceeds on disposal of property, plant and equipment
—
4
(3,222)
(835)
Financing activities
Issuance of common shares and warrants, net
—
173
Proceeds from credit facilities
21,000
—
Repayment of credit facilities
(30,696)
(32,865)
Exercise of warrants
118
—
Repayment of other liabilities
—
(333)
Repayment of promissory notes
(2,144)
(533)
Transaction costs
(489)
(227)
Lease payments
(11,202)
(11,336)
(23,413)
(45,121)
Change in Cash during the year
310
1,679
Cash and cash equivalents (bank overdraft) – beginning of year
578
(1,093)
Effects of foreign exchange on cash balances
13
(8)
Cash and cash equivalents – end of year
901
578
View source version on businesswire.com: https://www.businesswire.com/news/home/20220324005919/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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