Brampton, Ontario – March 21, 2023 – DATA Communications Management Corp. (TSX: DCM; OTCQX: DCMDF) (“DCM” or the “Company”), a provider of marketing and business communication solutions to companies across North America, is pleased to report continued momentum in the fourth quarter of 2022 with revenue up +20.0%, gross profit up +33.0%, and EBITDA up +89.9%, compared to the fourth quarter of 2021, respectively. For the year ended December 31, 2022, revenue is up +16.3%, gross profit is up +21.1%, net income is up +792.4%, and EBITDA is up +45.3%, compared to 2021, respectively. Revenue growth has been driven by a combination of expansion revenue with existing clients, and new business wins. Gross margin growth exceeded revenue growth, reflecting the Company’s commitment to operational success and driving higher levels of net income.
FISCAL 2022 AND FOURTH QUARTER 2022 HIGHLIGHTS – BUILDING A BIGGER BUSINESS
- Revenue for fiscal 2022 was up +16.3%, or +$38.5 million, vs. 2021 (YA), for total revenues of $273.8 million;
- Gross profit accelerated +21.1%, or +$14.7 million, vs. YA to $84.2 million;
- Gross profit as a percentage of revenues grew +1.3 percentage points to 30.8%, vs. 29.5% YA;
- Net income was up +792.4%, or +$12.4 million, vs. YA to $14.0 million;
- EBITDA grew +45.3%, or +$11.3 million, vs. YA to $36.4 million;
- No restructuring expenses or any other “adjustments” or one-time costs, other than one-time add backs of $1.9 million in Q4 for costs related to the planned acquisition of RRD Canada;
- Total debt lower by 26%, or -$9.7 million, vs. year end 2021 to $27.3 million;
- Basic and diluted EPS of $0.32 and $0.30, respectively, compared with $0.04 and $0.03, respectively, in fiscal 2021;
- Revenue for the fourth quarter of 2022 was up +20.0%, or +$12.2 million, vs. Q4 2021, for total revenues of $73.0 million;
- Gross profit accelerated +33.0%, or +$5.8 million, vs. Q4 2021 to $23.6 million;
- Gross profit as a percentage of revenues grew +3.1 percentage points to 32.2%, vs. Q4 2021;
- EBITDA grew +89.9%, or +$4.5 million, vs. Q4 2021 to $9.5 million;
- Basic and diluted EPS of $0.08 compared with $(0.04) in Q4 2021.
Note: EBITDA and Adjusted EBITDA are not earnings measures recognized by International Financial Reporting Standards (IFRS), do not have any standardized meanings prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. 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 description of the composition of EBITDA and Adjusted EBITDA, why we believe such measures are useful to investors and how we use those measures in our business, together with a quantitative reconciliation of net income (loss) to EBITDA and Adjusted EBITDA, respectively, see the information under the heading “Non-IFRS Measures” and Table 3 of DCM’s management’s discussion and analysis (MD&A) dated March 21, 2023 for the period ended December 31, 2022.
2022 OPERATIONAL HIGHLIGHTS – BUILDING A BETTER BUSINESS
- We are pleased to announce the planned acquisition of the Canadian operations of R.R. Donnelley & Sons (“RRD Canada”);
- Successfully onboarded 35 new enterprise clients in fiscal 2022;
- We completed our second “Voice of the Customer” survey, and our Apex Score measuring overall client engagement was up 14% from a year ago;
- We completed our third employee engagement survey in the past year, and our Gallup scores for “mean engagement levels” are up 8%, while our overall percentile ranking grew 18 points;
- With regards to our sustainability initiatives, we are pleased to report we have reforested almost 700,000 trees in connection with our PrintReleaf initiative, offsetting one hundred percent of our clients’ paper usage;
- Productivity improvements continued, with revenue per associate reaching our year-end target of $300,000, up a full +18% compared to year end 2021.
MANAGEMENT COMMENTARY
“We are pleased to report on our success in 2022, which demonstrates our continued progress building both a better and a bigger business. With our recent announcement of the planned acquisition of RRD Canada, we believe we are well-positioned to further accelerate our positive momentum,” says Richard Kellam, CEO and President of DCM.
“We are confident that RRD Canada will be an excellent strategic fit with our business and that the acquisition will enable us to better serve our customers by adding new capabilities to our existing offerings and accelerating our speed to market for new innovations. Importantly, we believe that combining DCM and RRD Canada will better position our business for sustainable and long-term success serving customers across North America. We believe the transaction also represents a compelling strategic opportunity for shareholders, as we expect the combined company to benefit from accelerated sales growth, reduced costs, enhanced financial performance, further operational efficiencies, and ultimately value creation.”
“I would like to thank the entire DCM team for a strong finish to 2022, and a special thanks to the team’s continued, relentless focus on building both a better and a bigger business. Results like these only come when everyone is moving forward together. We look forward to reporting on continued positive momentum through fiscal 2023.”
FISCAL 2022 AND FOURTH QUARTER 2022 EARNINGS CALL
The Company will host a conference call and webcast on Wednesday, March 22, 2023, at 9:00 a.m. Eastern time. Mr. Kellam, and James Lorimer, CFO, will present the fiscal 2022 and fourth quarter 2022 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: 262 426 723 179
Passcode: vg8BJ8
Or call in (audio only)
+1 647-749-9154,,998937139# Canada, Toronto
Phone Conference ID: 998 937 139#
The Company’s full results will be posted on its Investor Relations page and on www.sedar.com. A video message from Mr. Kellam will also be posted on the Company’s website.
Please see the below pdf for more information.
Click here to open the PDF
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, transformative tech-enabled solutions, and end-to-end service offering. Whether we’re running technology platforms, sending marketing messages, or managing print pieces, our goal is to make every interaction with us 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 the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
For further information, contact:
Mr. Richard Kellam
President & Chief Executive Officer
DATA Communications Management Corp.
(905) 791-3151
Mr. James E. Lorimer
Chief Financial Officer
DATA Communications Management Corp.
Tel: (905) 791-3151
[email protected]
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 that future 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. Additional factors are discussed under the headings “Liquidity and capital resources” and “Risks and Uncertainties” in DCM’s management’s discussion and analysis, annual information form, and 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 presentation 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.
