33 slides from Data Communications Management's earnings presentation, Mar 20, 2024
Slide 1: Fiscal 2023 Report to Shareholders
Fiscal 2023 Report to Shareholders DATA Communications Management Corp. DCM-TSX | DCMDF-OTCQX March 20, 2024
Slide 2: Forward-looking Statements and Information Disclosure
Forward-looking Statements Information Disclosure Forward-looking Statements Non-IFRS Measures Certain statements in this presentation constitute “forward-looking” statements that involve known This presentation includes certain non-IFRS measures as supplementary information. In and unknown risks, u
Slide 3: Today's Objectives
• Review Highlights of 2023 • Full Year 2023 Results Today’s Objectives • Q4 2023 Results • 2024 Priorities • Questions and Answers 3
Slide 4: 2023 Highlights
2023 Highlights • Completed MCC acquisition April 24, 2023 • Quickly integrated our teams, prioritizing Sales & Operations • Maintained Commercial momentum – focus on current clients + new logos • Announced footprint consolidation – 14 to 10 plants • Completed Edmonton/Calgary consolidation in Decem
Slide 5: Full Year 2023 Results
Full Year 2023 Results 5
Slide 6: Revenue $447.7M
Revenue +63.5% $447.7M vs. 2022 +$173.9M vs. 2022 Acquisition of MCC contributed significantly to topline growth, with underlying performance positive to prior year 6
Slide 7: Revenue by Reported Segment
Revenue by Reported Segment Product Sales Technology Services Freight $396.7M $14.7M $13.3M +65.7% vs. 2022 +176.9% vs. 2022 +57.8% vs. 2022 Warehousing Tech-enabled Hardware Marketing & Other $12.2M $8.5M $2.3M +66.4% vs. 2022 -29.9% vs. 2022 +87.8% vs. 2022 Solid growth across all reported segment
Slide 8: Digital Business Performance
Digital Business Performance A centralized marketing resource hub for procuring and allocating personalized customer Fiscal 2023 communications content A digital library that allows A smart allocation and kitting organizations to easily store, manage platform program that ensures and find their digi
Slide 9: Digital Signage & Display
Digital Signage & Display Recently entered the Digital Signage business 9
Slide 10: Gross Profit $118.9M
Gross Profit +41.2% $118.9M 26.6% vs. 2022 +$34.7M vs. 2022 vs. 30.8% in 2022 Lower gross profit margins from MCC business, actively focused on returning to pre-acquisition margins 10
Slide 11: Objective to return to +30% Gross Margins
Objective to return to +30% Gross Margins Pre-Acquisition Post-Acquisition 32.3% 31.4% 31.1% 29.3% 30.0% 26.9% 26.0% 25.2% 24.6% 23.5% 19.9% 18.7% 17.6% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023* Q3 2023 Q4 2023 DCM GM% MCC GM% Blended GM% *MCC acquisition effective April 24, 2023 11
Slide 12: Adjusted EBITDA $53.4M
Adjusted EBITDA* $53.4M 11.9% +30.3% vs. 2022 of Revenue vs. 15.0% in 2022 Synergy realizations commenced in 2023, expected to contribute to improved overall profitability going forward * Adjusted EBITDA is a non-IFRS measure, for a reconciliation to its most comparable 12 IFRS Accounting Standards
Slide 13: Restructuring and One-Time Costs
Restructuring and One-Time Costs $20.3M $10.9M Restructuring Acquisition & Integration Expenses Expenses (one-time, deal related) Commenced planned organizational, operational and procurement synergies 13
Slide 14: Synergies
Synergies* Operational Organizational Procurement Revenue Maintaining objective of $30M - $35M in annualized synergies, focused on achieving full run-rate savings over the next 12 months * “Annualized synergies” have not been prepared in accordance with IFRS Accounting Standards, nor has a reconcili
Slide 15: Free Cash Flow
Free Cash Flow* $16.5M $12.5M +31.9% in 2023 in 2022 2023 excludes first quarter of MCC, typically the highest gross margin (and FCF) contribution to the business * Free Cash Flow (FCF) is a non-IFRS measure; for a reconciliation to its most comparable IFRS Accounting Standards measure, total cash g
Slide 16: Total Debt
Total Debt -30% Total Debt Outstanding (millions) $145.3 $101.9 $79.8 $48.2 $37.1 $27.3 $22.6 2019 2020 2021 2022 Q1 2023 *April 24 2023 2023 -30% reduction in total debt since MCC acquisition 16
Slide 17: Net Debt
Net Debt* $125.7 Net Debt / Repayments in millions -$24.2 Increase -$23.1 $85.8 Decrease -$6.3 -$5.9 Total $19.6 Net Debt Q1 2023 MCC Acquisition Private Placement Oshawa Sale Fergus Sale Working Capital Net Debt Q4 2023 … and a net debt reduction of -39% to $85.8M since MCC Acquisition Subsequent t
Slide 18: SG&A $87.2M
SG&A $87.2M 19.5% +60.3% vs. 2022 of revenue vs. 19.9% in 2022 SG&A expenses as percent of revenue improved post-acquisition 18
Slide 19: Revenue per Associate
Revenue per Associate* Headcount at End of Period Revenue per Associate (thousands) 1787 $300.9 $302.4 $255.2 1,433 $225.2 $231.7 $240.6 1,221 1,078 922 910 2018 2019 2020 2021 2022 2023* 2018 2019 2020 2021 2022 2023* * 2023 Active employees * 2023 calculation based on FY Normalized Revenue of $540
Slide 20: Capital Investment and 2024 Outlook
Capital Investment $4.2M 2024 Outlook in PP&E Strategic Investments +vs. $1.5M in 2022 Increased spend in 2023 for facility prep / consolidation Realized $29.5M net from sale/leaseback of facilities, and $1.3M from sale of equipment in 2023 20
Slide 21: ESG Structure
ESG Structure Environment Social Governance Sustainability Open Regulatory Management System Compliance Communication (SMS) Certified Board Management Business DEI Ethics Associate Safety & Wellness Security Giving Back 21
Slide 22: You print one. We'll plant one.
You print one. We’ll plant one. Reforested +1.5M trees since commencement of program in mid-2022 and now almost 1M annually post acquisition including MCC contribution 22
Slide 23: Q4 2023 Results
Q4 2023 Results
Slide 24: Fourth Quarter 2023 Key Financial Results
Fourth Quarter 2023 Key Financial Results Quarter ended December 31, in millions Selected financial information Q4 2023 Q4 2022* Better/(Worse) Revenue $130.0 $73.0 +$56.9 Gross profit $32.8 $23.6 +$9.2 Gross margin (%) 25.2% 32.2% (700 bps) SG&A $25.3 $13.6 ($11.7) Restructuring expenses $10.6 - ($
Slide 25: 2024 Priorities
2024 Priorities
Slide 26: 2024 Strategic Priorities
2024 Strategic Priorities Gross Profit Growing our Generate Higher MCC Integration Improvement Business Levels of FCF • Plant consolidation • Strategic revenue • Expanding product / • Focus on margin • Harmonize back-office management services offerings improvement & systems • Lower overheads, • Lev
Slide 27: Contact Information
Contact For more information, please visit www.datacm.com or for investor, media and corporate development inquiries Information reach out to: Richard Kellam James Lorimer President & CEO Chief Financial Officer rkellam@datacm.com jlorimer@datacm.com +1 (416) 451-1117 +1 (905) 494-4101 DCM – TSX | D
Slide 28: Non-IFRS Measures
Non-IFRS Measures 28
Slide 29: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation 29
Slide 30: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation The following table provides reconciliations of net (loss) income to EBITDA and of net (loss) income to Adjusted EBITDA for the periods noted, following adoption of “net fair value (gains) losses on financial liabilities at fair value through profit or loss”
Slide 31: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 31
Slide 32: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 32
Slide 33: Thank you
Thank you