31 slides from Data Communications Management's earnings presentation, May 14, 2024
Slide 1: Fiscal Q1 2024 Report to Shareholders
Fiscal Q1 2024 Report to Shareholders DATA Communications Management Corp. DCM-TSX | DCMDF-OTCQX May 14, 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 Agenda
• Q1 2024 Highlights and Results Today’s Agenda • 2024 Balance of Year Priorities • Questions and Answers 3
Slide 4: Q1 2024 Highlights and Results
Q1 2024 Highlights and Results 4
Slide 5: Q1 2024 Highlights
Q1 2024 Highlights • Third full quarter of DCM + MCC results • Great overall integration progress • Net debt down -46.1% since acquisition close • Positive outlook for 2024 based on: • Order trends / timing • New logo wins • Operating performance improvements • Strategic revenue management • Complet
Slide 6: Revenue $129.3M
Revenue +69.9% $129.3M vs. Q1 2023 +$53.2M vs. Q1 2023 Q1 revenue slightly lower than expected due to shifting of large client projects into future quarters 6
Slide 7: Strong New Business Momentum
Strong New Business Momentum +$1.9M revenue secured from 10 +$12M in “wallet share/expansion revenue” new client wins that will flow into won from current clients future quarters 9
Slide 8: Revenue by Reported Segment
Revenue by Reported Segment Product Sales Technology Services Freight $113.1M $7.7M $3.6M +69.6% vs. Q1 2023 +427.5% vs. Q1 2023 +80.2% vs. Q1 2023 Warehousing Tech-enabled Hardware Marketing & Other $2.6M $1.6M $0.6M +31.5% vs. Q1 2023 -51.3% vs. Q1 2023 +8.0% vs. Q1 2023 Solid year over year incre
Slide 9: Gross Profit $37.3M
Gross Profit +57.9% $37.3M 28.9% vs. Q1 2023 +$13.7M vs. Q1 2023 vs. 31.1% in Q1 2023 Actively focused on returning our combined business to pre-acquisition margins 11
Slide 10: On path to return to +30% Gross Margins
On path to return to +30% Gross Margins Operating efficiency initiatives drove 60 basis point gross margin improvement in Q1 Pre-Acquisition - Pro Forma Post-Acquisition 28.9% 28.3% 26.5% 25.4% 25.7% 25.3% 24.6% 2021* 2022* Q1 2023* Q2 2023** Q3 2023 Q4 2023 Q1 2024 Consolidated GM% * Unaudited. Inf
Slide 11: Adjusted EBITDA $18.7M
Adjusted EBITDA* $18.7M 14.4% +46.2% vs. Q1 2023 of Revenue vs. 16.8% in Q1 2023 Synergy benefits continue in Q1 2024, expected to contribute to improved overall profitability balance of year * Adjusted EBITDA is a non-IFRS measure, for a reconciliation to its most comparable IFRS Accounting Standar
Slide 12: Q1 Restructuring and One-Time Costs
Q1 Restructuring and One-Time Costs $1.1M $0.3M Restructuring Acquisition & Integration Expenses Expenses (one-time, deal related) Majority of planned organizational, operational and procurement restructuring expenses recognized in 2023 14
Slide 13: 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 reconciliat
Slide 14: Net Debt -$67.0M
Net Debt* Net Debt Reduction Since MCC Acquisition (millions) $145.3 $78.3 -$67.0M net debt reduction -46.1% 24-Apr-23 Q1 2024 since MCC Acquisition * Net debt is a non-IFRS measure, for a reconciliation to its most comparable IFRS Accounting Standards measure, credit facilities, see “Definition of
Slide 15: SG&A $25.4M
SG&A $25.4M -$2.5M -9.9% vs. Q1 2023 vs. Q1 2023 (pro forma) (pro forma) Organizational improvements commenced immediately post-acquisition 17
Slide 16: Revenue per Associate
Revenue per Associate* Headcount at End of Period Revenue per Associate (thousands) 1859 $300.9 $293.0 $302.4 $297.2 1787 1743 $255.2 $240.6 1,433 $225.2 $231.7 1,221 1,078 922 910 2018 2019 2020 2021 2022 April 24 2023 Q1 2024 2018 2019 2020 2021 2022 April 24 2023 Q1 2024 2023* 2023* * Total Activ
Slide 17: Capital Investment $2.8M
Capital Investment $2.8M 2024 Outlook in PP&E Strategic Investments vs. $0.6M in Q1 2023 Accelerated capital investments support our gross margin improvement goal 19
Slide 18: You print one. We'll plant one.
You print one. We’ll plant one. In Q1 2024 we reforested 265k trees. +1.7M trees reforested since commencement of program in mid-2022 20
Slide 19: 2024 Balance of Year Priorities
2024 Balance of Year Priorities
Slide 20: 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 21: Technology Services
Technology Services A centralized marketing resource hub for procuring and allocating personalized customer Q1 2024 communications content A digital library that allows A smart allocation and kitting organizations to easily store, manage platform program that ensures and find their digital assets, e
Slide 22: Questions and Answers
Questions and Answers 27
Slide 23: 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 24: Q1 2024 Summary P&L
Q1 2024 Summary P&L
Slide 25: First Quarter 2024 Key Financial Results
First Quarter 2024 Key Financial Results Quarter ended March 31, in millions Selected financial information Q1 2024 Q1 2023* Better/(Worse) Revenue $129.3 $76.1 +$53.2 Gross profit $37.3 $23.6 +$13.7 Gross margin (%) 28.9% 31.1% (220 bps) SG&A $25.4 $13.7 ($11.6) Restructuring expenses $1.1 - ($1.1)
Slide 26: Non-IFRS Accounting Standards Measures
Non-IFRS Accounting Standards Measures 31
Slide 27: 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 28: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation 33
Slide 29: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 34
Slide 30: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 35
Slide 31: Thank you
Thank you