DATA Communications Management Corp. Announces Second Quarter Financial Results For 2019

HIGHLIGHTS

RECENT EVENTS

  • Launch of new ERP system across our core DCM business
  • Amendments to senior credit agreements, including addition of incremental credit availability
  • Annualized savings of approximately $10 million from actions taken to reduce headcount, including significant restructuring initiatives completed in June and July, and elimination of voluntarily vacated positions
  • Employee Share Ownership Plan launched during the quarter

SECOND QUARTER 2019

  • Revenues of $69.6 million compared with $78.2 million in the prior year
  • Gross margin as a percentage of revenue decreased to 22.6% from 23.8% in the prior year comparative period
  • Reduction in selling, general & administrative expenses by $2.2 million versus the same quarter last year
  • Adjusted EBITDA of $4.4 million, compared to $4.1 million in the prior year (See Table 6 and Table 7 and “Non-IFRS Measures” below). Excluding the effects of adopting IFRS 16 Leases (“IFRS 16”), Adjusted EBITDA was $1.7 million
  • Net loss of $3.8 million, including restructuring expenses of $3.2 million and one-time business reorganization costs of $0.5 million compared to net income of $1.2 million, including restructuring expenses of $0.7 million, acquisition costs of $0.3 million and one-time business reorganization costs of $0.8 million in the prior comparative period
  • Adjusted net income of $1.1 million, compared to $0.2 million in the prior comparative period (See Table 8 and Table 9 and “Non-IFRS Measures” below). Excluding the effects of adopting IFRS 16, Adjusted net income was $0.7 million

 

BRAMPTON, Ontario–(BUSINESS WIRE)–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 three and six months ended June 30, 2019.

“Your company’s second quarter was a challenging one as we march towards the transformation of a print/production business to become a more agile marketing and business services enterprise,” said Gregory J. Cochrane, CEO. “While we work through start-up issues with our new ERP system, we are staying the course. We remained firmly focused on building sustainable revenue with our core customer base, improving our gross margins, lowering our SG&A, paying down debt and making strategic investments in technology.”

LAUNCH OF NEW ERP SYSTEM

On June 3, 2019, DCM launched its new ERP system across its core DCM business, excluding Eclipse, Thistle and Perennial. DCM experienced numerous operational challenges in connection with the implementation of the ERP system, which led to a decline in production levels (and, as a result, lower revenue recognized during the month) and shipments, and negatively impacted the processing of accurate and timely billings to customers. DCM believes that it has addressed the material challenges encountered with the launch of the ERP system. However, the temporary lag in the issuance of invoices resulted in what management believes will be short term constraints on DCM’s working capital and financial liquidity. These challenges also required DCM to obtain from its senior lenders a number of waivers, amendments and related consents under the terms of its existing credit facilities.

Having worked through the initial launch period challenges, management’s focus is on cleaning up a back log of orders and billings which were to occur in June. DCM’s open order production backlog was approximately $6 million higher than normal at the end of July. DCM expects to process this backlog in August and September. Production revenues, billings and working capital are expected to return to normalized levels in the third quarter of 2019.

AMENDMENT TO FPD A&R CREDIT FACILITIES

On July 25, 2019, Fiera Private Debt Fund III L.P (“FPD III”), Fiera Private Debt Fund IV L.P (“FPD IV”) and Fiera Private Debt Fund V L.P (“FPD V”) agreed to amend the credit agreements between DCM and FPD III, FPD IV and FPD V (“Amended FPD A&R Credit Facilities”). For each of the FPD A&R Credit Facilities, principal payments for the months of August 15, 2019 through December 15, 2019 will be deferred and paid out as bullet payments on each FPD A&R Credit Facility’s respective maturity date. During this period, the interest rate on each of the FPD III, FPD IV and FPD V A&R Credit Facilities will be increased to 7.25% per annum. The increase in the interest rates will be treated as a payment in kind (“PIK”) with the interest premium calculated and accrued on a monthly basis for each of the three credit facilities. The PIK is required to be repaid in cash prior to January 15, 2020 when the regularly scheduled principal and interest payments on each credit facility resume.

As a condition to those amendments, DCM has agreed to defer any payments on its vendor take-back promissory notes effective as of the date of the Amended FPD A&R Credit Facilities. In addition, the waiver obtained on October 26, 2018 to reduce the requirement to maintain a debt service coverage ratio from 2.0 to 1.85 times for the purposes of determining its Excess Cash Flow, and permit payments on its vendor take-back promissory notes, was revoked. Resumption of payments on vendor take-back promissory notes will require prior approval by Fiera Private Debt Fund GP Inc (“FPD”).

In addition, DCM is also required to secure additional financial support from its bank lender (the “Bank”), Crown Capital LP Partner Funding Inc. (“Crown”) and/or related parties of at least $7 million (see “Amendment to Bank A&R Credit Facility”, “Related Party Promissory Notes” and “Amendment to Crown Facility” below for further details) on or before August 16, 2019.

AMENDMENT TO BANK A&R CREDIT FACILITY

On July 31, 2019, DCM entered into a third amendment to increase the revolving commitment on its revolving credit facility (the “Bank A&R Credit Facility”) with a Canadian chartered bank from an aggregate outstanding principal amount of up to $35 million to up to $42 million between July 31 and December 31, 2019. In addition, the amendment includes the Bank’s consent to the amendments made to the FPD A&R Credit Facilities on July 25, 2019.

Given the borrowing base under the terms of the Bank A&R Credit Facility did not reach the new maximum limit of $42 million, the shortfall in additional financing required by FPD and the Bank totaling $7 million was secured through new promissory notes issued to certain parties, including related parties of DCM, in conjunction with an increase in the principal amount payable under its existing non-revolving term loan facility with Crown Capital Partner Funding LP (the” Crown Facility”) (see “Related Party Promissory Notes” and “Amendment to Crown Facility” below for further details). Under the provisions of the third amendment to the Bank A&R Credit Facility, DCM is only permitted to make regular scheduled payments of interest during the term of the Related Party Promissory Notes and cannot repay any portion of principal prior to the end of the term, and on maturity, without written consent of the Bank.

RELATED PARTY PROMISSORY NOTES

On July 31, 2019, DCM issued promissory notes (the “Related Party Promissory Notes”) to certain parties, including related parties of DCM, in the aggregate principal amount of $1.0 million. The Related Party Promissory Notes bear interest at the rate of 10% per annum, payable quarterly on the first business day of each fiscal quarter beginning September 3, 2019, with principal repayable on or before the July 31, 2020 maturity date. The Related Party Promissory Notes are subordinated to DCM’s obligations under the Bank A&R Credit Facility, the FPD A&R Credit Facilities and the Crown Facility on the same basis as the parties to the vendor take-back promissory notes issued in connection with DCM’s recent acquisitions (the “VTB Noteholders”) as provided for in the amended and restated inter-creditor agreement dated May 7, 2018.

AMENDMENT TO CROWN CREDIT FACILITY

On August 7, 2019, DCM received confirmation from Crown that it intends to provide an increase in the principal amount outstanding on its existing Crown Facility by $7 million. All terms of the incremental funding are consistent with the provisions under the original Crown Facility. As part of this amendment, it is intended that the Related Party Promissory Notes will convert into a facility on substantially the same basis as, and ranking pari passu with, Crown. DCM is currently in the process of finalizing the amendment with Crown and expects to close this amendment and additional funding on or before August 16, 2019.

PIVOT TO MARKETING SERVICES AND RELATED RESTRUCTURING INITIATIVES

Management continues to critically review each part of DCM’s business with the objective of becoming a premier marketing and business services company serving major organizations in North America.

During the quarter, DCM sold its loose-leaf binders and index tab business to Southwest Business Products Ltd. (“Southwest”) for cash proceeds of $0.6 million. The proceeds were used for general working capital requirements. DCM also entered into a long-term supply agreement with Southwest as a preferred vendor to DCM for the supply of binders, index tabs and related products. This transaction aligns with DCM’s strategy to focus on products and solutions that are critical to its top customers, and to source non-core offerings from other leading providers where it makes strategic sense.

As part of DCM’s commitment to improving gross margins, and reducing selling, general and administration expenses (“SG&A”), DCM initiated a series of staff reductions across its various production facilities. During the quarter, headcount was reduced by approximately 75 individuals, and total restructuring expenses of $3.2 million were incurred. We expect to see an annualized savings of approximately $4.8 million related to these changes.

Further, in July 2019, DCM incurred additional restructuring costs of approximately $2.1 million in connection with further reductions in labour across its various manufacturing facilities and in SG&A staff and headcount was reduced by approximately another 30 individuals. We expect to see an annualized savings of approximately $2.7 million related to these changes.

In aggregate, approximately $10 million in annualized savings are expected to be realized, of which $7.5 million relates to headcount reductions for restructuring initiatives related to the second quarter and July 2019, and $2.5 million relates to 30 voluntarily vacated positions which will not be replaced. These changes are expected to immediately contribute to stronger margins in the second half of 2019.

Following the completion of DCM’s transition to its new ERP system, further annualized cost savings in improved processes and lower overhead are expected in the range of $3 to $4 million.

EMPLOYEE SHARE OWNERSHIP PLAN AND SENIOR EXECUTIVE SHARE PURCHASES

During the second quarter, DCM launched an employee share ownership plan (“ESOP” or the “Plan”), which is available to all full-time employees of the Company and its subsidiaries. To date, more than 100 employees have enrolled in the Plan. Under the Plan, full-time employees of DCM may contribute up to a maximum of ten per cent of their base salary through regular, automatic payroll deductions. For each $1.00 contributed to the ESOP by an employee, DCM makes a matching contribution of $0.25, up to an annual company contribution of $750 per employee per fiscal year. Employee and matching contributions are used to acquire common shares of the Company (“Common Shares”) on behalf of employees through open market purchases through the facilities of the Toronto Stock Exchange (“TSX”). Common Shares will not be issued from treasury under the Plan.

In addition, during the second quarter, senior executives and directors as a group purchased more than 235,000 shares on the TSX. Insider reporting details are available on www.SEDI.ca.

PERENNIAL JOINT VENTURE WITH APHRIA WOUND DOWN

In June 2019, it was mutually agreed to terminate the joint venture (the “JV”) initiative between Perennial and Aphria Inc. (“Aphria”). Both parties determined the relationship had developed to a point where further progress would be dependent on government legislation and regulatory approvals. Given both parties had more pressing priorities in the near term, the JV was wound up on positive terms. DCM’s net financial investment in the JV was nominal. Aphria continues to be a significant client of DCM as it pertains to our labels and packaging solutions.

RESULTS OF OPERATIONS

All financial information in this press release is presented in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

TABLE 1 The following table sets out selected historical consolidated financial information for the periods noted.

For the periods ended June 30, 2019 and 2018

January 1 to June 30, 2019

 

January 1 to June 30, 2018

(in thousands of Canadian dollars, except share and per share amounts, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Revenues

$

148,172

 

 

$

 

 

$

148,172

 

 

$

166,692

 

Cost of revenues

112,619

 

 

(930

)

 

111,689

 

 

126,628

 

Gross profit

35,553

 

 

930

 

 

36,483

 

 

40,064

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

32,821

 

 

(133

)

 

32,688

 

 

35,422

 

Restructuring expenses

4,871

 

 

 

 

4,871

 

 

800

 

Acquisition costs

 

 

 

 

 

 

313

 

 

37,692

 

 

(133

)

 

37,559

 

 

36,535

 

(Loss) income before finance costs and income taxes

(2,139

)

 

1,063

 

 

(1,076

)

 

3,529

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 

 

Interest expense, net

2,404

 

 

1,803

 

 

4,207

 

 

2,408

 

Amortization of transaction costs

223

 

 

 

 

223

 

 

301

 

 

2,627

 

 

1,803

 

 

4,430

 

 

2,709

 

(Loss) income before income taxes

(4,766

)

 

(740

)

 

(5,506

)

 

820

 

 

 

 

 

 

 

 

 

Income tax (recovery) expense

 

 

 

 

 

 

 

Current

(474

)

 

 

 

(474

)

 

555

 

Deferred

(955

)

 

 

 

(955

)

 

(304

)

 

(1,429

)

 

 

 

(1,429

)

 

251

 

Net (loss) income for the period

$

(3,337

)

 

$

(740

)

 

$

(4,077

)

 

$

569

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

$

(0.16

)

 

$

(0.03

)

 

$

(0.19

)

 

$

0.03

 

Diluted (loss) earnings per share

$

(0.16

)

 

$

(0.03

)

 

$

(0.19

)

 

$

0.03

 

Weighted average number of common shares outstanding, basic

21,523,515

 

 

21,523,515

 

 

21,523,515

 

 

20,456,993

 

Weighted average number of common shares outstanding, diluted

21,523,515

 

 

21,523,515

 

 

21,523,515

 

 

20,495,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The adoption of IFRS 16 resulted in a lower net income by $0.7 million for the six months ended June 30, 2019 versus on a pre IFRS 16 basis. Lease payments were previously expensed directly through the statement of operations as cost of sales or SG&A expenses for a total of $5.3 million. Under IFRS 16, (i) the $5.3 million lease payments are recognized as a reduction of lease liabilities which are presented as finance lease payments on the condensed interim consolidated statement of cash flow, (ii) a depreciation expense of the ROU Asset is recognized in cost of sales and SG&A for an aggregate amount of $4.2 million, and (iii) finance charges on the lease liability were recognized as interest expense of $1.8 million.

TABLE 2 The following table sets out selected historical consolidated financial information for the periods noted.

For the periods ended June 30, 2019 and 2018

April 1 to June 30, 2019

 

April 1 to June 30, 2018

(in thousands of Canadian dollars, except share and per share amounts, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Revenues

$

69,623

 

 

$

 

 

$

69,623

 

 

$

78,176

 

Cost of revenues

54,421

 

 

(519

)

 

53,902

 

 

59,587

 

Gross profit

15,202

 

 

519

 

 

15,721

 

 

18,589

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

15,604

 

 

(74

)

 

15,530

 

 

17,750

 

Restructuring expenses

3,189

 

 

 

 

3,189

 

 

736

 

Acquisition costs

 

 

 

 

 

 

270

 

 

18,793

 

 

(74

)

 

18,719

 

 

18,756

 

(Loss) income before finance costs and income taxes

(3,591

)

 

593

 

 

(2,998

)

 

(167

)

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 

 

Interest expense, net

1,155

 

 

920

 

 

2,075

 

 

1,271

 

Amortization of transaction costs

86

 

 

 

 

86

 

 

158

 

 

1,241

 

 

920

 

 

2,161

 

 

1,429

 

(Loss) income before income taxes

(4,832

)

 

(327

)

 

(5,159

)

 

(1,596

)

 

 

 

 

 

 

 

 

Income tax (recovery) expense

 

 

 

 

 

 

 

Current

(506

)

 

 

 

(506

)

 

(288

)

Deferred

(899

)

 

 

 

(899

)

 

(114

)

 

(1,405

)

 

 

 

(1,405

)

 

(402

)

Net (loss) income for the period

$

(3,427

)

 

$

(327

)

 

$

(3,754

)

 

$

(1,194

)

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

$

(0.16

)

 

$

(0.02

)

 

$

(0.17

)

 

(0.06

)

Diluted (loss) earnings per share

$

(0.16

)

 

$

(0.02

)

 

$

(0.17

)

 

(0.06

)

Weighted average number of common shares outstanding, basic

21,523,515

 

 

21,523,515

 

 

21,523,515

 

 

20,870,234

 

Weighted average number of common shares outstanding, diluted

21,523,515

 

 

21,523,515

 

 

21,523,515

 

 

20,870,234

 

The adoption of IFRS 16 resulted in a lower net income by $0.3 million for the three months ended June 30, 2019 versus on a pre IFRS 16 basis. Lease payments were previously expensed directly through the statement of operations as cost of sales or SG&A expenses for a total of $2.7 million. Under IFRS 16, (i) the $2.7 million lease payments are recognized as a reduction of lease liabilities which are presented as finance lease payments on the condensed interim consolidated statement of cash flow, (ii) a depreciation expense of the ROU Asset is recognized in cost of sales and SG&A for an aggregate amount of $2.2 million, and (iii) finance charges on the lease liability were recognized as interest expense of $0.9 million.

TABLE 3 The following table sets out selected historical consolidated financial information for the periods noted.

As at June 30, 2019 and December 31, 2018

As at June 30, 2019

 

As at December 31, 2018

(in thousands of Canadian dollars, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Current assets

$

81,446

 

 

$

(235

)

 

$

81,211

 

 

$

85,455

 

Current liabilities

63,041

 

 

7,770

 

 

70,811

 

 

64,716

 

 

 

 

 

 

 

 

 

Total assets

137,583

 

 

61,018

 

 

198,601

 

 

142,231

 

Total non-current liabilities

70,675

 

 

54,072

 

 

124,747

 

 

70,003

 

 

 

 

 

 

 

 

 

Shareholders’ equity

$

3,782

 

 

$

(739

)

 

$

3,043

 

 

$

7,512

 

Table 3 highlights the changes to the condensed interim consolidated statement of financial position as at June 30, 2019 as a result of the adoption of IFRS 16 as at January 1, 2019. The significant changes relate to the following:

  • DCM recognized a ROU Asset and a lease liability at the lease commencement date for substantially all of its leases which increased total assets and total liabilities (current and long-term portion);
  • The ROU Asset was adjusted for any lease payments made at or before the lease commencement date, less any lease incentives and onerous lease liabilities, which were previously classified within current assets and total liabilities (current and long-term portion), respectively; and
  • With respect to subleases where DCM is the lessor, DCM has reclassified the finance lease receivable from total liabilities to total assets, with the short-term portion allocated to current assets.

TABLE 4 The following table sets out selected historical consolidated financial information for the periods noted. See “Non-IFRS Measures” section above for more details.

For the periods ended June 30, 2019 and 2018

January 1 to June 30, 2019

 

January 1 to June 30, 2018

(in thousands of Canadian dollars, except percentage amounts, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Revenues

$

148,172

 

 

$

 

 

$

148,172

 

 

$

166,692

 

 

 

 

 

 

 

 

 

Gross profit

$

35,553

 

 

$

930

 

 

$

36,483

 

 

$

40,064

 

Gross profit, as a percentage of revenues

24.0

%

 

 

 

24.6

%

 

24.0

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

$

32,821

 

 

$

(133

)

 

$

32,688

 

 

$

35,422

 

As a percentage of revenues

22.2

%

 

 

 

22.1

%

 

21.2

%

 

 

 

 

 

 

 

 

Adjusted EBITDA (see Table 6)

$

6,998

 

 

$

5,297

 

 

$

12,295

 

 

$

10,438

 

As a percentage of revenues

4.7

%

 

 

 

8.3

%

 

6.3

%

 

 

 

 

 

 

 

 

Net (loss) income for the period

$

(3,337

)

 

$

(740

)

 

$

(4,077

)

 

$

569

 

 

 

 

 

 

 

 

 

Adjusted net income (see Table 8)

$

907

 

 

$

(740

)

 

$

167

 

 

$

2,340

 

As a percentage of revenues

0.6

%

 

 

 

0.1

%

 

1.4

%

TABLE 5 The following table sets out selected historical consolidated financial information for the periods noted. See “Non-IFRS Measures” section above for more details.

For the periods ended June 30, 2019 and 2018

April 1 to June 30, 2019

 

April 1 to June 30, 2018

(in thousands of Canadian dollars, except percentage amounts, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Revenues

$

69,623

 

 

$

 

 

$

69,623

 

 

$

78,176

 

 

 

 

 

 

 

 

 

Gross profit

$

15,202

 

 

$

519

 

 

$

15,721

 

 

$

18,589

 

Gross profit, as a percentage of revenues

21.8

%

 

 

 

22.6

%

 

23.8

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

$

15,604

 

 

$

(74

)

 

$

15,530

 

 

$

17,750

 

As a percentage of revenues

22.4

%

 

 

 

22.3

%

 

22.7

%

 

 

 

 

 

 

 

 

Adjusted EBITDA (see Table 7)

$

1,686

 

 

$

2,750

 

 

$

4,436

 

 

$

4,086

 

As a percentage of revenues

2.4

%

 

 

 

6.4

%

 

5.2

%

 

 

 

 

 

 

 

 

Net (loss) income for the period

$

(3,427

)

 

$

(327

)

 

$

(3,754

)

 

$

(1,194

)

 

 

 

 

 

 

 

 

Adjusted net income (loss) (see Table 9)

$

(730

)

 

$

(327

)

 

$

(1,057

)

 

$

241

 

As a percentage of revenues

-1.0

%

 

 

 

-1.5

%

 

0.3

%

TABLE 6 The following table provides reconciliations of net (loss) income to EBITDA and of net loss to Adjusted EBITDA for the periods noted. See “Non-IFRS Measures” section above for more details.

EBITDA and Adjusted EBITDA reconciliation

For the periods ended June 30, 2019 and 2018

January 1 to June 30, 2019

 

January 1 to June 30, 2018

(in thousands of Canadian dollars, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Net (loss) income for the period (1)

$

(3,337

)

 

$

(740

)

 

$

(4,077

)

 

$

569

 

 

 

 

 

 

 

 

 

Interest expense, net (1)

2,404

 

 

1,803

 

 

4,207

 

 

2,408

 

Amortization of transaction costs

223

 

 

 

 

223

 

 

301

 

Current income tax expense (recovery)

(474

)

 

 

 

(474

)

 

555

 

Deferred income tax recovery

(955

)

 

 

 

(955

)

 

(304

)

Depreciation of property, plant and equipment

2,150

 

 

 

 

2,150

 

 

2,324

 

Amortization of intangible assets

1,244

 

 

 

 

1,244

 

 

2,301

 

Depreciation of the ROU Asset (1)

 

 

4,234

 

 

4,234

 

 

 

EBITDA

$

1,255

 

 

$

5,297

 

 

$

6,552

 

 

$

8,154

 

 

 

 

 

 

 

 

 

Restructuring expenses

4,871

 

 

 

 

4,871

 

 

800

 

One-time business reorganization costs (2)

872

 

 

 

 

872

 

 

1,171

 

Acquisition costs

 

 

 

 

 

 

313

 

Adjusted EBITDA

$

6,998

 

 

$

5,297

 

 

$

12,295

 

 

$

10,438

 

  1. 2019 results include the impact of the adoption of new accounting standard IFRS 16. Refer to note 3 of the condensed interim consolidated financial statements for the three and six months ended June 30, 2019 and related management’s discussion & analysis for further details of the impact of the adoption of new accounting standards.
  2. One-time business reorganization costs include non-recurring headcount reduction expenses for employees that did not qualify as restructuring costs. This also includes one-time expenses for the JV that was dissolved on July 12, 2019.

TABLE 7 The following table provides reconciliations of net (loss) income to EBITDA and of net (loss) income to Adjusted EBITDA for the periods noted. See “Non-IFRS Measures” section above for more details.

EBITDA and Adjusted EBITDA reconciliation

For the periods ended June 30, 2019 and 2018

April 1 to June 30, 2019

 

April 1 to June 30, 2018

(in thousands of Canadian dollars, unaudited)

 

Proforma

without IFRS 16

adjustment

 

IFRS 16

adjustments

 

As reported

 

As reported

Net loss for the period (1)

$

(3,427

)

 

$

(327

)

 

$

(3,754

)

 

$

(1,194

)

 

 

 

 

 

 

 

 

Interest expense, net (1)

1,155

 

 

920

 

 

2,075

 

 

1,271

 

Amortization of transaction costs

86

 

 

 

 

86

 

 

158

 

Current income tax recovery

(506

)

 

 

 

(506

)

 

(288

)

Deferred income tax recovery

(899

)

 

 

 

(899

)

 

(114

)

Depreciation of property, plant and equipment

1,031

 

 

 

 

1,031

 

 

1,176

 

Amortization of intangible assets

597

 

 

 

 

597

 

 

1,232

 

Depreciation of the ROU Asset (1)

 

 

2,157

 

 

2,157

 

 

 

EBITDA

$

(1,963

)

 

$

2,750

 

 

$

787

 

 

$

2,241

 

 

 

 

 

 

 

 

 

Restructuring expenses

3,189

 

 

 

 

3,189

 

 

736

 

One-time business reorganization costs (2)

460

 

 

 

 

460

 

 

839

 

Acquisition costs

 

 

 

 

 

 

270

 

Adjusted EBITDA

$

1,686

 

 

$

2,750

 

 

$

4,436

 

 

$

4,086

 

Contacts

Mr. Gregory J. Cochrane

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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