Data Communications Management Corp

TSX:DCM

Earnings Call Transcript 2022-Q1

[Richard Kellam, executive]

Since I joined DCM last year, we have continued our relentless focus on building both a better and a bigger business. In my March report to shareholders, I noted that in my 36 years of business experience, I found that momentum builds momentum.

On that note, the momentum we carried out of 2021 set us up to deliver one of the best comparable quarters since 2018, with quarter 1 revenues up 11.1% versus a year ago and up 13.8% compared to last quarter. Gross profit momentum also continued and was up 8.1%, a full $1.5 million versus last year, and up 14.7% versus the last quarter.

We expect this positive momentum in our business to continue through the balance of 2022. Our operational initiatives and relentless focus on cost controls are paying off and contributing to a better business. A great example of this is our favorable SG&A trend, with SG&A down 8.5% or $1.3 million and now at 19.7%, a full 4.2 percentage points lower than year ago.

I'm happy to report our EBITDA was up almost 30% versus last year. And in fact, this is the highest clean quarterly EBITDA we've reported for many years. And I'm not talking about adjusted EBITDA, but plain old earnings before interest, taxes, depreciation and amortization with no adjustments.

We had 0 restructure expense this quarter. Our current outlook calls for 0 restructuring through the balance of the year.

We continue to focus on our strategic shift from a print first to a digital-first company. Notably in the quarter, we hired Steve Livingstone to lead our digital asset management business. Steve brings an impressive 25 years of experience selling complex enterprise software. Steve's main focus is moving our $10 million in assemble opportunities through the sales funnel.

Meanwhile, our expert commercial team remain laser-focused on growing our businesses, with over $12 million worth of new client wins and expansion revenue this quarter. And most of these opportunities are we called tech-enabled, with our clients using our Flex platform to manage their workflows.

We also pushed forward on our ESG initiatives. As an example, since recently partnering with PrintReleaf, we have reforested over 207,000 trees, representing 100% of our clients' paper usage.

We are excited about our positive progress. I am very pleased with the continued momentum the DCM team is delivering, as witnessed by this exceptional quarter. As we discussed on every earnings call since I joined, we remain relentlessly focused on continuing to build both a better and a bigger business.