- One of the Company's best quarters on record in terms of
revenue, taking into consideration the TM Group
divestiture
- ARR more than doubled to $117
million1,2 since Q1 FY23 and represents 27% of
total revenue
- Announces business performance improvement plan to
significantly improve free cash flow performance and reduce
leverage ratio to less than four times total net debt to adjusted
EBITDA
TORONTO, Oct. 30,
2023 /CNW/ - Dye & Durham Limited ("Dye &
Durham" or the "Company") (TSX: DND), one of the world's
largest providers of cloud-based legal practice management
software, today announced its financial results for the three
months ended September 30, 2023.
"This was our second-best quarter on record in terms of revenue
– backing out TM Group – underscoring the strength and resilience
of our business and its consistent ability to generate ample free
cash flow to finance our operations, meet our debt obligations and
fuel future growth. With more than 27% of our revenue representing
ARR, we feel that we are extremely well positioned to continue to
build Dye & Durham into a global legal technology leader," said
Dye & Durham CEO Matthew Proud.
"During the quarter, we drove significant progress against our
strategic priorities, anchored in our focus on growing organic
revenue through increased sales in each of our markets. We are
prioritizing the reduction of our leverage ratio as quickly as
possible to less than four times total net debt to adjusted EBITDA,
as evidenced by $45 million in debt
reduction during the quarter. At the same time, this quarter we
closed small deals in the legal practice management space that we
locked into in fiscal 2023."
Annual recurring revenue ("ARR") growth
The Company continues to grow its ARR. ARR was $117 million of total revenue1,2 which
was 27% of total revenue as of September 30,
2023. This is more than double the 13% at the same point in
the prior year.
First Quarter Fiscal 2024 Highlights
- Revenue of $120.1 million,
unchanged from the same period in the prior year. The comparative
period revenue included an additional $9.3
million of revenue from TM Group, which was divested on
August 3, 2023. Excluding the impact
of TMG divesture, revenue has grown by 8.1%.
- Net income of $(13.5) million, a
decrease of $2.0 million from the
same period in the prior year, primarily due to higher financing
costs partially offset by total adjusted operating
expenses3 as well as lower stock-based compensation and
acquisition and restructuring costs.
- Adjusted EBITDA3 of $68.7
million, an increase of $4.3
million, or 7%, from the same period in the prior year.
- Total debt was $45.0 million
lower as of September 30, 2023,
compared with June 30, 2023, mainly
as a result of debt repayments made during the quarter.
Business Performance Improvement Plan
To enable Dye & Durham to deliver on its growth and leverage
ratio reduction objectives, the Company has targeted an improvement
plan of greater than $70 million in
free cash flow performance on an annualized basis, compared to the
first quarter of fiscal 2024 to be fully realized by the end of Q3
fiscal 2024. The Company has already actioned $40 million annualized in Q2 fiscal 2024, with
the full benefit of this to be realized in Q3 fiscal 2024. The
Company is implementing a series of measures to achieve this goal,
including a reduction in capital expenditures, product price
optimization, and further reducing acquisition, restructuring and
other costs, as well as lowering its current operating
costs3.
Quarterly Dividend
On October 30, 2023, the Board of
Directors declared a quarterly dividend of $0.01875 per share to shareholders of record on
November 8, 2023, payable on or about
November 15, 2023.
Conference Call Notification
The Company will hold a conference call to discuss its business
later today, Monday, October 30,
2023, at 5:00 p.m. ET hosted
by senior management. A question-and-answer session will follow the
corporate update.
DATE: Monday, October 30, 2023
TIME: 5:00 p.m. ET
RAPIDCONNECT: To instantly join the conference call by phone,
please use the following URL to easily register and be connected
into the conference call automatically:
https://emportal.ink/40hibVO
TRADITIONAL DIAL-IN NUMBER: (416) 764-8659 or (888) 664-6392
REFERENCE NUMBER: 70290380
TAPED REPLAY: (416) 764-8677 or (888) 390-0541
REPLAY CODE: 290380#
This call is being webcast and can be accessed by going to:
https://app.webinar.net/vW2jw3Mx8zk
1) As of September 30,
2023.
2) Excluding TM Group revenues.
3) Represents a non-IFRS measure. These measures are not
recognized measures under IFRS, do not have a standardized meaning
prescribed by IFRS and are therefore unlikely to be comparable to
similar measures presented by other companies. For the relevant
definition, see the "Non-IFRS Financial Measures" section of this
press release. Management believes non-IFRS measures, including
EBITDA, and Adjusted EBITDA, provide supplementary information to
IFRS measures used in assessing the performance of the business by
providing further understanding of the Company's results of
operations from management's perspective. Please see "Cautionary
Note Regarding Non-IFRS Measures", and "Select Information and
Reconciliation of Non-IFRS Measures in the Company's most recent
Management's Discussion and Analysis, which is available on the
Company's profile on SEDAR+ at www.sedarplus.ca, for further
details on certain non-IFRS measures, including the relevant
reconciliations of Adjusted EBITDA to its most directly comparable
IFRS measure, which information is incorporated by reference
herein.
About Dye & Durham
Dye & Durham Limited provides premier practice management
solutions empowering legal professionals every day, delivers vital
data insights to support critical corporate transactions and
enables the essential payments infrastructure trusted by government
and financial institutions. The company has operations in
Canada, the United Kingdom, Ireland, Australia and South
Africa.
Additional information can be found at www.dyedurham.com.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures.
These measures are not recognized measures under IFRS, do not have
a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies.
Rather, these measures are provided as additional information to
complement those IFRS measures by providing further understanding
of the Company's results of operations from management's
perspective and to discuss Dye & Durham's financial outlook.
The Company's definitions of non-IFRS measures may not be the same
as the definitions for such measures used by other companies in
their reporting. Non-IFRS measures have limitations as analytical
tools. Accordingly, these measures should not be considered in
isolation nor as a substitute for analysis of Dye & Durham's
financial information reported under IFRS. The Company uses
non-IFRS measures, including "EBITDA", and "Adjusted
EBITDA", (each as defined below), to provide investors with
supplemental measures of its operating performance and to eliminate
items that have less bearing on operating performance or operating
conditions and thus highlight trends in its core business that may
not otherwise be apparent when relying solely on IFRS financial
measures. The Company's management also uses non-IFRS financial
measures in order to facilitate operating performance comparisons
from period to period. The Company believes that securities
analysts, investors, and other interested parties frequently use
non-IFRS financial measures in the evaluation of issues.
Please see "Cautionary Note Regarding Non-IFRS Measures" and
"Select Information and Reconciliation of Non-IFRS Measures" in the
Company's most recent Management's Discussion and Analysis, which
is available on the Company's profile on SEDAR+ at
www.sedarplus.ca, for further details on certain non-IFRS measures,
including relevant reconciliations of each non-IFRS measure to its
most directly comparable IFRS measure, which information is
incorporated by reference herein.
EBITDA
EBITDA means net income (loss) before amortization and
depreciation expenses, finance and interest costs, and provision
for income taxes.
Adjusted EBITDA
Adjusted EBITDA adjusts EBITDA for stock-based compensation
expense, asset impairment charges, loss on settlement of loans and
borrowings, gains or losses from changes in fair value of
derivative financial instruments and contingent consideration
liabilities measured at fair value through profit or loss, specific
transaction related expenses related to acquisitions, IPO and
capital structure reorganization, operational restructuring costs,
restructuring costs includes impact to the full year of cost
synergies related to the reduction of employees in relation to
acquisitions.
Forward-looking Statements
This press release may contain forward-looking information and
forward-looking statements within the meaning of applicable
securities laws, which reflects the Company's current expectations
regarding future events, including with respect to the Company's
financial outlook and business strategy, including its debt
reduction strategy. In some cases, but not necessarily in all
cases, forward-looking statements can be identified by the use of
forward looking terminology such as "plans", "targets", "expects"
or "does not expect", "is expected", "an opportunity exists", "is
positioned", "estimates", "intends", "assumes", "anticipates" or
"does not anticipate" or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might", "will" or "will be taken", "occur" or
"be achieved". In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances contain forward-looking statements.
Forward-looking statements are not historical facts, nor guarantees
or assurances of future performance but instead represent
management's current beliefs, expectations, estimates and
projections regarding future events and operating performance.
Specifically, statements regarding Dye & Durham's NCIB,
expectations of future results, performance, prospects, the markets
in which we operate, or about any future intention with regard to
its business, acquisition strategies and debt reduction strategy
are forward-looking information. The foregoing demonstrates Dye
& Durham's objectives, which are not forecasts or estimates of
its financial position, but are based on the implementation of its
strategic goals, growth prospectus, and growth initiatives. The
forward-looking information is based on management's opinions,
estimates and assumptions, including, but not limited to: (i) Dye
& Durham's results of operations will continue as expected,
(ii) the Company will continue to effectively execute against its
key strategic growth priorities, (iii) the Company will continue to
retain and grow its existing customer base and market share, (iv)
the Company will be able to take advantage of future prospects and
opportunities, and realize on synergies, including with respect of
acquisitions, (v) there will be no changes in legislative or
regulatory matters that negatively impact the Company's business,
(vi) current tax laws will remain in effect and will not be
materially changed, (vii) economic conditions will remain
relatively stable throughout the period, (vii) the industries Dye
& Durham operates in will continue to grow consistent with past
experience, (ix) the seasonal trends in real estate transaction
volume will continue as expected, * the Company's expectations its
debt reduction strategy will be met and (xi) those
assumptions described under the heading "Caution Regarding
Forward-Looking Information" in the Company's Management's
Discussion and Analysis for the first quarter ended September 30, 2023. While these opinions,
estimates and assumptions are considered by Dye & Durham to be
appropriate and reasonable in the circumstances as of the date of
this press release, they are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, levels of activity, performance, or achievements to
be materially different from those expressed or implied by such
forward-looking information.
The forward looking information is subject to significant risks
including, without limitation: that the Company will be unable to
effectively execute against its key strategic growth priorities,
including in respect of acquisitions; the Company will be unable to
continue to retain and grow its existing customer base and market
share; risks related to the Company's business and financial
position; that Dye & Durham may not be able to accurately
predict its rate of growth and profitability; risks related to
economic and political uncertainty; income tax related risks; and
those risk factors discussed in greater detail under the "Risk
Factors" section of the Company's most recent annual information
form and under the heading "Risks and Uncertainties" in the
Company's most recent Management's Discussion and Analysis, which
are available under Dye & Durham's profile on SEDAR+ at
www.sedarplus.ca. Many of these risks are beyond the
Company's control.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information.
Although the Company bases these forward-looking statements on
assumptions that it believes are reasonable when made, the Company
cautions investors that forward-looking statements are not
guarantees of future performance and that its actual results of
operations, financial condition and liquidity and the development
of the industry in which it operates may differ materially from
those made in or suggested by the forward-looking statements
contained in this press release. In addition, even if the Company's
results of operations, financial condition and liquidity and the
development of the industry in which it operates are consistent
with the forward-looking statements contained in this press
release, those results of developments may not be indicative of
results or developments in subsequent periods.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. No
forward-looking statement is a guarantee of future results.
Accordingly, you should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents Dye & Durham's expectations as of the date specified
herein, and are subject to change after such date. However, the
Company disclaims any intention or obligation or undertaking to
update or revise any forward-looking information or to publicly
announce the results of any revisions to any of those statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. Comparisons of
results for current and any prior periods are not intended to
express any future trends or indications of future performance,
unless specifically expressed as such, and should only be viewed as
historical data.
All of the forward-looking information contained in this press
release is expressly qualified by the foregoing cautionary
statements.
SOURCE Dye & Durham Limited