Ciscom loses $592,000 in first half 2025

Executive Summary

• Ciscom Corp. reported interim unaudited consolidated financial statements for the six months ended June 30, 2025, revealing a significant decline in revenue due to the Canada Post Corp. (CPC) labour dispute, a client bankruptcy, and U.S. tariff uncertainties.
• Despite a 37.2% drop in sales, the company maintained positive cash-based operating profit (EBITDA) of $809,000 by reducing operating expenses by 21.1% year-over-year.
• The company reported a net loss of $592,000, primarily driven by $657,000 in one-time non-recurring charges, including an account receivable impairment and restructuring costs.

Key Details

• Revenue: Sales decreased to $10.85 million for the six months ended June 30, 2025, compared to $17.27 million in the same period of 2024 (a decrease of $6.42 million or 37.2%).
• Gross Profit: Gross profit was $2.68 million, down from $3.17 million in the prior year period (a reduction of $484,000 or 15.3%).
• Operating Expenses: Cash-based operating expenses were reduced from $2.38 million in H1 2024 to $1.88 million in H1 2025, representing a cost reduction of $504,000 (21.1%). Most savings were related to compensation and professional fees.
• EBITDA: Cash-based operating profit (EBITDA) from continuing operations was $809,000, an improvement of $28,000 compared to $781,000 in the same period of 2024.
• Net Loss: Reported a net loss of $592,000 for the six-month period, compared to a net loss of $186,000 in 2024.
• Non-Recurring Charges: The increase in net loss is attributed to one-time non-recurring charges totaling $657,000 in 2025 (nil in 2024), which included an account receivable impairment charge for work performed in January 2025 due to a significant client seeking bankruptcy protection under the Companies' Creditors Arrangement Act (CCAA).
• Restructuring: One-time restructuring charges were incurred linked to downsizing the workforce.
• Cash Flow: Operations generated positive cash flows of $679,000 in the six-month period ended June 30, 2025, compared to $894,000 in the same period of 2024.
• Non-Cash Expenses: Significant non-cash expenses totaled $650,000 in H1 2025 (down from $783,000 in H1 2024), including share-based compensation, intangible asset amortization, and deferred charges.
• Operational Challenges: The first half of 2025 was impacted by the CPC labour dispute (disrupting direct mail distribution and causing client cancellations), a significant client's CCAA filing, and the uncertain economic climate caused by unprecedented U.S. tariffs.

Notable Quotes

• "Following a strong growth year in 2024 that was dampened by the CPC labour dispute and a client's CCAA filing, we entered 2025 fully aware of the challenges ahead... We acted swiftly to restructure our cost base and took one-time charges which impacted earnings. This said, the team led by Dave Mathews and Sheri Rogers is active signing new clients and our revenue line is shoring up." — Michel Pepin, President, CEO, and Director.