DATA Communications Management Corp. Reports Q3 2025 Financial Results

THIRD QUARTER 2025 SUMMARY Revenues were $105.4 million in the second quarter vs. $108.7 million in Q3 2024 Adjusted EBITDA1 represented 11.7% of revenue vs. 11.6% in Q3 2024 Adjusted EBITDA was $12.3 million vs. $12.6 million in Q3 2024 SG&A expenses decreased to $18.2 million vs. $21.3 million in the prior year quarter Launch of AI-powered contentcloud.ai DAM platform advances DCM digital strategy Company repurchased 264,900 common shares during the third quarter Company declares quarterly dividend of $0.025 per common share Brampton, Ontario--(Newsfile Corp. - November 11, 2025) - DATA Communications Management Corp. (TSX: DCM) (OTCQX: DCMDF) ("DCM" or the "Company"), a leading Canadian provider of print and digital solutions that help simplify complex marketing communications and workflow, today reported third quarter 2025 financial results. MANAGEMENT COMMENTARY "While challenging market conditions and revenue headwinds persisted in the third quarter, we continue to deliver solid operating results and generate strong free cash flow enabling us to reduce debt and return capital shareholders," said Richard Kellam, President & CEO of DCM. "Revenues in the quarter were down 3.1% year over year, reflecting a trend we have seen throughout the year of clients delaying or scaling back projects in response to uncertainty about demand in their end markets as well as concerns about the impact of tariffs and ongoing labour disruptions at Canada Post. "We are addressing these challenges by maintaining our intense focus on new business development, diversifying our supply chain, and investing in digital innovation. In addition, we are taking a disciplined approach to managing overhead costs in the current environment, as reflected in this quarter's reduction in SG&A expenses. We are well positioned financially to navigate current challenges in our markets and to realize the benefit of these efforts as market conditions improve. At the same time, we have the flexibility to pursue strategic M&A opportunities to support our goal of delivering long-term value for both our clients and shareholders." added Kellam. DCM continues to be guided by four strategic priorities for 2025: Drive profitable organic growth Deliver a return on our new capital investments focused on enhancing our efficiency Continue to drive gross margin improvement through top line revenue growth and operating efficiencies Demonstrate agility and adaptability to effectively navigate an uncertain environment. OTHER BUSINESS HIGHLIGHTS Dividend Declaration On November 11, 2025, DCM's board of directors declared a third quarterly dividend of $0.025 per common share, payable on December 31, 2025, to shareholders of record at the close of business on December 17, 2025. This dividend is designated as an "eligible" dividend for the purpose of the Income Tax Act (Canada) and any similar provincial legislation. New Sustainability Milestone Achieved On October 14, 2025, DCM announced that it achieved a new milestone in its sustainability efforts with the planting of three million trees in certified reforestation projects through an innovative partnership with PrintReleaf. Through the program, DCM is able to offset 100% of the paper consumed in serving the printing needs of its clients. Launch of contentcloud.ai On October 9, 2025, DCM announced the launch of contentcloud.ai, the Company's enhanced Digital Asset Management ("DAM") platform powered by artificial intelligence ("AI"). contentcloud.ai builds on DCM's first-generation DAM platform, ASMBL, launched in 2024 with AI designed as part of its core experience to enable users to easily organize, find, and share content to work smarter, faster, and more efficiently. Q3 2025 EARNINGS CALL DETAILS The Company will host a conference call and webcast on Wednesday, November 12, 2025 at 9:00 a.m. EST Mr. Kellam and James Lorimer, CFO, will present the third quarter 2025 results followed by a live Q&A. Register for the webcast prior to the start of the event: Microsoft Virtual Events Powered by Teams All attendees must register for the webinar prior to the call. Please complete the phone field in the form at the above link (prior to the start of the event) if you wish to dial in. The Company's full results will be posted on its Investor Relations page and on SEDAR+. A video message from Mr. Kellam will also be posted on the Company's website. Footnotes: 1 Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted net income (loss), Adjusted net income (loss) as percentage of revenues, Net Debt to Adjusted EBITDA and Free cash flow are non-IFRS Accounting Standards measures. For a description of the composition of these and other non-IFRS Accounting Standards measures used in this press release, and a reconciliation to their most comparable IFRS Accounting Standards measure, where applicable, see the information under the heading "Non-IFRS Accounting Standards Measures", the information set forth on Table 2 and Table 3 herein, and our most recent Management Discussion & Analysis filed on SEDAR+. TABLE 1 The following table sets out selected historical consolidated financial information for the periods noted. For the periods ended September 30, 2025 and 2024 July 1 to Sept. 30, 2025 July 1 to Sept. 30, 2024 January 1 to September 30, 2025 January 1 to September 30, 2024 (in thousands of Canadian dollars, except share and per share amounts, unaudited) Revenues $ 105,371 $ 108,726 $ 342,840 $ 363,731         Gross profit 24,631 28,009 91,399 99,654         Gross profit, as a percentage of revenues 23.4 % 25.8  % 26.7 % 27.4  %         Selling, general and administrative expenses 18,219 21,313 61,549 67,921 As a percentage of revenues 17.3 % 19.6  % 18.0 % 18.7  %         Research & development expenses 1,105 1,117 3,441 3,755 As a percentage of revenues 1.0 % 1.0  % 1.0 % 1.0  %         Adjusted EBITDA 12,301 12,567 47,457 48,120 As a percentage of revenues 11.7 % 11.6  % 13.8 % 13.2  %         Net income for the period 1,058 (2,668 ) 9,886 2,871         Adjusted net income 111 (165 ) 9,205 8,755 As a percentage of revenues 0.1  % (0.2)  % 2.7 % % 2.4  %         Basic earnings per share $ 0.02 $ (0.05 ) $ 0.18 $ 0.05 Diluted earnings per share $ 0.02 $ (0.05 ) $ 0.17 $ 0.05 Adjusted net income per share, basic $ - $ - $ 0.17 $ 0.16 Adjusted net income per share, diluted $ - $ - $ 0.16 $ 0.15 Weighted average number of common shares outstanding, basic 55,221,802 55,308,952 55,282,446 55,192,969 Weighted average number of common shares outstanding, diluted 56,810,306 55,308,952 57,080,008 57,784,458   TABLE 2 The following table provides reconciliations of net income to EBITDA and of net income to Adjusted EBITDA for the periods noted. EBITDA and Adjusted EBITDA reconciliation For the periods ended September 30, 2025 and 2024 July 1 to September 30, 2025 July 1 to September 30, 2024 January 1 to September 30, 2025 January 1 to September 30, 2024 (in thousands of Canadian dollars, unaudited) Net income for the period $ 1,058 $ (2,668 ) $ 9,886 $ 2,871         Interest expense, net 5,031 5,273 15,299 16,192 Debt modification gain - - (867 ) - Amortization of transaction costs 111 140 382 420 Current income tax expense 1,191 647 4,707 2,005 Deferred income tax recovery (818 ) (1,158 ) (2,088 ) (1,374 ) Depreciation of property, plant, and equipment 1,665 1,832 5,179 5,138 Amortization of intangible assets 328 482 1,037 1,516 Depreciation of right-of-use-assets 5,001 4,674 14,832 13,488 EBITDA $ 13,567 $ 9,222 $ 48,367 $ 40,256 Acquisition and integration costs - 2,077 - 2,603 Restructuring expenses 255 1,160 313 3,346 Net fair value losses on financial liabilities at fair value through profit or loss (1,521 ) 108 (1,223 ) 1,915 Adjusted EBITDA $ 12,301 $ 12,567 $ 47,457 $ 48,120   TABLE 3 The following table provides reconciliations of net income (loss) to Adjusted net income and a presentation of Adjusted net income per share for the periods noted. Adjusted net income reconciliation For the periods ended September 30, 2025 and 2024 July 1 to September 30, 2025 July 1 to September 30, 2024 January 1 to September 30, 2025 January 1 to September 30, 2024 (in thousands of Canadian dollars, except share and per share amounts, unaudited) Net income for the period $ 1,058 $ (2,668 ) $ 9,886 $ 2,871         Restructuring expenses 255 1,160 313 3,346 Acquisition and integration costs - 2,077 - 2,603 Net fair value losses (gains) on financial liabilities at fair value through profit or loss (1,521 ) 108 (1,223 ) 1,915 Tax effect of the above adjustments 319 (842 ) 229 (1,980 ) Adjusted net income $ 111 $ (165 ) $ 9,205 $ 8,755   About DATA Communications Management Corp. DCM is a leading Canadian tech-enabled provider of print and digital solutions that help simplify complex marketing communications and operations workflow. DCM serves over 2,500 clients including 70 of the 100 largest Canadian corporations and leading government agencies. Our core strength lies in delivering individualized services to our clients that simplify their communications, including customized printing, highly personalized marketing communications, campaign management, digital signage, and digital asset management. From omnichannel marketing campaigns to large-scale print and digital workflows, our goal is to make complex tasks surprisingly simple, allowing our clients to focus on what they do best. Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on SEDAR+ at www.sedarplus.ca. For further information, contact Mr. Richard Kellam Mr. James E. Lorimer President and Chief Executive Officer Chief Financial Officer     DATA Communications Management Corp. DATA Communications Management Corp. Tel: (905) 791-3151 Tel: (905) 791-3151 [email protected]   FORWARD-LOOKING STATEMENTS Certain statements in this press release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DCM, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as "may," "would," "could," "will," "expect," "anticipate," "estimate," "believe," "intend," "plan," and other similar expressions are intended to identify forward-looking statements. These statements reflect DCM's current views regarding future events and operating performance, are based on information currently available to DCM, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties, and assumptions. They should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DCM to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements. We caution readers of this press release not to place undue reliance on our forward-looking statements since a number of factors could cause actual future results, conditions, actions, or events to differ materially from the targets, expectations, estimates or intentions expressed in these forward-looking statements. The principal factors, assumptions and risks that DCM made or took into account in the preparation of these forward-looking statements and which could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are described in further detail in our most recent annual and interim Management Discussion and Analysis filed on SEDAR+, and include but are not limited to the following: industry conditions are influenced by numerous factors over which the Company has no control, including: declines in print consumption; labour disruptions at suppliers and customers, including Canada Post; the impact of tariffs and responses thereto (including by governments, trade partners and customers), which may include, without limitation, retaliatory tariffs, export taxes, restrictions on exports to the U.S. or other measures, increases in our input costs, and the effect of governmental regulations and policies in general; our ability to achieve and meet our revenue, profitability, free cash flow and debt reduction targets for 2025 and in the future; while we have received consents from our lenders for the declaration and payment of the special dividend and regular recurring dividend, including the exclusion of the special dividend from our fixed charge coverage ratios, our financial leverage may increase, and there is no guarantee that we will pay such dividends in the future; and, our ability to comply with our financial and other covenants under our credit facilities, which may preclude us from paying future dividends if our outlook and future financial liquidity changes. Additional factors are discussed elsewhere in this press release and under the headings "Liquidity and capital resources" and "Risks and Uncertainties" in DCM's Management Discussion and Analysis and in DCM's other publicly available disclosure documents, as filed by DCM on SEDAR+. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Unless required by applicable securities law, DCM does not intend and does not assume any obligation to update these forward-looking statements. NON-IFRS ACCOUNTING STANDARDS MEASURES NON-IFRS ACCOUNTING STANDARDS AND OTHER FINANCIAL MEASURES This press release includes certain non-IFRS Accounting Standards measures, ratios and other financial measures as supplementary information. This supplementary information does not represent earnings measures recognized by IFRS Accounting Standards and does not have any standardized meanings prescribed by IFRS Accounting Standards. Therefore, these non-IFRS Accounting Standards measures, ratios and other financial measures are unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that this supplementary information should not be construed as alternatives to net income (loss) determined in accordance with IFRS Accounting Standards as an indicator of DCM's performance. Definitions of such supplementary information, together with a reconciliation of net income (loss) to such supplementary financial measures, can be found in our most recent annual and interim Management Discussion and Analysis and filed on SEDAR+ at www.sedarplus.ca. Condensed interim consolidated statements of financial position (in thousands of Canadian dollars, unaudited) September 30, 2025 December 31, 2024 $ $ Assets Current assets Cash and cash equivalents 3,667 6,773 Trade receivables 97,574 103,445 Inventories 21,525 23,843 Prepaid expenses and other current assets 4,573 5,989 Income taxes receivable 624 3,432 $ 127,963 $ 143,482 Non-current assets     Other non-current assets 2,210 9,104 Deferred income tax assets 8,420 8,224 Property, plant, and equipment 32,987 34,812 Right-of-use assets 163,499 162,510 Pension assets 4,517 3,142 Intangible assets 7,366 8,282 Goodwill 22,747 22,747 $ 369,709 $ 392,303     Liabilities     Current liabilities     Bank overdraft - 880 Trade payables and accrued liabilities 45,291 59,890 Current portion of credit facilities 8,714 15,175 Current portion of lease liabilities 11,943 10,525 Provisions 2,741 8,016 Deferred revenue 3,820 6,199 $ 72,509 $ 100,685 Non-current liabilities     Provisions 271 1,279 Credit facilities 73,575 68,515 Lease liabilities 166,491 158,603 Deferred income tax liabilities - 60 Pension obligations 12,676 18,354 Other post-employment benefit plans 1,257 1,409 Asset retirement obligation 3,522 3,438 $ 330,301 $ 352,343     Equity     Shareholders' equity     Shares 284,119 284,592 Warrants - 219 Contributed surplus 3,219 3,078 Translation Reserve 247 307 Deficit (248,177 ) (248,236 ) $ 39,408 $ 39,960 $ 369,709 $ 392,303 Condensed interim consolidated statements of operations (in thousands of Canadian dollars, except per share amounts, unaudited) For the three months ended September 30, 2025 For the three months ended September 30, 2024 For the nine months ended September 30, 2025 For the nine months ended September 30, 2024 Revenues $ 105,371 $  108,726 $  342,840 $  363,731 Cost of revenues 80,740 80,717 251,441 264,077 Gross profit 24,631 28,009 91,399 99,654         Expenses         Selling, commissions and expenses 9,346 9,930 29,955 30,972 General and administration expenses 8,873 11,383 31,594 36,949 Research & development expenses 1,105 1,117 3,441 3,755 Restructuring expenses 255 1,160 313 3,346 Acquisition and integration costs - 2,077 - 2,603 Net fair value losses on financial liabilities at fair value through profit or loss (1,521 ) 108 (1,223 ) 1,915 18,058 25,775 64,080 79,540 Income before finance costs and income taxes 6,573 2,234 27,319 20,114         Finance costs         Interest expense on long term debt and pensions, net 1,743 2,108 5,451 6,913 Interest expense on lease liabilities 3,288 3,165 9,848 9,279 Amortization of transaction costs 111 140 382 420 Debt modification gain - - (867 ) - 5,142 5,413 14,814 16,612         Income before income taxes 1,431 (3,179 ) 12,505 3,502         Income tax expense         Current 1,191 647 4,707 2,005 Deferred (818 ) (1,158 ) (2,088 ) (1,374 ) 373 (511 ) 2,619 631         Net income for the period $ 1,058 $ (2,668 ) $ 9,886 $ 2,871         Other comprehensive income:         Foreign currency translation 55 (19 ) (60 ) 25 55 (19 ) (60 ) 25 Items that will not be reclassified to net income         Re-measurements of pension and other post-employment benefit obligations  5,780 625 7,211 9,393 Taxes related to pension and other post-employment benefit adjustment above (1,469 ) (160 ) (1,832 ) (2,408 ) 4,311 465 5,379 6,985         Other comprehensive income for the period, net of tax $ 4,366 $ 446 $ 5,319 $ 7,010 Comprehensive income for the period $ 5,424 $ (2,222 ) $ 15,205 $ 9,881         Basic earnings per share 0.02 -0.05 0.18 0.05 Diluted earnings per share 0.02 -0.05 0.17 0.05 Condensed interim consolidated statements of cash flows (in thousands of Canadian dollars, unaudited) For the nine months ended September 30, 2025 For the nine months ended September 30, 2024 $ $ Cash provided by Operating activities Net income for the period $  9,886 $  2,871 Items not affecting cash     Depreciation of property, plant, and equipment 5,179 5,138 Amortization of intangible assets 1,037 1,516 Depreciation of right-of-use-assets 14,832 13,488 Share-based compensation expense 89 390 Net fair value losses on financial liabilities at fair value through profit or loss (1,223 ) 1,915 Pension expense 1,113 1,415 Gain on disposal of sale and leaseback - (11 ) Loss on disposal of property, plant and equipment - (54 ) Provisions 313 3,346 Debt modification gain (867 ) - Amortization of transaction costs 382 421 Accretion of asset retirement obligations 84 (28 ) Other post-employment benefit plan expense 130 447 Right-of-use assets impairment - 97 Income tax expense 2,619 631 Changes in non cash working capital (7,082 ) 3,107 Contributions made to pension plans (955 ) (960 ) Contributions made to other post-employment benefit plans (282 ) (177 ) Provisions paid (6,596 ) (8,804 ) Income taxes paid (1,899 ) (2,898 ) Total cash generated from operating activities 16,760 21,850     Investing activities     Proceeds on sale and leaseback transaction 6,694 10,218 Purchase of property, plant, and equipment (3,343 ) (9,709 ) Purchase of intangible assets (121 ) (551 ) Purchase of non-current assets (143 ) (8,013 ) Proceeds on disposal of property, plant, and equipment - 440 Total cash provided by (used in) investing activities 3,087 (7,615 )     Financing activities     Exercise of options - 337 Proceeds from credit facilities 60,733 58,145 Repayment of credit facilities (61,232 ) (73,905 ) Decrease in bank overdrafts (880 ) (1,564 ) Transaction costs (417 ) - Dividends paid (15,206 ) - Principal portion of lease payments (5,246 ) (6,055 ) Repurchases of shares (640 ) - Total cash (used in) financing activities (22,888 ) (23,042 )     Change in cash and cash equivalents during the period (3,041 ) (8,807 ) Cash and cash equivalents - beginning of period 6,773 17,652 Effects of foreign exchange on cash balances (65 ) 33 Cash and cash equivalents - end of period $ 3,667 $ 8,878   To view the source version of this press release, please visit https://www.newsfilecorp.com/release/274011