DATA Communications Management Corp. Reports Q2 2025 Financial Results

DCM DELIVERS STEADY OPERATING PERFORMANCE AMID CHALLENGING MARKET CONDITIONS Revenues were $113.8 million in the second quarter vs. $125.8 million in Q2 2024 Gross profit as a percentage of revenues of 26.8% compared to 27.3% in Q2 2024 SG&A expenses decreased to $19.9 million vs. $22.5 million in the prior year quarter Adjusted EBITDA1 represented 14.6% of revenue vs. 13.4% in Q2 2024 Adjusted EBITDA was $16.6 million vs. $16.9 million in Q2 2024 Pipeline of new business opportunities continues to grow Quarterly dividend of $0.025 per common share declared, payable on September 24, 2025 to shareholders of record as of September 10, 2025 Company Website: https://datacm.com BRAMPTON, Ontario -- (Business Wire) 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 second quarter 2025 financial results. MANAGEMENT COMMENTARY “Despite challenging market conditions and stronger than expected revenue headwinds in the second quarter, we continued to deliver solid operating performance with essentially flat adjusted EBITDA and higher adjusted EBITDA margin compared to last year,” said Richard Kellam, President & CEO of DCM. “Uncertainty about trade policies, including tariffs, the direction of the economy, and the ongoing labour issues at Canada Post have driven continued market headwinds. These factors have negatively impacted business confidence, resulting in client budget reductions, delayed orders, and inventory drawdowns. As such, revenues in the quarter were down 9.5% compared to last year. Given this ongoing uncertainty, the Company has decided to withdraw all financial guidance until there is greater clarity on these external challenges.” “We are well-positioned financially to manage through the current market conditions with our strong cash flow, a disciplined focus on maintaining margins, and managing overhead costs. We continue to be encouraged by our strong and growing pipeline of new business opportunities, the highest level of which we’ve seen in years. We expect to more fully realize these efforts as market conditions improve. Additionally, we have the flexibility to pursue M&A opportunities to strengthen our product and service offerings and create more value for our clients,” added Kellam. DCM continues to be guided by four strategic priorities for 2025: Maintain our focus on profitable organic growth Deliver a return on our new capital investments Continue to drive gross margin improvement through operating efficiencies Demonstrate agility and adaptability to effectively navigate an uncertain environment. OTHER BUSINESS HIGHLIGHTS Dividend Declaration On August 6, 2025, DCM’s board of directors declared a quarterly dividend of $0.025 per common share, payable on September 24, 2025, to shareholders of record at the close of business on September 10, 2025. This dividend is designated as an “eligible” dividend for the purpose of the Income Tax Act (Canada) and any similar provincial legislation. Normal Course Issuer Bid Commenced On June 10, 2025, DCM announced that the Toronto Stock Exchange (the “TSX”) accepted a notice filed by the Company of its intention to make a normal course issuer bid with respect to its outstanding common shares (the “Common Shares”). The notice provided that the Company may, during the 12 month period commencing June 12, 2025 and ending no later than June 11, 2026, purchase, through the facilities of the TSX, up to 4,220,210 Common Shares, being approximately 10% of the “public float” (as such term is defined in the policies of the TSX) of such Common Shares as at May 31, 2025. In June 2025, the Company repurchased and cancelled 79,400 common shares for total consideration of $0.1 million, including transaction costs. Amended Senior Revolving Credit Facility On June 2, 2025, DCM entered into a fourth amended and restated credit agreement (the “Bank Credit Facility”) with a Canadian chartered bank, extending the maturity date of its senior secured revolving credit facility to May 31, 2028. The Bank Credit Facility also included an expanded leasing facility to finance future equipment purchases along with a number of reporting enhancements. Amended Senior Term Credit Facility On July 17, 2025, a third amended and restated credit agreement with Fiera Private Debt ("FPD") was entered into to update certain definitions and incorporate qualitative changes, with no impact to the financial terms of the FPD Facilities. Q2 2025 EARNINGS CALL DETAILS The Company will host a conference call and webcast on Thursday, August 7, 2025 at 9:00 a.m. EST Mr. Kellam and James Lorimer, CFO, will present the second 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 1The following table sets out selected historical consolidated financial information for the periods noted. For the periods ended June 30, 2025 and 2024 April 1 to June 30, 2025 April 1 to June 30, 2024 January 1 to June 30, 2025 January 1 to June 30, 2024 (in thousands of Canadian dollars, except share and per share amounts, unaudited)           Revenues $ 113,794   $ 125,751   $ 237,469   $ 255,005             Gross profit   30,508     34,334     66,768     71,645             Gross profit, as a percentage of revenues   26.8 %   27.3 %   28.1 %   28.1 %           Selling, general and administrative expenses   19,871     22,473     43,330     46,608   As a percentage of revenues   17.5 %   17.9 %   18.2 %   18.3 %           Research & development expenses   1,216     1,391     2,336     2,638   As a percentage of revenues   1.1 %   1.1 %   1.0 %   1.0 %           Adjusted EBITDA   16,568     16,888     35,156     35,553   As a percentage of revenues   14.6 %   13.4 %   14.8 %   13.9 %           Net income for the period   3,714     4,064     8,828     5,539             Adjusted net income   3,891     4,017     9,094     8,920   As a percentage of revenues   3.4 %   3.2 %   3.8 %   3.5 %           Basic earnings per share $ 0.07   $ 0.07   $ 0.16   $ 0.10   Diluted earnings per share $ 0.06   $ 0.07   $ 0.15   $ 0.10   Adjusted net income per share, basic $ 0.07   $ 0.07   $ 0.16   $ 0.16   Adjusted net income per share, diluted $ 0.07   $ 0.07   $ 0.16   $ 0.15   Weighted average number of common shares outstanding, basic   55,317,543     55,245,796     55,313,271     55,134,340   Weighted average number of common shares outstanding, diluted   57,156,673     57,835,179     57,198,419     57,746,066   TABLE 2The 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 June 30, 2025 and 2024 April 1 to June 30, 2025 April 1 to June 30, 2024 January 1 to June 30, 2025 January 1 to June 30, 2024 (in thousands of Canadian dollars, unaudited) Net income for the period $ 3,714   $ 4,064   $ 8,828   $ 5,539             Interest expense, net   5,120     5,366     10,268     10,919   Debt modification gain   (867 )   —     (867 )   —   Amortization of transaction costs   131     140     271     280   Current income tax expense   1,445     16     3,516     1,358   Deferred income tax recovery   (359 )   947     (1,270 )   (216 ) Depreciation of property, plant, and equipment   1,792     1,783     3,514     3,306   Amortization of intangible assets   326     306     709     1,034   Depreciation of right-of-use-assets   5,029     4,329     9,831     8,814   EBITDA $ 16,331   $ 16,951   $ 34,800   $ 31,034   Acquisition and integration costs   —     243     —     526   Restructuring expenses   58     1,101     58     2,186   Net fair value losses (gains) on financial liabilities at fair value through profit or loss   179     (1,407 )   298     1,807   Adjusted EBITDA $ 16,568   $ 16,888   $ 35,156   $ 35,553   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 June 30, 2025 and 2024 April 1 to June 30, 2025 April 1 to June 30, 2024 January 1 to June 30, 2025 January 1 to June 30, 2024 (in thousands of Canadian dollars, except share and per share amounts, unaudited)           Net income for the period $ 3,714   $ 4,064   $ 8,828   $ 5,539             Restructuring expenses   58     1,101     58     2,186   Acquisition and integration costs   —     243     —     526   Net fair value losses (gains) on financial liabilities at fair value through profit or loss   179     (1,407 )   298     1,807   Tax effect of the above adjustments   (60 )   16     (90 )   (1,138 ) Adjusted net income $ 3,891   $ 4,017   $ 9,094   $ 8,920   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. 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) June 30, 2025 December 31, 2024   $ $       Assets     Current assets     Cash and cash equivalents   2,887     6,773   Trade receivables   100,697     103,445   Inventories   24,987     23,843   Prepaid expenses and other current assets   3,755     5,989   Income taxes receivable   1,364     3,432     $ 133,690   $ 143,482   Non-current assets     Other non-current assets   2,201     9,104   Deferred income tax assets   9,071     8,224   Property, plant, and equipment   33,845     34,812   Right-of-use assets   164,159     162,510   Pension assets   3,408     3,142   Intangible assets   7,596     8,282   Goodwill   22,747     22,747     $ 376,717   $ 392,303         Liabilities     Current liabilities     Bank overdraft   —     880   Trade payables and accrued liabilities   46,503     59,890   Current portion of credit facilities   8,714     15,175   Current portion of lease liabilities   12,263     10,525   Provisions   3,413     8,016   Deferred revenue   4,564     6,199     $ 75,457   $ 100,685   Non-current liabilities     Provisions   480     1,279   Credit facilities   79,642     68,515   Lease liabilities   163,295     158,603   Deferred income tax liabilities   —     60   Pension obligations   17,256     18,354   Other post-employment benefit plans   1,307     1,409   Asset retirement obligation   3,492     3,438     $ 340,929   $ 352,343         Equity     Shareholders’ equity     Shares   284,546     284,592   Warrants   —     219   Contributed surplus   3,219     3,078   Translation Reserve   192     307   Deficit   (252,169 )   (248,236 )   $ 35,788   $ 39,960     $ 376,717   $ 392,303     Condensed interim consolidated statements of operations (in thousands of Canadian dollars, except per share amounts, unaudited) For the three months ended June 30, 2025 For the three months ended June 30, 2024 For the six months ended June 30, 2025 For the six months ended June 30, 2024           Revenues $ 113,794   $ 125,751   $ 237,469   $ 255,005             Cost of revenues   83,286     91,417     170,701     183,360   Gross profit   30,508     34,334     66,768     71,645             Expenses         Selling, commissions and expenses   9,649     10,178     20,609     21,042   General and administration expenses   10,222     12,295     22,721     25,566   Research & development expenses   1,216     1,391     2,336     2,638   Restructuring expenses   58     1,101     58     2,186   Acquisition and integration costs   —     243     —     526   Net fair value losses (gains) on financial liabilities at fair value through profit or loss   179     (1,407 )   298     1,807       21,324     23,801     46,022     53,765   Income before finance costs and income taxes   9,184     10,533     20,746     17,880             Finance costs         Interest expense on long term debt and pensions, net   1,837     2,307     3,708     4,805   Interest expense on lease liabilities   3,283     3,059     6,560     6,114   Amortization of transaction costs   131     140     271     280   Debt modification gain   (867 )   —     (867 )   —       4,384     5,506     9,672     11,199             Income before income taxes   4,800     5,027     11,074     6,681             Income tax expense         Current   1,445     16     3,516     1,358   Deferred   (359 )   947     (1,270 )   (216 )     1,086     963     2,246     1,142             Net income for the period $ 3,714   $ 4,064   $ 8,828   $ 5,539             Other comprehensive income:         Foreign currency translation   (110 )   14     (115 )   44       (110 )   14     (115 )   44   Items that will not be reclassified to net income         Re-measurements of pension and other post-employment benefit obligations s   1,816     1,755     1,431     8,768   Taxes related to pension and other post-employment benefit adjustment above   (461 )   (406 )   (363 )   (2,248 )     1,355     1,349     1,068     6,520             Other comprehensive income for the period, net of tax $ 1,245   $ 1,363   $ 953   $ 6,564             Comprehensive income for the period $ 4,959   $ 5,427   $ 9,781   $ 12,103             Basic earnings per share   0.07     0.07     0.16     0.10   Diluted earnings per share   0.06     0.07     0.15     0.10     Condensed interim consolidated statements of cash flows (in thousands of Canadian dollars, unaudited) For the six months ended June 30, 2025   For the six months ended June 30, 2024   $   $         Cash provided by               Operating activities       Net income for the period $ 8,828     $ 5,539   Items not affecting cash       Depreciation of property, plant, and equipment   3,514       3,306   Amortization of intangible assets   709       1,034   Depreciation of right-of-use-assets   9,831       8,814   Share-based compensation expense   89       321   Net fair value losses on financial liabilities at fair value through profit or loss   298       1,807   Pension expense   742       943   Gain on disposal of sale and leaseback   —       (11 ) Loss on disposal of property, plant and equipment   —       149   Provisions   58       2,186   Debt modification gain   (867 )     —   Amortization of transaction costs   271       280   Accretion of asset retirement obligations   54       65   Other post-employment benefit plan expense   87       298   Right-of-use assets impairment   —       97   Income tax expense   2,246       1,142   Changes in non cash working capital   (12,173 )     764   Contributions made to pension plans   (675 )     (604 ) Contributions made to other post-employment benefit plans   (189 )     (115 ) Provisions paid   (5,460 )     (6,526 ) Income taxes paid   (1,448 )     (1,599 ) Total cash generated from operating activities   5,915       17,890           Investing activities       Proceeds on sale and leaseback transaction   6,694       8,661   Purchase of property, plant, and equipment   (2,536 )     (6,989 ) Purchase of intangible assets   (23 )     —   Purchase of non-current assets   (143 )     (6,499 ) Proceeds on disposal of property, plant, and equipment   —       431   Total cash provided by (used in) investing activities   3,992       (4,396 )         Financing activities       Exercise of options   —       337   Proceeds from credit facilities   53,733       30,185   Repayment of credit facilities   (48,054 )     (43,726 ) Decrease in bank overdrafts   (880 )     (1,564 ) Transaction costs   (417 )     —   Dividends paid   (13,829 )     —   Principal portion of lease payments   (4,005 )     (3,500 ) Repurchases of shares   (213 )     —   Total cash (used in) financing activities   (13,665 )     (18,268 )         Change in cash and cash equivalents during the period   (3,758 )     (4,774 ) Cash and cash equivalents – beginning of period   6,773       17,652   Effects of foreign exchange on cash balances   (128 )     51   Cash and cash equivalents – end of period $ 2,887     $ 12,929     View source version on businesswire.com: https://www.businesswire.com/news/home/20250806631729/en/ Contacts: Mr. Richard Kellam President and 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 [email protected] Source: DATA Communications Management Corp.