- Contracted annual recurring revenue was 18% of total
revenue, more than doubling year-over-year
- Percentage of revenue exposed to real estate transactions
reduced to 50% globally and 26% from Canada
- Operating expense reductions significantly exceeding target
of 10% compared to the same period in FY22
- Substantial issuer bid offers to buy back up to $15 million of outstanding common shares
TORONTO, May 10, 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 ("Q3
FY23") ended March 31, 2023.
"After a challenging start to the year, we are seeing concrete
signs that seasonal real estate transaction volumes are starting to
accelerate and recover. Given our strong and sustainable earnings
and cashflow profile, as well as our organic and M&A growth
pipeline, we believe our stock is significantly undervalued and
represents one of the best opportunities in the market. The
$15 million substantial issuer bid
reflects our confidence in our business and while we don't
typically provide quarterly guidance, we have decided to offer it
for next quarter so that investors can make a fully informed
decision about whether to participate. For the fourth quarter of
fiscal 2023, we expect our adjusted EBITDA1 to be in the
range of $65-70 million," said Dye
& Durham CEO Matt
Proud. "During the third quarter, we continued to grow,
optimize and diversify our global business, despite a difficult
operating environment. As a result of our strong, long-term client
relationships and a refreshed sales strategy, contracted annual
recurring revenue reached 18% of total revenue this quarter, more
than double from last year, reducing our exposure to depressed real
estate transaction levels. At the same time, we cut our cost base
by an annualized $42 million, or 19%,
significantly exceeding our initial target of 10% and positioning
our business on an even stronger footing going forward."
Third Quarter Fiscal 2023 Highlights
- As of March 31, 2023, the Company
has achieved Operating Expenses1 savings of $42 million, or 19% on an annualized basis
compared to Q3 FY22, exceeding its targeted 10% cost reduction plan
announced in November 2022.
- The Company has commenced a substantial issuer bid under which
the Company will offer to repurchase for cancellation up to
$15 million of its outstanding common
shares.
- Revenue of $104.1 million, a
decrease of $18.8 million, or 15%,
from the same period in the prior year.
- Net loss of $(35.2) million, a
decrease of $28.1 million, from the
same period in the prior year.
- Adjusted EBITDA1 of $56.1
million, a decrease of $10.7
million, or 16%, from the same period in the prior
year.
Fourth Quarter Fiscal 2023 Outlook
Dye & Durham provided its outlook for Revenue and Adjusted
EBITDA for the three-month period ended June
30, 2023, which are anticipated to be in the following
ranges:
- Revenue of $115 - $120 million; and
- Adjusted EBITDA1 of $65 - $70
million.
Quarterly Dividend
The Board of Directors declared a quarterly dividend of
[$0.01875] per share to shareholders
of record on May 17, 2023, payable on
or about May 24, 2023.
Substantial Issuer Bid
This afternoon, the Company announced that the board of
directors has approved the commencement of a substantial issuer bid
(the "Offer") under which the Company will offer to
repurchase for cancellation up to $15,000,000 of its outstanding common shares
("Common Shares"). The purchase price per Common Share will
be determined by the Company in accordance with the terms of the
Offer, but will be no less than $17.00 and not more than $20.00.
The Offer is expected to proceed by way of a modified Dutch
auction, which will allow shareholders who choose to participate in
the Offer to select the price, within a price range, to tender
their Common Shares. Upon expiry of the Offer, the Company will
determine the lowest purchase price within the range that will
allow the Company to purchase the maximum number of Common Shares
properly tendered to the Offer, having an aggregate purchase price
not exceeding $15,000,000. The
Company expects to announce the terms of the Offer and commence the
Offer on May 12, 2023.
The Offer will not be conditional upon any minimum number of
Common Shares being tendered. The Offer will, however, be subject
to other conditions and the Company will reserve the right, subject
to applicable laws, to withdraw or amend the Offer, if, at any time
prior to the payment of deposited Common Shares, certain events
occur.
The Company has engaged Canaccord Genuity Inc. as dealer manager
for the Offer and TSX Trust Company to act as the depositary for
the Offer.
The formal offer to purchase and issuer bid circular, letter of
transmittal and notice of guaranteed delivery (collectively, the
"Offer Documents") containing the terms and conditions of
the Offer and instructions for tendering Common Shares will be
filed with the applicable securities regulators and mailed to
registered shareholders. The Offer Documents will be available
under the Company's SEDAR profile at www.sedar.com.
Neither the Company nor its board of directors makes any
recommendation to shareholders as to whether to tender or refrain
from tendering any or all of their Common Shares to the Offer. This
press release is neither an offer to purchase nor a solicitation of
an offer to sell any Common Shares. The solicitation and the offer
to purchase Common Shares by the Company is being made only
pursuant to the Offer Documents. Shareholders of the Company are
urged to read the Offer Documents carefully and to consult with
their own financial, tax and legal advisors prior to making any
decision with respect to the Offer.
Conference Call Notification
The Company will hold a conference call to discuss its business
later today, Wednesday, May 10, 2023,
at 4:30 p.m. ET hosted by senior
management. A question-and-answer session will follow the corporate
update.
DATE: Wednesday, May 10, 2023
TIME: 4:30 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/3LbJyt6
TRADITIONAL DIAL-IN NUMBER: (416) 764-8659 or (888) 664-6392
REFERENCE NUMBER: 11745439
TAPED REPLAY: (416) 764-8677 or (888) 390-0541
REPLAY CODE: 745439#
This call is being webcast and can be accessed by going to:
https://app.webinar.net/4eqRJQrj7dm
1)
|
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 Operating Expense, 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", "Select Information and
Reconciliation of Non-IFRS Measures", and "Outlook" in the
Company's most recent Management's Discussion and Analysis, which
is available on the Company's profile on SEDAR at www.sedar.com,
for further details on certain non-IFRS measures, including the
relevant reconciliations of Adjusted EBITDA to its most directly
comparable IFRS measure, and for a comparison of the Company's
fourth quarter fiscal 2023 outlook for Revenue and Adjusted EBITDA
to the Q3 FY23 results, including an explanation of the quarter
over quarter differences, which information is incorporated by
reference herein.
|
About Dye & Durham
Dye & Durham Limited provides premiere 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, and Australia.
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 "Operating Expenses", "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.sedar.com,
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.
Operating Expenses
Operating Expenses means the sum of direct costs, technology and
operations, general and administrative, and sales and marketing
expenses.
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. 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 forecast
on Revenue and Adjusted EBITDA, expectations of future results,
performance, prospects, the markets in which we operate, the
substantial issuer bid, or about the any future intention with
regard to its business and acquisition strategies are considered
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 prospects, and growth initiatives. The
forward-looking information, including management's assessments of,
and outlook for, Revenue and Adjusted EBITDA, are 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, and (ix) the seasonal trends in
real estate transaction volume will continue as expected, * the
Company's expectations for increases to the average rate per user
on its platforms, contractual revenues, and incremental earnings
from its latest asset-based acquisition 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 third quarter ended March 31, 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, including the achievement of
target Adjusted EBITDA set out above, 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.sedar.com. 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