- Revenue up 16% to ~$107
million year-over-year, taking into consideration the TM
Group divestiture
- Adjusted EBITDA of ~$60
million
- $185 million Substantial
Issuer Bid to repurchase all remaining 3.75% convertible senior
unsecured debentures due March 1,
2026
TORONTO, May 14, 2024
/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 and nine months ended
March 31, 2024.
"Our business continued its strong performance this quarter with
a focus on predictable revenue streams, evident in the steady
growth of our annual recurring revenue, now standing at 30% of
revenue," said Dye & Durham CEO, Matthew Proud. "The roll-out of our Global Unity
Platform in the UK is progressing smoothly, reinforcing our
commitment to providing a comprehensive solution for our customers.
We successfully closed on US$905
million of refinancing transactions, which enhanced our
financial flexibility and strengthened the balance sheet,
demonstrating our ongoing commitment to prudent financial
management. As we reach the midpoint of our current period, we are
seeing positive signals in market activity in what is historically
our strongest quarter. The initiatives we've taken position Dye
& Durham well to capitalize on emerging opportunities, while
continuing to grow the business and create value for all
shareholders."
Third Quarter Fiscal 2024 Highlights
- Revenue was up 3% including the impact of TM Group
("TMG") compared to the equivalent period in the prior
year.
- $125.5 million of Annual
Recurring Revenue1, or 30% of total revenue2,
representing an 85% increase year over year.
- Organic revenue growth rate of 4.1% year over year for the
quarter ended March 31,
20244.
- Net loss for the third quarter was $39.7
million, an increase of $4.6
million or 13% compared to the equivalent period in the
prior year.
- Adjusted EBITDA3 was $59.8
million, an increase of $3.7
million or 7%, from the equivalent period in the prior year,
despite the loss of contributed Adjusted EBITDA3 from
TMG in the prior year.
- Net debt reduction of $102
million as at March 31, 2024,
as compared to June 30, 2023.
- The Company continues to work towards reducing its net debt to
adjusted EBITDA to below four times.
Substantial Issuer Bid
On May 14, 2024, the Board of
Directors also approved the commencement of a substantial issuer
bid (the "Offer") under which the Company will offer to
repurchase for cancellation up to $185
million in aggregate principal amount of its issued and
outstanding 3.75% convertible senior unsecured debentures due
March 1, 2026 ("Debentures"), being
all of the currently outstanding Debentures.
The Offer would pay down up to $185
million of overall debt consistent with the Company's
strategy to reduce total debt over time. Dye & Durham is making
the Offer at a purchase price of $900
per $1,000 of Debenture face value
representing a maximum aggregate purchase price of $166.5 million. The Company expects to announce
the terms of the Offer and commence the Offer on May 17, 2024.
The Offer will not be conditional upon any minimum number of
Debentures 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 Debentures, certain events
occur.
If debentureholders representing at least 90% of the outstanding
principal amount of the Debentures tender their Debentures to and
accept the Offer, the Company may exercise its rights pursuant to
Article 12 of the trust indenture governing the Debentures dated
February 23, 2021 between the Company
and Computershare Trust Company of Canada (the "Trust Indenture") to acquire
Debentures held by the Dissenting Debentureholders (as such term is
defined in the Trust Indenture) for the same consideration per
Debenture payable or paid, as the case may be, under 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 Debentures will be filed
with the applicable securities regulators and mailed to registered
debentureholders. The Offer Documents will be available under the
Company's SEDAR+ profile at www.sedarplus.ca.
Neither the Company nor its board of directors makes any
recommendation to debentureholders as to whether to tender or
refrain from tendering any or all of their Debentures to the Offer.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell any Debentures. The solicitation
and the offer to purchase Debentures by the Company is being made
only pursuant to the Offer Documents. Debentureholders 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.
Quarterly Dividend
On May 14, 2024, the Board of
Directors declared a quarterly dividend of $0.01875 per share to shareholders of record on
May 21, 2024, payable on or about
May 28, 2024.
Conference Call Notification
The Company will hold a conference call to discuss its business
later today, Tuesday, May 14, 2024,
at 5:00 p.m. ET hosted by senior
management. A question-and-answer session will follow the corporate
update.
DATE: Tuesday, May 14, 2024
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/3xWFgmF
TRADITIONAL DIAL-IN NUMBER: (416) 764-8659 or (888) 664-6392
REFERENCE NUMBER: 84458967
TAPED REPLAY: (416) 764-8677 or (888) 390-0541
REPLAY CODE: 458967#
This call is being webcast and can be accessed by going to:
https://app.webinar.net/j1nwyYLERZO
- As of March 31, 2024.
- Excluding TM Group revenues and other non-billing
adjustments
- 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, Adjusted EBITDA, and Organic Revenue, 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. Please see the "Non-IFRS
Financial Measures" section of this press release for a
reconciliation of Organic Revenue to Revenue.
- Organic Revenue Growth Rate
Organic Revenue Growth
Rate is calculated by the total revenue in the current quarter
period (excluding the pre-acquisition quarterly revenue of those
acquisitions executed in the last twelve months period from
March 31, 2024 and discontinued
businesses) divided by the total revenue in the prior quarter
period (excluding discontinued businesses). Below is a
reconciliation of Organic Revenue to Revenue.
|
Q3
FY2024
|
Q3
FY2023
|
Revenue
|
107.3
|
104.1
|
TM Group
Pre-Divestiture
|
-
|
(13.0)
|
Pre-Acquisition
Reporting Results
|
(13.2)
|
|
Discontinued
Businesses
|
-
|
(0.8)
|
Organic
Revenue
|
94.1
|
90.3
|
Organic Revenue
Growth Rate
|
4.1 %
|
|
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", "Adjusted EBITDA", and
"Organic Revenue" (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 including change
in fair value of the Company's convertible debentures, loss on
settlement of loans and borrowings, realized loss on derivatives,
gains or losses from re-financing transactions and provision for
income taxes.
Adjusted EBITDA
Adjusted EBITDA adjusts EBITDA for stock-based compensation
expense, loss on disposal of assets held for sale, specific
transaction-related expenses related to acquisitions, listing and
reorganization related expenses, integration and operational
restructuring costs. Operational restructuring costs are incurred
as a direct or indirect result of acquisition activities.
Operational restructuring costs include the full period impact of
cost synergies related to the reduction of employees for
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 timing and
completion of the Offer, the intentions of the Company's directors
and officers and debentureholders with respect to tendering to the
Offer, and the Company's financial outlook and business strategy,
including its debt reduction strategy and products and services. 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
expectations of the Offer and 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
continuing as expected, (ii) the Company continuing to effectively
execute against its key strategic growth priorities, (iii) the
Company continuing to retain and grow its existing customer base
and market share, (iv) the Company being able to take advantage of
future prospects and opportunities, and realize on synergies,
including with respect of acquisitions, (v) there being no changes
in legislative or regulatory matters that negatively impact the
Company's business, (vi) current tax laws remaining in effect and
not being materially changed, (vii) economic conditions remaining
relatively stable throughout the period, (vii) the industries Dye
& Durham operates in continuing to grow consistent with past
experience, (ix) the seasonal trends in real estate transaction
volume continuing as expected, * the Company's expectations
regarding its debt reduction strategy being 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, 2024. 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