Data Communications Management (TSX:DCM) Q4 2023 Earnings Call

0:00 Hello, I'm speaking to you today from our Vipont plant in Mississauga. We just released our Q4 and full year results for 2023. And in this video, I'll recap our financial performance. I'll share highlights of the past year and outline our priorities for 2024. 2023 was a transformative year for DCM. We announced plans to acquire Moore Canada Corporation in late February and celebrated our day one as a combined company on April 25th. The acquisition almost doubled the size of our business and our team overnight. To build on the momentum in our business, we prioritized getting off to a very fast start, bringing our teams together and integrating our operations.

0:49 During the year, we announced plans to reduce our plant network from 14 to 10 facilities to be more efficient and to drive cost savings. We completed the closure of the first of those facilities in December and we are on track in our planning to close the remaining plants and transfer production to other DCM facilities. We also completed the planned sale and lease back of three MCC facilities for $38 million and used the proceeds to pay down debt. Most importantly, we kept our eye on the ball and delivered exceptional service for our clients in a year of significant change. Our combined commercial team delivered solid performance, growing revenue with existing clients and winning new logos with a focus on our expanded suite of digital and tech enabled solutions.

1:44 In summary, I'm very pleased with what we have achieved in our first year together as a combined company. Our merger integration is on track and we are well positioned for success moving forward. Turning to our financial performance in 2023, here are some key takeaways. Our full year revenue for 2023 was $448 million, up 63.5% versus the prior year. Gross profit increased 41% to $118.9 million. Gross margin for the full year was 26.6% compared to 30.8% in 2022.

2:30 This was very much in line with our expectations and reflected the lower gross margin contributions of the MCC business. As a reminder, we are committed to enhancing MCC gross margins and returning our combined gross margin to pre-acquisition levels in the 30% range. For 2024, our top three priorities are as follows. First, complete the integration of MCC by moving ahead with our plant consolidation plans and harmonizing our back office systems. Second, drive improvement in our gross margin with a focus on enhancing profit margins in the legacy MCC business. And third, deliver on our commitment to growing the business by taking advantage of our larger scale, our expanded product and services, and our capabilities of our combined teams. Finally, I want to thank the entire DCM team for your outstanding efforts throughout the year and for working together to build a better and a bigger business. I look forward to reporting on our progress in future quarters.

3:40 Thank you.