TORONTO, March 20,
2024 /CNW/ - Dye & Durham Limited ("Dye
& Durham" or "Holdings"), (TSX: DND) today announced
that Dye & Durham Corporation (the "Company"), a
wholly-owned subsidiary of Holdings, commenced the marketing of a
new senior secured Term Loan B facility and revolving credit
facility (the "New Senior Secured Credit Facilities"). In
conjunction with the New Senior Secured Credit Facilities, and
subject to market and other conditions, the Company plans to launch
the marketing of additional new secured debt (the "Additional
Secured Debt", and together with the New Senior Secured Credit
Facilities, the "Refinancing Transactions"). The
Company intends to use the initial borrowings under the New Senior
Secured Credit Facilities, together with the net proceeds of any
Additional Secured Debt raised and cash on hand, to: (i) refinance
the Company's existing credit facilities, (ii) repurchase some or
all of the Company's 3.75% convertible senior unsecured debentures
due 2026, and (iii) finance working capital needs and for general
corporate purposes. The foregoing description and any other
information regarding the potential of the Company incurring
secured debt is included herein solely for informational purposes,
and this press release is not an offer to sell any secured
debt.
"This refinancing represents a significant milestone in our
previously announced deleveraging plan as we continue to target
less than four times total net debt to Adjusted EBITDA," said
Matthew Proud, Chief Executive
Officer of Dye & Durham. "Assuming the refinancing is
successful, we will have significantly reduced our annual interest
costs, increased free cash flow and positioned Dye & Durham
well for future growth."
The refinancing of the Company's existing credit facilities will
address the risk that its maturity is accelerated in the event that
any of the Company's 3.75% convertible senior unsecured debentures
due 2026 are outstanding as at September 30,
2025.
Financial Update
In connection with the planned Refinancing Transactions,
Holdings has also disclosed the following financial
information:
- Approximately $278 million of
Further Adjusted EBITDA for the last twelve months (LTM) ending
December 31, 2023.1,2
- Organic Revenue Growth Rate of 3.0% year over year for the
quarter ended December 31,
2023.2
- $118.6 million of annual
recurring revenue ("ARR") for the period ending February 1, 2024, an increase of $6.5 million from the period ending December 31, 2023.2
1. Adjusted EBITDA was $250
million and net income was $(173)
million over the same period. See below for a reconciliation
of Further Adjusted EBITDA to Adjusted EBITDA. Further
Adjusted EBITDA takes into account the pre-acquisition results of
businesses acquired in the twelve months ended December 31, 2023 and certain other efficiencies
that have been identified and, in some cases, implemented by Dye
& Durham, and which are described in more detail below under
"Non-IFRS Financial Measures". There can be no assurance that Dye
& Durham will be able to realize on some or all of these
efficiencies.
2. Adjusted EBITDA, Further Adjusted EBITDA, Organic Revenue
Growth Rate and ARR are 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. For further
information and the relevant definitions, see the "Non-IFRS
Financial Measures" section of this press release.
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. Dye & Durham 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 Dye & Durham's results of operations from
management's perspective and to discuss Dye & Durham's
financial outlook. Dye & Durham'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. Dye
& Durham uses non-IFRS measures, including "Adjusted EBITDA",
"Further Adjusted EBITDA", "Organic Revenue Growth Rate" and "ARR"
(each as described below), to provide investors with supplemental
measures of its operating performance and to eliminate items that
management believes has 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. Dye & Durham's management also uses
non-IFRS financial measures in order to facilitate operating
performance comparisons from period to period. Dye & Durham
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 Dye
& Durham's most recent Management's Discussion and Analysis,
which is available on its 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, 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.
Further Adjusted EBITDA
Further Adjusted EBITDA further adjusts Adjusted EBITDA for the
impact of (i) business acquired in the twelve months ended
December 31, 2023 attributable to the
portion of such period prior to the date of acquisition of each
entity, inclusive of due diligence adjustments, (ii) the removal of
the results of TM Group, which Holdings divested in Q1 2024 and
(iii) platform consolidation, cost savings and other realized and
reasonably anticipated synergies in respect of acquisitions
consummated prior to December 31,
2023, as if such synergies had been fully realized as of
January 1, 2023 and realized and
reasonably anticipated cost savings derived from integration
initiatives, including employee rationalization, operational
efficiencies relating to IT infrastructure integration and IT
outsourcing. Below is a reconciliation of Further Adjusted EBITDA
to Adjusted EBITDA.
(in
millions)
|
|
Adjusted
EBITDA
|
$250
|
Adjustments
|
Pre-Acquisition
Reporting Results
|
$7
|
TM Group
Divestiture
|
$(5)
|
Remaining
Synergies
|
$26
|
Further Adjusted
EBITDA
|
$278
|
|
|
|
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 LTM period
from December 31, 2023 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.
(in
millions)
|
Q2 2024
|
Q2 2023
|
Revenue
|
$110.2
|
$106.7
|
TM Group Revenue
Pre-Divestiture
|
--
|
$(12.5)
|
Pre-Acquisition
Reporting Results
|
$(14.3)
|
--
|
Discontinued
Businesses
|
--
|
$(1.0)
|
Organic
Revenue
|
$95.9
|
$93.1
|
Organic Revenue
Growth Rate
|
3.0 %
|
|
ARR
Annual recurring revenue includes revenues from subscriptions
and revenue from minimum spend contracts. Revenue derived from
customers with contracts that include a minimum committed level
(volume or spend) with a fixed term of 12 months or more is
included in our calculation of ARR.
Forward-looking Statements
This press release may contain forward-looking information
within the meaning of applicable securities laws, which reflects
Dye & Durham's current expectations regarding future events. 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. Specifically,
forward-looking statements include, without limitation, statements
regarding the Company's Refinancing Transactions, including the
contemplated New Senior Secured Credit Facilities and any
Additional Secured Debt incurrence, the use of proceeds
therefrom and the realization of the efficiencies and synergies
reflected in the Further Adjusted EBITDA
measure. 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.
Forward-looking information is based on a number of assumptions
and is subject to a number of risks and uncertainties, many of
which are beyond Dye & Durham's control, which could cause
actual results and events to differ materially from those that are
disclosed in or implied by such forward-looking information. Such
risks and uncertainties include, but are not limited to, the risk
that the Company is unable to successfully market the New Senior
Secured Credit Facilities and the Additional Secured Debt, such
that one or both of such financings do not close or are not as
successful as they are intended to be, the risk that the maturity
of the Company's existing credit facilities accelerates, the risk
that Dye & Durham is not able to realize the efficiencies and
synergies reflected in the Further Adjusted EBITDA measure and the
factors discussed under "Risk Factors" in Dye & Durham's most
recent annual information form.
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 Dye & Durham 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 it or that
it 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.
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, Dye
& Durham 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