Mr. Matt Proud reports

DYE & DURHAM REPORTS THIRD QUARTER FISCAL 2023 FINANCIAL RESULTS AND ANNOUNCES NEW SUBSTANTIAL ISSUER BID

Dye & Durham Ltd. has released its financial results for the three months (fiscal Q3) 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 cash flow 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 EBITDA to be in the range of $65-million to $70-million," said Dye & Durham chief executive officer 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 per cent 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 per cent, significantly exceeding our initial target of 10 per cent 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 expenses savings of $42-million, or 19 per cent on an annualized basis compared to fiscal Q3 2022, exceeding its targeted 10 per cent 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 per cent, 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 EBITDA (earnings before interest, taxes, depreciation and amortization) of $56.1-million, a decrease of $10.7-million, or 16 per cent, 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-million to $120-million;
• Adjusted EBITDA of $65-million to $70-million.

Quarterly dividend

The board of directors declared a quarterly dividend of 1.875 cents 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 under which the company will offer to repurchase for cancellation up to $15-million of its outstanding 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-million. 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 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.

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

Traditional dial-in number:  416-764-8659 or 888-664-6392

Reference No.:  11745439

Taped replay:  416-764-8677 or 888-390-0541

Replay code:  745439 followed by the pound key

About Dye & Durham Ltd.

Dye & Durham is one of the world's largest providers of cloud-based legal practice management software. Dye & Durham also provides critical information services and workflows, which customers use to manage their non-discretionary information, regulatory and due diligence requirements. The company has operations in Canada, the United Kingdom, Ireland and Australia.

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