Mr. Matthew Proud reports

DYE & DURHAM REPORTS FIRST QUARTER FISCAL 2024 FINANCIAL RESULTS

Dye & Durham Ltd. has released its financial results for the three months ended Sept. 30, 2023.

"This was our second-best quarter on record in terms of revenue -- backing out TM Group -- underscoring the strength and resilience of our business and its consistent ability to generate ample free cash flow to finance our operations, meet our debt obligations and fuel future growth. With more than 27 per cent of our revenue representing ARR, we feel that we are extremely well positioned to continue to build Dye & Durham into a global legal technology leader," said Dye & Durham chief executive officer Matthew Proud. "During the quarter, we drove significant progress against our strategic priorities, anchored in our focus on growing organic revenue through increased sales in each of our markets. We are prioritizing the reduction of our leverage ratio as quickly as possible to less than four times total net debt to adjusted [earnings before interest, taxes, depreciation and amortization], as evidenced by $45-million in debt reduction during the quarter. At the same time, this quarter, we closed small deals in the legal practice management space that we locked into in fiscal 2023."

Annual recurring revenue (ARR) growth

The company continues to increase its ARR. ARR was $117-million of total revenue, which was 27 per cent of total revenue as of Sept. 30, 2023. This is more than double the 13 per cent at the same point in the prior year.

First quarter fiscal 2024 highlights:

• Revenue of $120.1-million, unchanged from the same period in the prior year; the comparative period revenue included an additional $9.3-million of revenue from TM Group, which was divested on Aug. 3, 2023; excluding the impact of TMG divesture, revenue has grown by 8.1 per cent;
• Net income of ($13.5-million), a decrease of $2.0-million from the same period in the prior year, primarily due to higher financing costs partially offset by total adjusted operating expenses, as well as lower stock-based compensation and acquisition and restructuring costs;
• Adjusted EBITDA of $68.7-million, an increase of $4.3-million, or 7 per cent, from the same period in the prior year;
• Total debt was $45.0-million lower as of Sept. 30, 2023, compared with June 30, 2023, mainly as a result of debt repayments made during the quarter.

Business performance improvement plan

To enable Dye & Durham to deliver on its growth and leverage ratio reduction objectives, the company has targeted an improvement plan of greater than $70-million in free cash flow performance on an annualized basis, compared with the first quarter of fiscal 2024 to be fully realized by the end of third quarter fiscal 2024. The company has already actioned $40-million annualized in second quarter fiscal 2024, with the full benefit of this to be realized in third quarter fiscal 2024. The company is implementing a series of measures to achieve this goal, including a reduction in capital expenditures, product price optimization, and further reducing acquisition, restructuring and other costs, as well as lowering its current operating costs.

Quarterly dividend

On Oct. 30, 2023, the board of directors declared a quarterly dividend of 1.875 cents per share to shareholders of record on Nov. 8, 2023, payable on or about Nov. 15, 2023.

Conference call notification

The company will hold a conference call to discuss its business later today, Monday, Oct. 30, 2023, at 5 p.m. ET, hosted by senior management. A question-and-answer session will follow the corporate update.

Date:  Monday, Oct. 30, 2023

Time:  5 p.m. ET

RapidConnect:  To instantly join the conference call by phone, please register and be connected into the conference call automatically.

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

Reference No.:  70290380

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

Replay code:  290380 followed by the number sign

This call is being webcast.

About Dye & Durham Ltd.

Dye & Durham provides premier practice management solutions, empowering legal professionals every day, delivers vital data insights to support critical corporate transactions, and enables the essential payment infrastructure trusted by government and financial institutions. The company has operations in Canada, the United Kingdom, Ireland, Australia and South Africa.

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