Mr. Richard Kellam reports

DATA COMMUNICATIONS MANAGEMENT CORP. ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS

Data Communications Management Corp. had continued momentum in the first quarter of 2023 with revenue up 9.8 per cent and gross profit up 16.3 per cent, compared with the first quarter of 2022, respectively. Revenue growth has been driven by a combination of expansion revenue with existing clients and new business wins. Gross margin growth exceeded revenue growth, reflecting the company's commitment to operational excellence and driving higher levels of net income.

First quarter 2023 highlights -- building a bigger business:

• Revenue for the first quarter of 2023 was up 9.8 per cent, or $6.8-million, versus Q1 year ago, for total revenues of $76.1-million.
• Gross profit accelerated 16.3 per cent, or $3.3-million for a total of $23.6-million.
• Gross profit as a percentage of revenues grew 1.8 percentage points to 31.1 per cent, versus 29.3 per cent YA.
• The 63.4-per-cent increase in its share price during the quarter resulted in a $4.5-million non-cash mark-to-market expense related to long-term incentive compensation accruals; normalizing for this adjustment and accounting for acquisition-related costs, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $12.3-million or 16.2 per cent of revenue versus$9.4-million and 13.6 per cent of revenues YA.
• There were no restructuring expenses or any other adjustments or one-time costs, other than $6.1-million in costs related to the acquisition of Moore Canada Corp. (MCC), which is now a wholly owned subsidiary of Data Communications.
• Total debt was lower by 17.4 per cent, or $4.7-million, versus year-end 2022 to $22.6-million.

First quarter 2023 operational highlights -- building a better business:

• On April 24, 2023, Data Communications closed the acquisition of MCC for a total cash purchase price of $130.8-million, subject to final working capital and other customary postclosing adjustments. With the completion of the acquisition, MCC is a wholly owned subsidiary of Data Communications. The acquisition was financed through a revolving, floating-rate credit facility from a Canadian chartered bank, which includes up to $90-million of revolving credit capacity; a $30-million floating-rate term loan facility from the bank; and a new $50-million fixed-rate credit facility from Fiera Private Debt. Commencing in the second quarter of 2023, Data Communications will begin to report the financial results of MCC in its consolidated financial reporting.
• Rael Fisher, formerly president of MCC, is leading its postmerger integration process as chief integration officer.

Management commentary

"As we continue our journey building a better and bigger business, I'm pleased to report a first quarter highlighted by the continued strong performance of the DCM business and the substantial progress we made completing the acquisition of the MCC," said Richard Kellam, chief executive officer and president of Data Communications.

"In connection with the closing of the MCC acquisition, we announced our updated five-year strategic financial objectives. We are now targeting organic annual revenue growth at a compounded annual growth of 5 per cent per year and adjusted EBITDA as a percentage of revenue of more than 14 per cent over the next five years. As a combined company, we are also focused on driving greater efficiency across the business, including our organization, operations and procurement. We expect to realize total annualized postmerger synergies in the range of $25-million to $30-million over the next 18 to 24 months.

"We are very pleased to have Rael Fisher leading our postmerger integration process. We are off to a very fast start under Rael's leadership with the support of Boston Consulting Group. Our teams are actively working together serving current customers, pursuing new opportunities to accelerate our growth agenda and continuing our positive momentum, building both a better and bigger business. We look forward to reporting on our consolidated results and progress in future quarters."

First quarter 2023 earnings call

The company will host a conference call and webcast on Thursday, May 11, 2023, at 9 a.m. Eastern Time. Mr. Kellam, and James Lorimer, chief financial officer, will present the first quarter 2023 results followed by a live question-and-answer period.

Instructions on how to listen to both the webcast and telephone call are available below. For those unable to join live, a replay of the webcast will be available on the Data Communications investor relations page.

Data Communications will be using Microsoft Teams to broadcast its earnings call, which will be available through the options below.

Meeting ID:  228 920 117 001

Passcode:  ex4x9Y

Call-in (audio only):  1-647-749-9154, 820674274 followed by the number sign in Toronto, Canada

Phone conference ID:  820 674 274 followed by the number sign

The company's full results will be posted on its investor relations page and on SEDAR. A video message from Mr. Kellam will also be posted on the company's website.

The attached table sets out selected historical consolidated financial information for the periods noted.

About Data Communications Management Corp.

Data Communications is a marketing and business communications partner that helps companies simplify the complex ways they communicate and operate, so they can accomplish more with fewer steps and less effort. For over 60 years, Data Communications has been serving major brands in vertical markets, including financial services, retail, health care, energy, other regulated industries and the public sector. It integrates seamlessly into its clients' businesses as a result of its deep understanding of their needs, transformative technology-enabled solutions and end-to-end service offering. Whether it is running technology platforms, sending marketing messages or managing print workflows, its goal is to make everything surprisingly simple.

We seek Safe Harbor.