Market Overview

Data Communications Management Corp. Announces Second Quarter Financial Results for 2018

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HIGHLIGHTS

SECOND QUARTER 2018

  • Revenues increased 7.0% year over year to $78.2 million compared with
    $73.1 million in the prior year, fuelled by a 5.1% increase in our
    core DCM business
  • Adjusted EBITDA of $4.1 million, compared to $4.3 million in the prior
    year (See Table 2 and "Non-IFRS Measures" below)
  • Net Loss of $1.2 million, including restructuring expenses of $0.7
    million, acquisition costs of $0.3 million and one-time business
    reorganization costs of $0.8 million compared to Net Loss of $0.6
    million, including restructuring expenses of $1.7 million in the prior
    comparative period
  • Adjusted net income of $0.2 million, compared to $0.7 million in the
    prior comparative period (See Table 3 and "Non-IFRS Measures" below)

YEAR TO DATE

  • Revenues increased 16.4% year over year to $166.7 million compared
    with $143.2 million in the prior year, enhanced by a 10.9% increase in
    our core DCM business
  • Adjusted EBITDA of $10.4 million, an increase of 45.6% year over year
    (See Table 2 and "Non-IFRS Measures" below)
  • Net Income of $0.6 million, including restructuring expenses of $0.8
    million, acquisition costs of $0.3 million and one-time business
    reorganization costs of $1.2 million compared to Net Loss of $2.7
    million, including restructuring expenses of $3.6 million and
    acquisition costs of $1.0 million in the prior comparative period
  • Adjusted Net Income of $2.3 million, compared to $1.0 million in the
    prior comparative period (See Table 3 and "Non-IFRS Measures" below)
  • Adopts new accounting standards IFRS 9 Financial Instruments ("IFRS
    9") and IFRS 15 Revenue from Contracts with Customers
    ("IFRS 15") effective January 1, 2018

RECENT EVENTS

  • Announces new hybrid digital label press to support customer wins in
    emerging Canadian cannabis packaging label market and other growth
    opportunities in label markets
  • Reconfirms financial outlook for fiscal 2018

DATA Communications Management Corp. (TSX:DCM) ("DCM" or the "Company"),
a leading provider of business communication solutions to companies
across North America, announced its consolidated financial results for
three and six months ended June 30, 2018.

"Our revenue continued to demonstrate year over year growth, thanks to
contributions from our recent acquisitions and a second consecutive
quarter of growth in our core DCM business. Our sales pipeline continues
to be robust, strengthened by recent wins in the licensed cannabis
industry in which we have recently been awarded multi-year contracts
with several leading licensed producers to provide Health Canada
compliant packaging labels for a variety of cannabis products. We expect
to see incremental revenue in this emerging market in the third and
fourth quarters as these producers come to market," said Gregory J.
Cochrane, President & CEO.

"I am disappointed with our gross margin in the second quarter, which
was largely attributed to higher volumes of lower margin product mix
compared to last year, and to a lesser extent the impact of paper and
other raw materials price increases that are being experienced
industry-wide. Nonetheless, we plan to effect price increases as
contract terms allow us, and longer-term we expect to achieve higher
margins with these customers. On the positive side, we continue to see
gross margin improvements on non-contracted business and we expect
significantly improved margins in our packaging label business and other
newly contracted business in the second half of the year, which is
typically seasonally stronger in any event," he continued.

To support anticipated growth in the cannabis market and other growth
opportunities in the label market, DCM announces it has secured the
first Gallus Heidelberg Labelfire 340 hybrid digital ink-jet /
flexographic label press in the Canadian market.

"DCM has been successful in applying its expertise in managing highly
complex, regulatory compliant, variable content for web to
print-on-demand production and has developed innovative solutions for
the cannabis market. This press is expected to further differentiate
DCM's capabilities in the market," Mr. Cochrane concluded.

RESULTS OF OPERATIONS

All financial information in this press release is presented in Canadian
dollars and in accordance with International Financial Reporting
Standards ("IFRS"), as issued by the International Accounting Standards
Board ("IASB").

Table 1 The following table sets out selected historical
consolidated financial information for the periods noted.

                 
For the periods ended June 30, 2018 and 2017   Apr. 1 to   Apr. 1 to   Jan. 1 to   Jan. 1 to
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
(in thousands of Canadian dollars, except share and per share
amounts, unaudited)
  $   $   $   $
Revenues (1) 78,176 73,066 166,692 143,192
Cost of revenues   59,587     55,062     126,628     108,828  
Gross profit 18,589 18,004 40,064 34,364
 
Selling, general and administrative expenses 17,750 15,715 35,422 30,739
Restructuring expenses 736 1,735 800 3,621
Acquisition costs   270     13     313     969  
 
(Loss) income before finance costs and income taxes   (167 )   541     3,529     (965 )
 
Finance costs (income)
Interest expense 1,273 1,181 2,412 2,131
Interest income (2 )

-

(4 ) 0
Amortization of transaction costs   158     121     301     236  
    1,429     1,302     2,709     2,367  
 
(Loss) income before income taxes   (1,596 )   (761 )   820     (3,332 )
 
Income tax (recovery) expense
Current (288 ) 288 555 339
Deferred   (114 )   (468 )   (304 )   (993 )
    (402 )   (180 )   251     (654 )
 
Net (loss) income for the period   (1,194 )   (581 )   569     (2,678 )
 
Basic (loss) earnings per share (0.06 ) (0.04 ) 0.03 (0.20 )
Diluted (loss) earnings per share (0.06 ) (0.04 ) 0.03 (0.20 )
Weighted average number of common shares outstanding, basic 20,870,234 13,637,875 20,456,993 13,079,515
Weighted average number of common shares outstanding, diluted   20,870,234   13,637,875   20,495,793   13,079,515
 

(1)

 

2018 revenues include the impact of the adoption of new
accounting standard IFRS 15. Refer to note 3 of the unaudited
consolidated interim financial statements for three and six months
ended June 30, 2018 for further details on the impact of the
adoption of new accounting standards.

As at June 30, 2018 and December 31, 2017   As at June   As at Dec. 31,
30, 2018 2017
(in thousands of Canadian dollars, unaudited)   $   $
Current assets 83,402 82,804
Current liabilities 61,919 68,648
 
Total assets 141,648 131,859
Total non-current liabilities 72,254 68,610
 
Shareholders' equity / (deficit)   7,475     (5,399 )
 

Table 2 The following table provides reconciliations of
net (loss) income to EBITDA and of net (loss) income to Adjusted EBITDA
for the periods noted. See "Non-IFRS Measures".

EBITDA and Adjusted EBITDA Reconciliation

                 
For the periods ended June 30, 2018 and 2017   Apr. 1 to   Apr. 1 to   Jan. 1 to   Jan. 1 to
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
(in thousands of Canadian dollars, unaudited)   $   $   $   $
Net (loss) income for the period   (1,194 )   (581 )   569     (2,678 )
 
Interest expense 1,273 1,181 2,412 2,131
Interest income (2 )

-

(4 )

-

Amortization of transaction costs 158 121 301 236
Current income tax (recovery) expense (288 ) 288 555 339
Deferred income tax recovery (114 ) (468 ) (304 ) (993 )
Depreciation of property, plant and equipment 1,176 1,058 2,324 1,943
Amortization of intangible assets   1,232     906     2,301     1,599  
EBITDA 2,241 2,505 8,154 2,577
 
Restructuring expenses 736 1,735 800 3,621
One-time business reorganization costs 839

-

1,171

-

Acquisition costs   270     13     313     969  
Adjusted EBITDA (1)   4,086     4,253     10,438     7,167  

(1)

 

2018 revenues include the impact of the adoption of new
accounting standard IFRS 15. Refer to note 3 of the unaudited
consolidated interim financial statements for three and six months
ended June 30, 2018 for further details on the impact of the
adoption of new accounting standards.

Table 3 The following table provides reconciliations of
net (loss) income to Adjusted net (loss) income and a presentation of
Adjusted net (loss) income per share for the periods noted. See
"Non-IFRS Measures".

Adjusted Net (Loss) Income Reconciliation

                 
For the periods ended June 30, 2018 and 2017   Apr. 1 to   Apr. 1 to   Jan. 1 to   Jan. 1 to
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
(in thousands of Canadian dollars, except share and per share
amounts, unaudited)
  $   $   $   $
Net (loss) income for the period   (1,194 )   (581 )   569     (2,678 )
 
Restructuring expenses 736 1,735 800 3,621
One-time business reorganization costs 839

-

1,171

-

Acquisition costs 270 13 313 969
Tax effect of the above adjustments   (410 )   (453 )   (513 )   (945 )
Adjusted net (loss) income (1)   241     714     2,340     967  
 
Adjusted net (loss) income per share, basic   0.01     0.05     0.11     0.07  
Adjusted net (loss) income per share, diluted   0.01     0.05     0.11     0.07  
Weighted average number of common shares outstanding, basic   20,870,234     13,637,875     20,456,993     13,079,515  
Weighted average number of common shares outstanding, diluted   21,742,477     13,637,875     20,495,793     13,079,515  
Number of common shares outstanding, basic   21,523,515     19,263,235     21,523,515     19,263,235  
Number of common shares outstanding, diluted   22,395,758     19,263,235     21,587,945     19,263,235  

(1)

 

2018 revenues include the impact of the adoption of new
accounting standard IFRS 15. Refer to note 3 of the unaudited
consolidated interim financial statements for three and six months
ended June 30, 2018 for further details on the impact of the
adoption of new accounting standards.

Revenues

For the quarter ended June 30, 2018, DCM recorded revenues of
$78.2 million, an increase of 7.0% or $5.1 million compared with the
same period in 2017. Excluding the effects of adopting IFRS 15, for the
quarter ended June 30, 2018, revenues were $3.9 million, or 5.3%, higher
than the same period last year. The increase in revenues for the quarter
ended June 30, 2018 was primarily due to additional revenues from the
acquisitions of BOLDER Graphics and Perennial, new revenues contributed
by a major Canadian Schedule I bank which DCM won late in the third
quarter of 2017 and increased volumes in labels and thermal paper work
for customers. The increase in revenues was partially offset by the
reduction in spend by certain customers, particularly in the financial
institutions sector due to a technological shift in the way they conduct
business.

For the six months ended June 30, 2018, DCM recorded revenues of $166.7
million, an increase of 16.4% or $23.5 million compared with the same
period in 2017. Excluding the effects of adopting IFRS 15, for the six
months ended June 30, 2018, revenues were $3.9 million, or 5.3%, higher
than the same period last year. The increase in revenues for the six
months ended June 30, 2018 was primarily due to additional revenues from
the acquisitions of Eclipse, Thistle BOLDER Graphics and Perennial, new
revenues contributed by a major Canadian Schedule I bank which DCM won
late in the third quarter of 2017, increased volumes in labels work for
existing and new retailer customers, and a one-time increase in volume
from a long-standing customer which generated $8.9 million in higher
revenues relative to the same period last year. The increase in revenues
was partially offset by the reduction in spend by certain customers,
particularly in the financial institutions sector due to a technological
shift in the way they conduct business. Overall, DCM continues to
benefit from the growth initiatives it effected throughout 2017 and the
first half of 2018 to help offset some of the secular declines
experienced by the industry.

Cost of Revenues and Gross Profit

For the quarter ended June 30, 2018, cost of revenues increased to $59.6
million from $55.1 million for the same period in 2017, resulting in a
$4.5 million or 8.2% increase over the same period last year. Excluding
the effects of the adjustments upon adoption of IFRS 15, cost of
revenues $2.8 million or 5.0% relative to the same period last year. For
the six months ended June 30, 2018, cost of revenues increased to $126.6
million from $108.8 million for the same period in 2017, resulting in a
$17.8 million or 16.4% increase over the same period last year.
Excluding the effects of the adjustments upon adoption of IFRS 15, cost
of revenues increased by $13.5 million or 12.4% relative to the same
period last year.

Gross profit for the quarter ended June 30, 2018 was $18.6 million,
which represented an increase of $0.6 million or 3.2% from $18.0 million
for the same period in 2017. Excluding the effects of adopting IFRS 15,
gross profit $1.1 million or 6.3% relative to the same period last year.
Gross profit as a percentage of revenues decreased to 23.8% for the
quarter ended June 30, 2018 compared to 24.6% for the same period in
2017 however, excluding the effects of adopting IFRS 15, gross profit as
a percentage of revenues was 24.9% for the quarter ended June 30, 2018.
The decrease in gross profit as a percentage of revenues for the quarter
ended June 30, 2018 was positively impacted by higher gross margins
attributed to Eclipse, Thistle, BOLDER Graphics and Perennial, and due
to the refinement of DCM's pricing discipline and cost reductions
realized from prior cost savings initiatives. The increase in gross
profit as a percentage of revenues was, however, partially offset by
changes in product mix, the impact of paper and other raw materials
price increases and compressed margins on contracts with certain
existing customers.

Gross profit for the six months ended June 30, 2018 was $40.1 million,
which represented an increase of $5.7 million or 16.6% from
$34.4 million for the same period in 2017. Excluding the effects of
adopting IFRS 15, gross profit increased by $5.0 million or 14.5%
relative to the same period last year. Gross profit as a percentage of
revenues for the six months ended June 30, 2018 remained largely
unchanged from the prior year at 24.0%, however, excluding the effects
of adopting IFRS 15, gross profit as a percentage of revenues was 24.3%
for the six months ended June 30, 2018. The increase in gross profit as
a percentage of revenues for the six months ended June 30, 2018 was
positively impacted by higher gross margins attributed to Eclipse,
Thistle, BOLDER Graphics and Perennial, and due to the refinement of
DCM's pricing discipline and cost reductions realized from prior cost
savings initiatives. The increase in gross profit as a percentage of
revenues was, however, partially offset by changes in product mix, the
impact of paper and other raw materials price increases and compressed
margins on contracts with certain existing customers.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses for the quarter
ended June 30, 2018 increased $2.0 million or 12.9% to $17.8 million
compared to $15.7 million in the same period in 2017. Excluding the
effects of adopting IFRS 9 and 15, SG&A expenses were $2.1 million
higher for the quarter ended June 30, 2018 when compared to the same
period last year. As a percentage of revenues, these costs were 22.7%
(or 23.1% before the affects of adopting IFRS 9 and 15) of revenues for
the six months ended June 30, 2018 and 2017, respectively. The increase
in SG&A expenses for the quarter ended June 30, 2018 was primarily
attributable to the acquisitions of Eclipse, Thistle, BOLDER Graphics
and Perennial, one time business reorganization costs of $0.8 million,
additional professional fees and higher sales commission costs
commensurate with the increase in revenues.

SG&A expenses for the six months ended June 30, 2018 increased
$4.7 million or 15.2% to $35.4 million compared to $30.7 million for the
same period of 2017. Excluding the effects of adopting IFRS 9 and 15,
SG&A expenses were $4.5 million higher for the six months ended June 30,
2018 when compared to the same period last year. As a percentage of
revenues, these costs were 21.2% (or 21.8% before the effects of
adopting IFRS 9 and 15) and 21.5% of revenues for the six months ended
June 30, 2018 and 2017, respectively. The increase in SG&A expenses for
the six months ended June 30, 2018 was primarily attributable to the
acquisitions of Eclipse, Thistle, BOLDER Graphics and Perennial, one
time business reorganization costs of $0.8 million, additional
professional fees and higher sales commission costs commensurate with
the increase in revenues.

Restructuring Expenses

For the quarter ended June 30, 2018, DCM incurred restructuring expenses
of $0.7 million compared to $1.7 million in the same period in 2017. The
restructuring expenses of $0.7 million during the quarter ended June 30,
2018 primarily related to headcount reductions across the operational,
sales and administration functions of the business. For the quarter
ended June 30, 2017, DCM incurred restructuring expenses of $1.7 million
of which $1.5 million primarily related to headcount reductions across
the sales and customer service functions of the business and a lease
exit charge of $0.3 million associated with the closure of its
manufacturing and warehouse facility in Regina, Saskatchewan.

For the six months ended June 30, 2018, DCM incurred net restructuring
expenses $0.8 million compared to $3.6 million in the same period in
2017. DCM incurred $1.9 million of restructuring costs related to 1)
headcount reductions in indirect labour as a result of the plant
consolidations completed during the current quarter, in addition to
reductions of certain individuals within the sales and administrative
functions, and 2) costs incurred to facilitate the closure and
consolidation of the Multiple Pakfold, BOLDER Graphics and Granby,
Quebec facilities into DCM's Brampton, Ontario, Calgary, Alberta and
Drummondville, Quebec facilities, respectively. Total restructuring
costs were offset by a recovery of $1.1 million related to the
termination of DCM's lease agreement for its Granby, Quebec facility

For the six months ended June 30, 2017, DCM incurred restructuring
expenses of $3.6 million. $3.7 million of restructuring costs were
incurred related to headcount reductions in DCM's indirect labour force
across its operations, which were designed to streamline DCM's
order-to-production process and across the sales and customer service
functions of the business. These restructuring costs were offset by a
recovery of $0.3 million related to a sub-lease of a closed facility in
Richmond Hill, Ontario and DCM also incurred a lease exit charge
associated with the closure of its manufacturing and warehouse facility
in Regina, Saskatchewan of $0.3 million.

Adjusted EBITDA

For the quarter ended June 30, 2018, Adjusted EBITDA was $4.1 million,
or 5.2% of revenues, after adjusting EBITDA for the $0.7 million in
restructuring charges, $0.3 million of acquisition costs and $0.8
million of one-time business reorganization costs. Excluding the effects
of adopting IFRS 9 and 15, Adjusted EBITDA was $4.6 million or 6.0% of
revenues for the quarter ended June 30, 2018 compared with an Adjusted
EBITDA of $4.3 million or 5.8% for the same period last year. Adjusted
EBITDA for the three months ended June 30, 2018 decreased $0.2 million
or 3.9% from the same period in the prior year which was 5.8% of
revenues in 2017. The decrease in Adjusted EBITDA for the three months
ended June 30, 2018 was primarily attributable to lower gross profit as
a result of product mix and higher SG&A expenses. This was partially
offset by improved pricing discipline and cost savings from
restructuring efforts carried out in the second half of 2017.

For the six months ended June 30, 2018, Adjusted EBITDA was $10.4
million, or 6.3% of revenues, after adjusting EBITDA for the $0.8
million in restructuring charges, $0.3 million of acquisition costs and
$1.2 million of one-time business reorganization costs. Excluding the
effects of adopting IFRS 9 and 15, Adjusted EBITDA was $9.9 million or
6.1% of revenues for the six months ended June 30, 2018 compared with an
Adjusted EBITDA of $7.2 million or 5.0% for the same period last year.
The $3.3 million increase in Adjusted EBITDA for the six months ended
June 30, 2018 over the six months of 2017 was attributable to higher
gross profit as a result of revenues contributed by DCM's core business,
in addition to the Eclipse, Thistle, BOLDER Graphics and Perennial
acquisitions, improved pricing initiatives implemented part-way through
the prior year, and cost savings from the restructuring efforts carried
out in the second half of 2017. This was partially offset by higher SG&A
expenses.

Interest Expense

Interest expense, including interest on debt outstanding under DCM's
credit facilities, on certain unfavourable lease obligations related to
closed facilities, and on DCM's employee benefit plans and including
interest accretion expense related to certain debt obligations recorded
at fair value, was $1.3 million for the three months ended June 30, 2018
compared to $1.2 million for the same period in 2017, and was $2.4
million for the six months ended June 30, 2018 compared to $2.1 million
for the same period in 2017. Interest expense for the three and six
months ended June 30, 2018 was higher than the same periods in the prior
year primarily due to the increase in the debt outstanding under DCM's
credit facilities in order to fund a portion of the upfront cash
components of the purchase price, settle certain debt assumed and pay
for related costs incurred to complete the acquisitions of Eclipse,
Thistle and BOLDER Graphics in 2017 and the acquisition of Perennial in
2018.

Income Taxes

DCM reported a loss before income taxes of $1.6 million and a net income
tax recovery of $0.4 million for the quarter ended June 30, 2018
compared to a loss before income taxes of $2.6 million and a net income
tax recovery of $0.2 million for the quarter ended June 30, 2017.
Excluding the impacts of adopting IFRS 9 and 15, the net income tax
recovery was $0.3 million for the quarter ended June 30, 2017. The
current income tax recovery and expense were primarily related to the
income taxes payable on DCM's estimated taxable income for the quarters
ended June 30, 2018, and 2017, respectively. The deferred income tax
recoveries primarily related to changes in estimates of future reversals
of temporary differences and new temporary differences that arose during
the quarters ended June 30, 2018 and 2017, respectively.

DCM reported income before income taxes of $0.8 million and a net income
tax expense of $0.3 million for the six months ended June 30, 2018
compared to a loss before income taxes of $3.3 million and a net income
tax recovery of $0.7 million for the six months ended June 30, 2017.
Excluding the impacts of adopting IFRS 9 and 15, the net income tax
expense was $0.1 million for the six months ended June 30, 2018. The
current income tax expense was due to the taxes payable on DCM's
estimated taxable income for the six months ended June 30, 2018. The
deferred income tax recovery for the six months ended June 30, 2018
primarily relates to changes in estimates of future reversals of
temporary differences, primarily representing adjustments due to the
adoption of IFRS 15 including the full utilization of loss carryforwards
and new temporary differences that arose during the six month period
ended June 30, 2018.

Net Income

Net loss for the quarter ended June 30, 2018 was $1.2 million compared
to net loss of $2.1 million for the same period in 2017. Excluding the
impacts of adopting IFRS 9 and 15, net loss for the quarter ended June
30, 2018 was $0.8 million. The decrease in comparable profitability for
the quarter ended June 30, 2018 was primarily due to lower gross profit
as a percentage of revenue, due to higher volumes of lower margin
product and higher levels of SG&A including the post-acquisition
financial results of Eclipse, Thistle, BOLDER Graphics and Perennial,
and was partially offset by refined discipline in DCM's pricing strategy
and cost reductions as a result of the restructuring efforts.

Net income for the six months ended June 30, 2018 was $0.6 million
compared to a net loss of $2.7 million for the same period in 2017.
Excluding the impacts of adopting IFRS 9 and 15, for the six months
ended June 30, 2018 was $0.2 million. The decrease in comparable
profitability the six months ended June 30, 2018 was primarily due to
the increase in revenues which included the post-acquisition financial
results of Eclipse, Thistle, BOLDER Graphics and Perennial, in addition
to a refined discipline in DCM's pricing strategy and cost reductions as
a result of the restructuring efforts. This increase was partially
offset by lower gross profit as a percentage of revenue, due to higher
volumes of lower margin product and higher levels of SG&A including the
post-acquisition financial results of Eclipse, Thistle, BOLDER Graphics
and Perennial.

Adjusted Net Income

Adjusted net income for the quarter ended June 30, 2018 was $0.2 million
compared to Adjusted net income of $0.7 million for the same period in
2017. Excluding the impacts of adopting IFRS 9 and 15, Adjusted net
income for the quarter ended June 30, 2018 was $0.6 million. The
decrease in comparable profitability for the quarter ended June 30, 2018
was primarily due to lower gross profit as a percentage of revenue, due
to higher volumes of lower margin product and higher levels of SG&A
including the post-acquisition financial results of Eclipse, Thistle,
BOLDER Graphics and Perennial, and was partially offset by refined
discipline in DCM's pricing strategy and cost reductions as a result of
the restructuring efforts.

Adjusted net income for the six months ended June 30, 2018 was $2.3
million compared to Adjusted net income of $1.0 million for the same
period in 2017. Excluding the impacts of adopting IFRS 9 and 15, for the
six months ended June 30, 2018 was $1.9 million. The increase in
comparable profitability for the six months ended June 30, 2018 was
primarily due to the increase in revenues which included the
post-acquisition financial results of Eclipse, Thistle, BOLDER Graphics
and Perennial, in addition to a refined discipline in DCM's pricing
strategy and cost reductions as a result of the restructuring efforts.
This increase was partially offset by lower gross profit as a percentage
of revenue, due to higher volumes of lower margin product and higher
levels of SG&A including the post-acquisition financial results of
Eclipse, Thistle, BOLDER Graphics and Perennial.

CASH FLOW FROM OPERATIONS

During the three months ended June 30, 2018, cash flows generated by
operating activities were $5.8 million compared to cash flows generated
by operating activities of $3.9 million during the same period in 2017.
$2.7 million of current year cash flows resulted from operations, after
adjusting for non-cash items, compared with $3.3 million in 2017.
Current period cash flows from operations were positively impacted by
the increase in revenues and better gross margins from improved pricing
discipline however this was slightly offset by a $2.0 million increase
in SG&A expense over the prior year comparative period. Changes in
working capital during the three months ended June 30, 2018 generated
$5.4 million in cash compared with $2.7 million in the prior year. Given
the increase in trade receivables as a result of higher sales in the
current quarter, there was a corresponding increase in accounts payable
for higher volumes in inventory purchases and related manufacturing
costs. Timing of payments to suppliers are fairly commensurate with
collections on outstanding receivables from DCM's customers.

In addition, $1.8 million of cash was used to make payments primarily
related to severances and lease termination costs, compared with $1.7
million of payments in 2017. Contributions made to the Company's pension
plans were $0.3 million which decreased from $0.5 million in the prior
year while income tax payments increased by $0.3 million for the three
months ended June 30, 2018.

During the six months ended June 30, 2018, cash flows generated by
operating activities were $11.9 million compared to cash flows generated
by operating activities of $2.3 million during the same period in 2017.
A total of $8.2 million of the current period cash flows resulted from
operations, after adjusting for non-cash items, compared with $4.7
million for the same period last year. Current period cash flows from
operations were positively impacted by the increase in revenues and
better gross margins from improved pricing discipline however this was
slightly offset by a $4.7 million increase in SG&A expense over the
prior year comparative period. Changes in working capital during the six
months ended June 30, 2018 generated $9.1 million in cash compared with
$1.8 million of cash generated in the prior year. There was an increase
in accounts payable for higher volumes in inventory purchases and
related manufacturing costs as a result of higher revenues during the
six month period ended June 30, 2018.

In addition, $3.9 million of cash was used to make payments primarily
related to severances and lease termination costs, compared with $3.3
million of payments in 2017. Contributions made to the Company's pension
plans were $0.6 million, which decreased from $0.9 million in the prior
year while income tax payments increased by $0.9 million for the six
months ended June 30, 2018.

INVESTING ACTIVITIES

During the three months ended June 30, 2018, $9.8 million in cash flows
were used for investing activities compared with $1.7 million during the
same period in 2017. In 2018, $0.7 million of cash was used to invest in
IT equipment, in addition to incurring certain costs for leasehold
improvements to facilitate the consolidation of the Granby, Québec and
BOLDER Graphics facilities into DCM's Drummondville, Quebec and Calgary,
Alberta locations, respectively. Furthermore, $1.6 million of cash was
used to further invest in DCM's ERP project. In 2018, $7.5 million of
net cash was used to acquire the business of Perennial.

During the six months ended June 30, 2018, $11.2 million in cash flows
were used for investing activities compared with $6.6 million during the
same period in 2017. In 2018, $1.3 million of cash was used to invest in
IT equipment, in addition to incurring certain costs for leasehold
improvements to facilitate the consolidation of the Multiple Pakfold,
Granby, Québec and BOLDER Graphics facilities into DCM's Brampton,
Ontario, Drummondville, Quebec and Calgary, Alberta locations,
respectively. Furthermore, $2.5 million of cash was used to further
invest in DCM's ERP project. In 2018, $7.5 million of net cash was used
to acquire the business of Perennial.

FINANCING ACTIVITIES

During the three months ended June 30, 2018, cash flow generated by
financing activities was $4.7 million compared to cash flow used for
financing activities of $5.0 million during the same period in 2017. DCM
used net cash received from the issuance of common shares and warrants
of $0.7 million and cash from advances under its credit facilities
totaling $10.4 million to repay $4.8 million in outstanding principal
amounts under its credit facilities. DCM also paid a total of $0.6
million related to the promissory notes issued in connection with the
acquisitions of Thistle Eclipse and BOLDER. DATA also incurred $0.9
million of transaction costs related to the amendments to its senior
credit facilities and the establishment of a new credit facility.

During the six months ended June 30, 2018, cash flow used for financing
activities was $0.1 million compared to cash flow generated by financing
activities of $1.9 million during the same period in 2017. DCM used a
portion of cash generated from its operations to repay $6.7 million in
outstanding principal amounts under its various credit facilities and
paid a total of $3.4 million related to the promissory notes issued in
connection with the acquisitions of Thistle, Eclipse and BOLDER. DATA
also incurred $0.9 million of transaction costs related to the
amendments to its senior credit facilities and the establishment of a
new credit facility.

OUTLOOK

In the second quarter of 2018, DCM continued to experience higher
revenues over the prior year as a result of modest growth in its core
business, combined with incremental revenue from the acquisitions made
in 2017 and the first half of 2018. DCM maintains the 2018 financial
outlook it issued in February 2018, buoyed by continued revenue growth
trends, expanding opportunities within its existing customer base and
new customer wins, particularly as a leading supplier in the emerging
market for Health Canada compliant packaging labels in the licensed
cannabis market.

Despite lower margins experienced in the second quarter compared to the
first quarter, and price and inflationary pressures the Company is
experiencing, DCM continues to realize gross margin improvements on
non-contracted business and expects significantly improved margins in
the packaging label business and other newly contracted business in the
second half of the year, which is typically seasonally stronger in any
event.

Revenues

DCM anticipates total revenues of between $295.0 million and $310.0
million for fiscal 2018, representing growth of approximately 2% to 7%
compared to revenues of $289.5 million in fiscal 2017.

Adjusted EBITDA

Adjusted EBITDA for fiscal 2018 is estimated to be between $22.0 million
and $25.0 million compared to Adjusted EBITDA in fiscal 2017 of $16.1
million.

Capital Expenditures

For fiscal 2018, DCM presently expects to spend approximately $1.5
million on capital expenditures. DCM expects to incur approximately $3.0
million mostly relating to the ERP project which will be incurred
primarily through the first three quarters of 2018.

As part of establishing the above guidance, DCM made the following
assumptions:

  • New customer wins and sales initiatives focused on capturing greater
    wallet share from DCM's existing customer base, including increasingly
    capitalizing on its technology-enabled value-added services provided
    to customers, will offset continued expected declines in the Company's
    traditional business communications market;
  • DCM will benefit from the full-year results of the acquisitions of
    Eclipse, Thistle and BOLDER Graphics and continue to experience growth
    rates in each of those businesses consistent with the past year, and
    DCM will benefit from the partial year of results from the acquisition
    of Perennial, commencing May 8, 2018.
  • The three acquisitions DCM completed in 2017 will continue to generate
    incremental cross-selling opportunities and cost synergies across the
    entire business of the Company in 2018, as will the acquisition of
    Perennial in May 2018;
  • DCM will be able to translate its sales pipeline into new customer
    acquisitions;
  • Improved year over year margins will be achieved through ongoing
    strategic initiatives relating to productivity improvements and
    continuing efforts by management to drive improved profitability;
  • DCM will be able to effect increases in the prices of products sold to
    customers to mitigate increases in the costs of paper, and
    consumables, CPI and freight charges that are being experienced
    industry-wide and longer-term realize higher margins with these
    customers, while experiencing nominal if any volume loss;
  • The Company continues to explore additional strategic acquisition
    opportunities, and, while there can be no certainty that any such
    opportunities will be completed, such acquisitions could impact the
    outlook provided;
  • Economic conditions in North America will not deteriorate; and
  • The above guidance is based on the accounting policies applied in the
    unaudited interim consolidated financial statements and accompanying
    notes of DCM for the second quarter of 2018 and IFRS in effect for the
    period ended June 30, 2018.

DCM cautions that the assumptions used to prepare the guidance provided
above, although currently reasonable, may prove to be incorrect or
inaccurate. Accordingly, actual results may differ materially from
expectations as set forth above. The guidance provided above should be
read in conjunction with, and is qualified by, the section
Forward-looking Statements contained in this press release.

About DATA Communications Management Corp.

DCM is a communication solutions partner that adds value for major
companies across North America by creating more meaningful connections
with their customers. We pair customer insights and thought leadership
with cutting-edge products, modular enabling technology and services to
power our clients' go-to market strategies. We help our clients manage
how their brands come to life, determine which channels are right for
them, manage multimedia campaigns, deploy location-specific and 1:1
marketing, execute custom loyalty programs, and fulfill their commercial
printing needs all in one place.

Our extensive experience has positioned us as experts at providing
communication solutions across many verticals, including the financial,
retail, healthcare, consumer health, energy, and not-for-profit sectors.
Thanks to our locations throughout Canada and in the United States
(Chicago, Illinois and New York, New York), we are able to meet our
clients' varying needs with scale, speed, and efficiency - no matter how
large or complex the ask. And we can do it all with advanced DCM
security, regulatory compliance, and bilingual communications, in print
or digital.

Additional information relating to DATA Communications Management Corp.
is available on www.datacm.com,
and in the disclosure documents filed by DATA Communications Management
Corp. on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release constitute "forward-looking"
statements that involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance, objectives or
achievements of DCM, or industry results, to be materially different
from any future results, performance, objectives or achievements
expressed or implied by such forward-looking statements. When used in
this press release, words such as "may", "would", "could", "will",
"expect", "anticipate", "estimate", "believe", "intend", "plan", and
other similar expressions are intended to identify forward-looking
statements. These statements reflect DCM's current views regarding
future events and operating performance, are based on information
currently available to DCM, and speak only as of the date of this press
release. These forward-looking statements involve a number of risks,
uncertainties and assumptions and should not be read as guarantees of
future performance or results, and will not necessarily be accurate
indications of whether or not such performance or results will be
achieved. Many factors could cause the actual results, performance,
objectives or achievements of DCM to be materially different from any
future results, performance, objectives or achievements that may be
expressed or implied by such forward-looking statements. The principal
factors, assumptions and risks that DCM made or took into account in the
preparation of these forward-looking statements include: the limited
growth in the traditional printing industry and the potential for
further declines in sales of DCM's printed business documents relative
to historical sales levels for those products; the risk that changes in
the mix of products and services sold by DCM will adversely affect DCM's
financial results; the risk that DCM may not be successful in reducing
the size of its legacy print business, realizing the benefits expected
from restructuring and business reorganization initiatives, reducing
costs, reducing and repaying its long-term debt, and growing its digital
and marketing communications businesses; the risk that DCM may not be
successful in managing its organic growth; DCM's ability to invest in,
develop and successfully market new digital and other products and
services; competition from competitors supplying similar products and
services, some of whom have greater economic resources than DCM and are
well-established suppliers; DCM's ability to grow its sales or even
maintain historical levels of its sales of printed business documents;
the impact of economic conditions on DCM's businesses; risks associated
with acquisitions by DCM; the failure to realize the expected benefits
from the acquisitions of Thistle Printing, Eclipse Colour & Imaging,
BOLDER Graphics and Perennial Group of Companies and risks associated
with the integration of such acquired businesses; risks related to the
disruption of management time from ongoing business operations due to
the acquisition of the Perennial Group of Companies; increases in the
costs of paper and other raw materials used by DCM; and DCM's ability to
maintain relationships with its customers. Additional factors are
discussed elsewhere in this press release and under the headings "Risk
Factors" and "Risks and Uncertainties" in DCM's management's discussion
and analysis and in DCM's other publicly available disclosure documents,
as filed by DCM on SEDAR (www.sedar.com).
Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the forward-looking statements prove
incorrect, actual results may vary materially from those described in
this press release as intended, planned, anticipated, believed,
estimated or expected. Unless required by applicable securities law, DCM
does not intend and does not assume any obligation to update these
forward-looking statements.

NON-IFRS MEASURES

This press release includes certain non-IFRS measures as supplementary
information. Except as otherwise noted, when used in this press release,
EBITDA means earnings before interest and finance costs, taxes,
depreciation and amortization and Adjusted net income (loss) means net
income (loss) adjusted for the impact of certain non-cash items and
certain items of note on an after-tax basis. Adjusted EBITDA means
EBITDA adjusted for restructuring expenses, one-time business
reorganization costs, goodwill impairment charges, gain on redemption of
convertible debentures, and acquisition costs. Adjusted net income
(loss) means net income (loss) adjusted for restructuring expenses,
one-time business reorganization costs, goodwill impairment charges,
gain on redemption of convertible debentures, acquisition costs and the
tax effects of those items. Adjusted net income (loss) per share (basic
and diluted) is calculated by dividing Adjusted net income (loss) for
the period by the weighted average number of common shares (basic and
diluted) outstanding during the period. In addition to net income
(loss), DCM uses non-IFRS measures including Adjusted net income (loss),
Adjusted net income (loss) per share, EBITDA and Adjusted EBITDA to
provide investors with supplemental measures of DCM's operating
performance and thus highlight trends in its core business that may not
otherwise be apparent when relying solely on IFRS financial measures.
DCM also believes that securities analysts, investors, rating agencies
and other interested parties frequently use non-IFRS measures in the
evaluation of issuers. DCM's management also uses non-IFRS measures in
order to facilitate operating performance comparisons from period to
period, prepare annual operating budgets and assess its ability to meet
future debt service, capital expenditure and working capital
requirements. Adjusted net income (loss), Adjusted net income (loss) per
share, EBITDA and Adjusted EBITDA are not earnings measures recognized
by IFRS and do not have any standardized meanings prescribed by IFRS.
Therefore, Adjusted net income (loss), Adjusted net income (loss) per
share, EBITDA and Adjusted EBITDA are unlikely to be comparable to
similar measures presented by other issuers.

Investors are cautioned that Adjusted net income (loss), Adjusted net
income (loss) per share, EBITDA and Adjusted EBITDA should not be
construed as alternatives to net income (loss) determined in accordance
with IFRS as an indicator of DCM's performance. For a reconciliation of
net income (loss) to EBITDA and a reconciliation of net income (loss) to
Adjusted EBITDA, see Table 2 above. For a reconciliation of net income
(loss) to Adjusted net income (loss) and a presentation of Adjusted net
income (loss) per share, see Table 3 above.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

         
(in thousands of Canadian dollars, unaudited)   June 30, 2018
$
  December 31, 2017
$
   
Assets
Current assets
Trade receivables 70,067 41,193
Inventories 10,052 36,519
Prepaid expenses and other current assets 3,283     5,092  
83,402 82,804
Non-current assets
Other non-current assets 454

-

Deferred income tax assets 2,899 6,108
Restricted cash 515 515
Property, plant and equipment 17,900 18,831
Pension assets 2,010 760
Intangible assets 17,553 14,473
Goodwill 16,915     8,368  
 
141,648     131,859  
 
Liabilities
Current liabilities
Bank overdraft 2,164 2,868
Trade payables and accrued liabilities 41,508 34,306
Current portion of credit facilities 5,480 8,725
Current portion of promissory notes 4,823 4,374
Provisions 3,188 3,950
Income taxes payable 2,627 3,188
Deferred revenue 2,129     11,237  
61,919 68,648
Non-current liabilities
Provisions 475 2,702
Credit facilities 53,597 47,207
Promissory notes 1,494 2,829
Deferred income tax liabilities 1,985 1,295
Other non-current liabilities 3,688 3,413
Pension obligations 7,850 8,133
Other post-employment benefit plans 3,165     3,031  
134,173     137,258  
 
Equity
Shareholders' equity/(deficit)
Shares 251,217 248,996
Warrants 806 287
Contributed surplus 1,633 1,368
Translation reserve 220 183
Deficit (246,401 )   (256,233 )
7,475     (5,399 )
 
141,648     131,859  
 

CONSOLIDATED STATEMENTS OF OPERATIONS

         

(in thousands of Canadian dollars, except per share amounts,

  For the three months   For the three months

unaudited)

ended June 30, 2018

ended June 30, 2017
    $   $
 
Revenues 78,176 73,066
 
Cost of revenues 59,587     55,062  
 
Gross profit 18,589     18,004  
 
Expenses
Selling, commissions and expenses 9,200 8,690
General and administration expenses 8,550 7,025
Restructuring expenses 736 1,735
Acquisition costs 270     13  
18,756     17,463  
 
(Loss) income before finance costs and income taxes (167 ) 541
 
Finance costs (income)
Interest expense 1,273 1,181
Interest income (2 )

-

Amortization of transaction costs 158     121  
1,429     1,302  
 
Loss before income taxes (1,596 )   (761 )
 
Income tax (recovery) expense
Current (288 ) 288
Deferred (114 )   (468 )
(402 )   (180 )
 
Net loss for the period (1,194 )   (581 )
 
Basic loss per share (0.06 )   (0.04 )
 
Diluted loss per share (0.06 )   (0.04 )
 

CONSOLIDATED STATEMENTS OF OPERATIONS

         

(in thousands of Canadian dollars, except per share amounts,

  For the six months   For the six months

unaudited)

ended June 30, 2018 ended June 30, 2017
    $   $
 
Revenues 166,692 143,192
 
Cost of revenues 126,628     108,828  
 
Gross profit 40,064     34,364  
 
Expenses
Selling, commissions and expenses 19,661 17,208
General and administration expenses 15,761 13,531
Restructuring expenses 800 3,621
Acquisition costs 313     969  
36,535     35,329  
 
Income (loss) before finance costs and income taxes 3,529 (965 )
 
Finance costs (income)
Interest expense 2,412 2,131
Interest income (4 )
Amortization of transaction costs 301     236  
2,709     2,367  
 
Income (loss) before income taxes 820     (3,332 )
 
Income tax (recovery) expense
Current 555 339
Deferred (304 )   (993 )
251     (654 )
 
Net income (loss) for the period 569     (2,678 )
 
Basic earnings (loss) per share 0.03     (0.20 )
 
Diluted earnings (loss) per share 0.03     (0.20 )
 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

         

(in thousands of Canadian dollars, unaudited)

  For the three months   For the three months
ended June 30, 2018 ended June 30, 2017
    $   $
 
Net loss for the period (1,194 )   (581 )
 
 
Other comprehensive income (loss):
 
Items that may be reclassified subsequently to net loss
Foreign currency translation 15     (56 )
15     (56 )
 
Items that will not be reclassified to net loss
Re-measurements of pension and other post-employment benefit
obligations
891 (758 )
Taxes related to pension and other post-employment benefit
adjustment above
(232 )   197  
659     (561 )
 
Other comprehensive income (loss) for the period, net of tax 674     (617 )
 
Comprehensive loss for the period (520 )   (1,198 )
 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

         

(in thousands of Canadian dollars, unaudited)

  For the six months   For the six months
ended June 30, 2018 ended June 30, 2017
    $   $
 
Net income (loss) for the period 569     (2,678 )
 
 
Other comprehensive loss:
 
Items that may be reclassified subsequently to net income (loss)
Foreign currency translation 37     (74 )
37     (74 )
 
Items that will not be reclassified to net income (loss)
Re-measurements of pension and other post-employment benefit
obligations
1,214 (2,103 )
Taxes related to pension and other post-employment benefit
adjustment above
(316 )   547  
898     (1,556 )
 
Other comprehensive income (loss) for the period, net of tax 935     (1,630 )
 
Comprehensive income (loss) for the period 1,504     (4,308 )
 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

                             

(in thousands of Canadian dollars,

      Conversion   Contributed   Translation     Total equity

unaudited)

Shares Warrants options surplus reserve Deficit (deficit)
    $   $   $       $   $   $
 
Balance as at December 31, 2016 237,432    

-

    128     1,164     258     (248,917 )   (9,935 )
 
Net loss for the period

-

-

-

-

-

(2,678 ) (2,678 )
Other comprehensive loss for the period

-

   

-

   

-

   

-

    (74 )   (1,556 )   (1,630 )
Total comprehensive loss for the period

-

   

-

   

-

   

-

    (74 )   (4,234 )   (4,308 )
 
Shares issued on the redemption of convertible debentures

-

-

(128 ) 128

-

-

-

Cancellation of convertible debentures

-

-

-

-

-

-

-

Issuance of common shares 10,662 280

-

(15 )

-

-

10,927
Share-based compensation expense

-

   

-

   

-

    59    

-

   

-

    59  
 
Balance as at June 30, 2017 237,432    

-

   

-

    1,292     184     (253,151 )   (14,243 )
 
 
Balance as at December 31, 2017 248,996     287    

-

    1,368     183     (256,233 )   (5,399 )
Impact of change in accounting policy

-

   

-

   

-

   

-

   

-

    8,365     8,365  
248,996     287    

-

    1,368     183     (247,868 )   2,966  
 
Net income for the period

-

-

-

-

-

569 569
Other comprehensive income for the period

-

   

-

   

-

   

-

    37     898     935  
Total comprehensive income for the period

-

   

-

   

-

   

-

    37     1,467     1,504  
 
Issuance of common shares and warrants, net 2,221 519

-

-

-

-

2,740
Share-based compensation expense

-

   

-

   

-

    265    

-

   

-

    265  
 
Balance as at June 30, 2018 251,217     806    

-

    1,633     220     (246,401 )   7,475  
 

CONSOLIDATED STATEMENTS OF CASH FLOWS

         

(in thousands of Canadian dollars, unaudited)

  For the three months   For the three months
ended June 30, 2018 ended June 30, 2017
    $   $
 
Cash provided by (used in)
 
Operating activities        
Net loss for the period (1,194 ) (581 )
Adjustments to net loss
Depreciation of property, plant and equipment 1,176 1,058
Amortization of intangible assets 1,232 906
Share-based compensation expense 171 7
Pension expense 135 135
(Gain) loss on disposal of property, plant and equipment (5 ) 42
Write-off of intangible assets 242

-

Provisions 870 1,735
Amortization of transaction costs 158 121
Accretion of non-current liabilities and related interest expense 150 219
Other non-current liabilities 120 (248 )
Other post-employment benefit plans, net 67 55
Income taxes recovery (402 )   (180 )
2,720 3,269
Changes in working capital 5,418 2,721
Contributions made to pension plans (304 ) (453 )
Provisions paid (1,769 ) (1,653 )
Income taxes paid (278 )   (5 )
5,787     3,879  
 
Investing activities        
Purchase of property, plant and equipment (665 ) (811 )
Purchase of intangible assets (1,616 ) (846 )
Proceeds on disposal of property, plant and equipment 26 2
Net cash consideration for acquisition of businesses (7,505 )  

-

 
(9,760 )   (1,655 )
 
Financing activities        
Issuance of common shares and warrants, net 685 8,080
Proceeds from credit facilities 10,395 3,500
Repayment of credit facilities (4,816 ) (4,003 )
Repayment of convertible debentures

-

(11,175 )
Repayment of other liabilities (100 ) (166 )
Repayment of promissory notes (585 ) (935 )
Transaction costs (863 ) (288 )
Finance lease payments (6 )   (18 )
4,710     (5,005 )
 
Decrease in (bank overdraft) / (decrease) in cash and cash
equivalents during the period
  737     (2,781 )
(Bank overdraft) cash and cash equivalents – beginning of period   (2,916 )   1,838  
Effects of foreign exchange on cash balances   15     (46 )
Bank overdraft – end of period   (2,164 )   (989 )
 

CONSOLIDATED STATEMENTS OF CASH FLOWS

         

(in thousands of Canadian dollars, unaudited)

  For the six months   For the six months
ended June 30, 2018 ended June 30, 2017
    $   $
 
Cash provided by (used in)
 
Operating activities        
Net income (loss) for the period 569 (2,678 )
Adjustments to net income (loss)
Depreciation of property, plant and equipment 2,324 1,943
Amortization of intangible assets 2,301 1,599
Share-based compensation expense 265 59
Pension expense 269 270
(Gain) loss on disposal of property, plant and equipment (129 ) 22
Write-off of intangible assets 242

-

Provisions 934 3,621
Amortization of transaction costs 301 236
Accretion of non-current liabilities and related interest expense 311 317
Other non-current liabilities 446 (118 )
Other post-employment benefit plans, net 134 110
Income tax expense (recovery) 251     (654 )
8,218 4,727
Changes in working capital 9,107 1,836
Contributions made to pension plans (588 ) (912 )
Provisions paid (3,923 ) (3,340 )
Income taxes paid (894 )   (5 )
11,920     2,306  
 
Investing activities        
Purchase of property, plant and equipment (1,286 ) (948 )
Purchase of intangible assets (2,518 ) (1,079 )
Proceeds on disposal of property, plant and equipment 150 22
Net cash consideration for acquisition of businesses (7,505 )   (4,638 )
(11,159 )   (6,643 )
 
Financing activities        
Issuance of common shares and warrants, net 685 8,069
Proceeds from credit facilities 10,395 17,089
Repayment of credit facilities (6,695 ) (7,601 )
Repayment of convertible debentures

-

(11,175 )
Repayment of other liabilities (201 ) (455 )
Repayment of promissory notes (3,393 ) (1,064 )
Transaction costs (868 ) (605 )
Finance lease payments (13 )   (2,400 )
(90 )   1,858  
 
Decrease in (bank overdraft) / (decrease) in cash and cash
equivalents during the period
  671     (2,479 )
(Bank overdraft) cash and cash equivalents – beginning of period   (2,868 )   1,544  
Effects of foreign exchange on cash balances   33     (54 )
Bank overdraft – end of period   (2,164 )   (989 )
 

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