DND Dye and Durham Limited

• Consistent Revenue Performance in the Face of Challenging Real Estate Markets
• Disciplined Capital Allocation as Evidenced by Substantial Issuer Bid and Focused M&A Strategy

TORONTO, Nov. 10, 2022 /CNW/ - Dye & Durham Limited ("Dye & Durham" or the "Company") (TSX: DND), a leading provider of cloud-based, efficient workflow software for legal and business professionals, today announced its financial results for the three months ended September 30, 2022.

"Our business continued to perform well during the first quarter, despite an extremely challenging real estate market in Canada," said Matt Proud, CEO of Dye & Durham. "Our results underscore the fact that our Company is well diversified geographically and across product lines, which helps ensure resilient performance through difficult economic conditions. While 68% of our total revenue has exposure to real estate transaction volume, only 43% is exposed to Canadian real estate volumes and we have managed to perform well despite real challenges in that market. Given the very significant discount at which we currently trade, we believe the substantial issuer bid announced today is at present the best use of capital allocation to create long-term shareholder value."

First Quarter Fiscal 2023 Highlights

• Revenue of $120.2 million, an increase of $7.5 million, or 7%, from the same period in the prior year.
• 68% of revenue has exposure to real estate transactions in Canada, the UK and Ireland, and Australia.
• 43% of revenue has exposure to real estate transactions in Canada.
• Net loss of $(11.5) million, a decrease of $33.6 million, from the same period in the prior year.
• Adjusted EBITDA¹ of $64.4 million, an increase of $2.1 million, or 3%, from the same period in the prior year.

On November 10, 2022, the Board of Directors declared a quarterly dividend of $0.01875 per share to shareholders of record on November 16, 2022, payable on or about November 23, 2022.

Given the macro-economic environment remains exceptionally challenging and continues to deteriorate, the Company has decided it needs to act more aggressively and decisively to protect its business and financial position. As such, the Company will be implementing cost reduction initiatives to reduce its current operational costs by at least 10% commencing in the second quarter of fiscal 2023.

The Company is withdrawing the FY 2023 Adjusted EBITDA¹ target for the twelve-month period ended June 30, 2023, given the deteriorating macro-economic trends which are resulting in a lower number of real estate transactions in the markets the Company operates.

Dye & Durham announced today that the board of directors has approved the commencement of a substantial issuer bid (the "Offer") under which the Company will offer to repurchase for cancellation up to $150,000,000 million of its outstanding common shares ("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 $12.50 and not more than $15.00.

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 $150,000,000 million. The Company expects to announce the terms of the Offer and commence the Offer on November 11, 2022.

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 Computershare Investor Services Inc. 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 (collectively, the "Offer Documents") 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 at www.sedar.com.

Neither the Company nor its board of directors makes any recommendation to shareholders as to whether to tender or refrain from tendering any or all of their Common Shares to the Offer. This press release is neither an offer to purchase nor a solicitation of an offer to sell any Common Shares. The solicitation and the offer to purchase Common Shares by the Company is being made only pursuant to the Offer Documents. Shareholders of the Company are urged to read the Offer Documents carefully and to consult with their own financial, tax and legal advisors prior to making any decision with respect to the Offer.

The Company was authorized by the TSX to acquire up to a maximum of 3,457,508 Common Shares pursuant to a normal course issuer bid ("NCIB") that commenced on September 30, 2022 and expires on September 29, 2023. The Company has purchased 2,800,000 Common Shares through the NCIB to date. There will be no further purchases of Common Shares under the NCIB until after the expiry or termination of the Offer.

The Company will hold a conference call to discuss its business later today, Thursday, November 10, 2022, at 4:30 p.m. ET hosted by senior management. A question-and-answer session will follow the corporate update.

DATE: Thursday, November 10, 2022
TIME: 4:30 p.m. ET
DIAL-IN NUMBER: (416) 764-8659 or (888) 664-6392
REFERENCE NUMBER: 07368462
TAPED REPLAY: (416) 764-8677 or (888) 390-0541
REPLAY CODE: 368462#

This call is being webcast and can be accessed by going to:
https://app.webinar.net/nyNvgQzOQMz

1. Represents a non-IFRS measure. 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 the relevant definition, see the "Non-IFRS Financial Measures" section of this press release. Management believes non-IFRS measures, including Adjusted EBITDA, provide supplementary information to IFRS measures used in assessing the performance of the business. Please see "Cautionary Note Regarding Non-IFRS Measures" and "Select Information and Reconciliation of Non-IFRS Measures" in the Company's most recent Management's Discussion and Analysis, which is available on the Company's profile on SEDAR at www.sedar.com, for further details on certain non-IFRS measures, including relevant reconciliation of Adjusted EBITDA to its most directly comparable IFRS measure, which information is incorporated by reference herein.

Dye & Durham Limited is a leading provider of cloud–based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals. Dye & Durham provides critical information services and workflows, which clients use to manage their process, information and regulatory requirements. The Company has operations in Canada, the United Kingdom, Ireland and Australia, and has a strong blue-chip customer base that includes law firms, financial service institutions, and government organizations.

Additional information can be found at www.dyedurham.com.

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 the Company's results of operations from management's perspective and to discuss Dye & Durham's financial outlook. The Company'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. The Company uses non-IFRS measures, including "EBITDA" and "Adjusted EBITDA" (both as defined below), to provide investors with supplemental measures of its operating performance and to eliminate items that have 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. The Company 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 the Company's most recent Management's Discussion and Analysis, which is available on the Company's profile on SEDAR at www.sedar.com, 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 means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes. 

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.

This press release may contain forward-looking information and forward-looking statements within the meaning of applicable securities laws, which reflects the Company's current expectations regarding future events, including with respect to the Company's financial outlook and business strategy. 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. 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.

Specifically, statements regarding Dye & Durham's expectations of future results, performance, prospects, the markets in which we operate, or about the any future intention with regard to its business and acquisition strategies is forward-looking information. The forward-looking information is based on management's opinions, estimates and assumptions, including but not limited to those assumptions described under the heading "Caution Regarding Forward-Looking Information" in the Company's Management's Discussion and Analysis for the first quarter ended September 30, 2022. While these opinions, estimates and assumptions are considered by Dye & Durham to be appropriate and reasonable as of the date of this press release, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information. The forward looking information is subject to significant risks including, without limitation those risk factors discussed under the "Risk Factors" section of the Company's most recent annual information form, which is available under Dye & Durham's profile on SEDAR at www.sedar.com.  Many of these risks are beyond the Company's control.

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 the Company 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 the Company or that the Company 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, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

SOURCE Dye & Durham Limited