Dye & Durham Announces Marketing of New Credit Facility

TORONTO, March 20, 2024 /CNW/ - Dye & Durham Limited ("Dye & Durham" or "Holdings"), (TSX: DND) today announced that Dye & Durham Corporation (the "Company"), a wholly-owned subsidiary of Holdings, commenced the marketing of a new senior secured Term Loan B facility and revolving credit facility (the "New Senior Secured Credit Facilities"). In conjunction with the New Senior Secured Credit Facilities, and subject to market and other conditions, the Company plans to launch the marketing of additional new secured debt (the "Additional Secured Debt", and together with the New Senior Secured Credit Facilities, the "Refinancing Transactions"). The Company intends to use the initial borrowings under the New Senior Secured Credit Facilities, together with the net proceeds of any Additional Secured Debt raised and cash on hand, to: (i) refinance the Company's existing credit facilities, (ii) repurchase some or all of the Company's 3.75% convertible senior unsecured debentures due 2026, and (iii) finance working capital needs and for general corporate purposes. The foregoing description and any other information regarding the potential of the Company incurring secured debt is included herein solely for informational purposes, and this press release is not an offer to sell any secured debt.

"This refinancing represents a significant milestone in our previously announced deleveraging plan as we continue to target less than four times total net debt to Adjusted EBITDA," said Matthew Proud, Chief Executive Officer of Dye & Durham. "Assuming the refinancing is successful, we will have significantly reduced our annual interest costs, increased free cash flow and positioned Dye & Durham well for future growth."

The refinancing of the Company's existing credit facilities will address the risk that its maturity is accelerated in the event that any of the Company's 3.75% convertible senior unsecured debentures due 2026 are outstanding as at September 30, 2025.

Financial Update

In connection with the planned Refinancing Transactions, Holdings has also disclosed the following financial information:

• Approximately $278 million of Further Adjusted EBITDA for the last twelve months (LTM) ending December 31, 2023.^1,2
• Organic Revenue Growth Rate of 3.0% year over year for the quarter ended December 31, 2023.²
• $118.6 million of annual recurring revenue ("ARR") for the period ending February 1, 2024, an increase of $6.5 million from the period ending December 31, 2023.²

1. Adjusted EBITDA was $250 million and net income was $(173) million over the same period. See below for a reconciliation of Further Adjusted EBITDA to Adjusted EBITDA.  Further Adjusted EBITDA takes into account the pre-acquisition results of businesses acquired in the twelve months ended December 31, 2023 and certain other efficiencies that have been identified and, in some cases, implemented by Dye & Durham, and which are described in more detail below under "Non-IFRS Financial Measures". There can be no assurance that Dye & Durham will be able to realize on some or all of these efficiencies.

2. Adjusted EBITDA, Further Adjusted EBITDA, Organic Revenue Growth Rate and ARR are 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. For further information and the relevant definitions, see the "Non-IFRS Financial Measures" section of this press release.

About Dye & Durham

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

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

Non-IFRS Measures

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 Dye & Durham's results of operations from management's perspective and to discuss Dye & Durham's financial outlook. Dye & Durham'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. Dye & Durham uses non-IFRS measures, including "Adjusted EBITDA", "Further Adjusted EBITDA", "Organic Revenue Growth Rate" and "ARR" (each as described below), to provide investors with supplemental measures of its operating performance and to eliminate items that management believes has 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. Dye & Durham's management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period. Dye & Durham 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 Dye & Durham's most recent Management's Discussion and Analysis, which is available on its profile on SEDAR+ at www.sedarplus.ca, 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

EBITDA means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes.

Adjusted EBITDA

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.

Further Adjusted EBITDA

Further Adjusted EBITDA further adjusts Adjusted EBITDA for the impact of (i) business acquired in the twelve months ended December 31, 2023 attributable to the portion of such period prior to the date of acquisition of each entity, inclusive of due diligence adjustments, (ii) the removal of the results of TM Group, which Holdings divested in Q1 2024 and (iii) platform consolidation, cost savings and other realized and reasonably anticipated synergies in respect of acquisitions consummated prior to December 31, 2023, as if such synergies had been fully realized as of January 1, 2023 and realized and reasonably anticipated cost savings derived from integration initiatives, including employee rationalization, operational efficiencies relating to IT infrastructure integration and IT outsourcing. Below is a reconciliation of Further Adjusted EBITDA to Adjusted EBITDA. 

(in millions)
Adjusted EBITDA		$250
Adjustments
Pre-Acquisition Reporting Results	$7
TM Group Divestiture	$(5)
Remaining Synergies	$26
Further Adjusted EBITDA	$278

 Organic Revenue Growth Rate

Organic Revenue Growth Rate is calculated by the total revenue in the current quarter period (excluding the pre-acquisition quarterly revenue of those acquisitions executed in the LTM period from December 31, 2023 and discontinued businesses) divided by the total revenue in the prior quarter period (excluding discontinued businesses). Below is a reconciliation of Organic Revenue to Revenue. 

(in millions)	Q2 2024	Q2 2023
Revenue	$110.2	$106.7
TM Group Revenue Pre-Divestiture	--	$(12.5)
Pre-Acquisition Reporting Results	$(14.3)	--
Discontinued Businesses	--	$(1.0)
Organic Revenue	$95.9	$93.1
Organic Revenue Growth Rate	3.0 %

ARR

Annual recurring revenue includes revenues from subscriptions and revenue from minimum spend contracts. Revenue derived from customers with contracts that include a minimum committed level (volume or spend) with a fixed term of 12 months or more is included in our calculation of ARR.

Forward-looking Statements

This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects Dye & Durham's current expectations regarding future events. 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. Specifically, forward-looking statements include, without limitation, statements regarding the Company's Refinancing Transactions, including the contemplated New Senior Secured Credit Facilities and any Additional Secured Debt incurrence, the use of proceeds therefrom and the realization of the efficiencies and synergies reflected in the Further Adjusted EBITDA measure. 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.

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dye & Durham's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the risk that the Company is unable to successfully market the New Senior Secured Credit Facilities and the Additional Secured Debt, such that one or both of such financings do not close or are not as successful as they are intended to be, the risk that the maturity of the Company's existing credit facilities accelerates, the risk that Dye & Durham is not able to realize the efficiencies and synergies reflected in the Further Adjusted EBITDA measure and the factors discussed under "Risk Factors" in Dye & Durham's most recent annual information form.

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 Dye & Durham 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 it or that it 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, Dye & Durham disclaims any intention or obligation or undertaking to update or revise any forward-looking information or to publicly announce the results of any revisions to any of those statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

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

SOURCE Dye & Durham Limited

Huss Hirji, VP, Investor Relations, Dye & Durham Limited, Email: [email protected], Phone: [phone]