Data Communications Management, Brampton, Ont., reports continued momentum in the second quarter of 2023 with revenue up 74.7 per cent, and gross profit up 56.7 per cent, compared to the second quarter of 2022, respectively. Year over year growth is primarily driven by the acquisition of Moore Canada Corporation (MCC). The combined business achieved growth from expansion revenue with existing clients, new client wins, and continuing progress passing raw material increases on to customers.
Revenue for the second quarter of 2023 was up $50.9 million vs. Q2 year ago (YA), for total revenues of $119 million.
Gross profit accelerated by $11.6 million for a total of $32 million. Gross profit margin was 26.9 per cent for the second quarter of 2023 vs. 30.0 per cent YA. As expected, the lower average gross margins of MCC contributed to a lower overall gross margin.
Adjusted EBITDA increased 48.6 per cent compared to last year, and was $13.8 million or 11.6 per cent of revenue vs. $9.3 million or 13.7 per cent of revenues YA. Adjusted EBITDA as a percentage of revenues declined due to the lower average gross margins of MCC.
Total net debt at the end of the second quarter of 2023 was $93.6 million (total debt less cash on hand), down more than 30 per cent since closing the MCC acquisition.
“Gross profit as a percentage of revenue for the second quarter of 2023 exceeded our expectations. The opportunity to enhance MCC profit margins was one of the key aspects of our acquisition deal logic and we have a clear plan in place to return our combined gross profit margins to pre-acquisition levels,” said a statement by company management.
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