Being Realistic Going into Q4Supremex reported results last week that were just decent. The company commented that the Canada Post business directly related to its envelop business was down 7% in Q3 and had not changed materially (better or worse) in Q4.
If it hadn't been for the threat of a postal strike I think DCM would be much higher today. But the reality is that it happened and will likely have a lasting impact on the DCM business. More positively, it'll force the company to more quickly transition into "growth" businesses.
In Q4 last year, DCM generated adjusted EBITDA of $9 million. Despite cost reduction (and partial realization of cost reductions associated with the Edmonton facility), I think it would be approproriate to expect EBITDA to decline from last year. Again, I'm looking for EBITDA of $6 million.
Next year should be a much better year for the company as we get to see the full benefits of the cost reductions (and likely additional cost reductions) as well as the contributions from the acquired businesses. I'm forecasting $25 million of EBITDA next year.