RE:Q1 results - Exiting the old, Entering the newThe Adjusted EBITDA of $5.5 million (ex IFRS 16) was what I expected. I think it was a tough comp and I think the company is navigating the current environment very well.
Q1 will likely be the only negative comp for the year. Margins in Q2 and Q3 of last year were pressured by hgiher paper prices and unfavorable pass-through mechanisms. With new sources of revenue, operating efficiencies from restructuring, and the implementation of the ERP in the 2H, I think we'll see decent EBITDA growth for the remainder of the year. Overall, I think DCM can generate EBITDA of between $22 million and $25 million in 2019 (again, ex IFRS 16).
The company is also looking to pay $10 million of fixed-term debt and $4 million in promissory notes this year. Combined, that's a good proxy for free cash flow expectations.
Putting that all together -- I think the stock should grind higher from here. But the more meaningful move up will likely come when the company has sufficiently delevered such that capital deployment could become a positive catalyst (either buybacks or acquisitions)...and that's in the 2H of this year...