Data Communications Management Corp T.DCM

Can Do $40 million in 2021 Ebitda

[nozzpack]

DCM had Ebitda of $10.2 million in Q3 continueing an uptrend as a result of effective cost compression that will save $10 million in operating costs in 2020.

Removing $2.8 million of CEWS funds, earned Ebitda was about $ $7.5 million in Q3.

Anualized, that's a run rate of $30 million per year .

DCM has forecast a further $8.5 million in operating costs in 2021.

This should elevate 2021 exit Ebitda run rate to $38.5 million .

Further, there will be substantial reductions in interest in 2021 as a result of debt paydowns in 2020.
Those will continue to be reduced in 2021, as debt payments accelerate , diminishing debt load to modest levels in 2021.

This supports my assertion that DCM has an excellent chance to deliver $40 million in Ebitda in 2021.

If so, DCM will exit 2021 with debt levels at or below $20 million .

This will progressively alter the risk profile of DCM throughout 2021, as it has in 2020.

With an Ebitda of about $0.90 per share on reasonably forecast performance in 2021, the upside to the current share price is 3-4 times the current share price..

[nozzpack]

Mine were close. It does now look very probable that debt will be below $20 million at exit 2021.

[KnowledgeSeekr8]

I think the numbers weren't bad at all for the year, considering where we were at the end of 2019 Some big improvements, gross margins are improving, cash generation is better, AR collections are better. But the biggest thing to me is the debt repayment of over $35 since March 2020 If they can even pay down another $15-$20 million in 2021, we could see this north of $1.50 by years end for

[knicksman]

With their line of credit largely paid off, they are generating more cash than is required by their scheduled payments for their term/amortized debt. If they can negotiate an accelerated payment that would be great. They ended 2020 with about $45 million of debt. I think they can generate $15 million of free cash flow next year (and maybe more if the BAR program has more legs). I think at $30

[vicario]

I'm not convinced the most recent M&A which in retrospect nearly sunk the company was worth it. I'd need to see some hard facts and numbers pointing to those acquisitions ditching shareholder returns and value. In addition pretty much any acquisition wouldn't be accretive at this valuation. I say build cash or buy back shares. Pay off the debt, stabilize revenues and generate FCF

[knicksman]

Totally agree.

[KnowledgeSeekr8]

Totally agree as well Jason. Cash generation and debt repayment is what I've been asking for over the past few years and looks like last year I got my wish. I just need that to happen again this year and I will be breathing a little easier with this investment.