The following is a transcription of the above video, and The Market Herald Canada has edited it for clarity.
Today we are talking with Ciscom Corp. (CSE:CISC), which is focused on technology-driven marketing and advertising and content management organizations.
It operates as a long-term investor buying and holding while working with management of invested companies.
Here to talk more about the company is President and CFO Michel Pepin.
TMH: Can you recap where the company is regarding its EBITDA for the third quarter in 2023, especially compared to 2022?
Pepin: We’ve improved our normalized EBITDA on a cash basis by $1.4 million at the end of Q3 2023 versus 2022. This is a significant turnaround. We are cash positive and we are profitable, again from a normalized EBITDA point of view.
With the difficult market that we’re facing where revenues in the retail space were affecting campaigns, you can appreciate that a number of advertisers have actually reduced their spends.
The fact that we’re actually up year over year on our top line at the end of Q3 and now, as you might have seen in the release that was done on Jan. 17, 2024, our sales are up to $35 million for the whole year in 2023.
Our gross profit is at $6.8 million, which is a 15 per cent increase year over year on a proforma basis from a GAAP basis or IFRS basis, we’re at 143 per cent growth year over year. We’re tracking rather well.
TMH: Prior to Christmas, I know the company was in talks for its third acquisition. Are you able to tell us more information about this and potential updates?
Pepin: M&A or acquisitions in the ICT sector are Cisom’s core mandate, we will always have a number of different M&A discussions in process. As you can appreciate, we need to respect confidentiality and to give status, or level of discussions with companies is always difficult, and frankly we just can’t from a regulatory basis.
Our goal is to close acquisitions on a periodical basis, but we won’t do that at any cost. We want to make sure that we’re closing the right acquisition as it’s paramount to success. We do a fair amount of due diligence.
We’re strategic in our approach and we adhere to stringent criteria when it comes to closing an acquisition. We’re looking at companies with solid recurring revenue, and we want to make sure they’re creative (on) day one and in five years from now to Ciscom.
TMH: I understand that a significant number of shares are owned by board members, presumably giving them extra care in what happens with the company. Did this naturally occur or was this a goal Ciscom was looking to achieve?
Pepin: It is by design. The largest shareholders are actually the entrepreneurs that have sold their businesses into Ciscom. They’ve sold their livelihood into the business. Actually, the two entrepreneurs are now board members. Everyone on the board has Ciscom and its shareholders’ best interest in mind.
It’s a little different in the U.S., it is shareholders before the company and Canada, it is the company before the shareholders’ best interest in mind. As a new issuer, the market is still adjusting as we progress, the market cap should get to the enterprise value. Our enterprise value should be two to four times revenue, which puts us as $70 (million) to $140 million.
There’s a lot of upside right now for investors should they wish to participate with Ciscom. The board is heavily invested in seeing Ciscom perform and prosper and we’re going to do that with solid business performance.
TMH: Looking back at the third quarter, what has been a measurement of success for the company and what is an aspect or goal that Ciscom is striving for?
Pepin: Well, simply put, continued, sustained organic and acquisition growth are key to our success. We’ve now achieved critical mass, critical revenue level to spring forward.
The other element is when you’re doing acquisition, you’re always looking for cost synergies. We’ve now achieved those.
We’ve put a number of cost measures in place, we’ve reduced them by $625,000 from an ongoing point of view. We did that through improved processes. We reduced staff, discontinued low-margin projects and procurement initiatives. We’ve addressed both the health and the leverage KPIs elements of the business. We’re focusing on profitable growth, which is key for us.
TMH: Also, the annual shareholders meeting has been scheduled for Feb. 8. What points will be covered during this meeting?
Pepin: The company was overdue to have its AGM. Actually the management information circular was posted on SEDAR+ on the 17th of January.
Paul Gayner called for the AGM the instant he became the new board chair. The steps to the meeting are to re-elect the current board members, we’ll pass a resolution to set the board size, we’ll be approving revised bylaws and revised stock option plans that are aligned to public companies versus private companies.
We had not updated those as of yet. Following the formalities, we’ll have a brief business update. The board’s governance and ethics are exemplary. The board has been tested as of recent months and we’ve now been praised by regulators and the investment communities at large. We’re pleased to proceed with the AGM.
TMH: There has also been a new appointment of Sheri Rogers as PMG’s (Prospect Media Group) EVP Managing Director. What is the team looking forward to the most as she settles into her new position?
Pepin: Sheri joins us with a wealth of experience and knowledge in the sector, that’s fantastic. She is highly respected by her peers in the industry. This is key. She has all the network and the connections possible.
The team is super excited to having her joining the company and she has a broad mandate. She basically will be refining operations services, overseeing client relationships and new growth.
So, touching everything as per her title, which is EVP and managing director, you touch all sides of the business and she’ll work closely with clients to make sure that we are delivering what they’re looking for and be at the leading edge of our sector.
In conclusion, Ciscom currently has the right management team in place to address growth operations, acquisition, integration to prosper. We have deep management and corporate experience in place and we’re looking forward to our 2024 year.
You can follow the company on the CSE where they trade under the symbol CISC or head to its website at Ciscomcorp.com for more information.
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