BRAMPTON, Ontario–(BUSINESS WIRE)–DATA Communications Management Corp. (TSX: DCM) (“DATA” or the “Company”) today announced plans to close and relocate its Granby, Quebec warehousing operations into its 170,000 square foot Drummondville, Quebec facility before the end of 2017. DATA is also announcing that it expects additional savings through recently completed reductions in certain indirect labour and selling, general and administrative staff.
DATA’s Drummondville facility is focused on long-run production of lottery rolls, point of sale rolls and direct mail, and includes a total of 170,000 square feet dedicated to production, warehousing, corporate engineering and administration. DATA previously moved substantially all of Granby’s production capabilities to Drummondville in the fourth quarter of 2015, but has continued with warehousing and distribution activities as well as other limited administrative functions in the 100,000 square foot Granby facility. DATA is currently redesigning its Drummondville operation to accommodate the additional warehousing activities and expects this relocation to be completed in the fourth quarter of fiscal 2017. Approximately $0.7 million in annualized savings is expected from this transition, primarily related to rent and facilities savings. DATA expects to incur approximately $2.4 million in restructuring expenses relating to early lease exit charges in the fourth quarter of 2017. It is expected that substantially all of the Granby warehousing staff will relocate to DATA’s Drummondville facility and the administrative staff will relocate to DATA’s Brossard, Quebec facility.
DATA is also announcing the restructuring of approximately 30 individuals across its indirect labour, selling, general and administrative functions. These employee reductions are expected to result in total annualized savings of approximately $3.5 million, comprised of indirect labour savings of approximately $1.1 million and SG&A savings of approximately $2.4 million and have been completed over the past two and one-half months. DATA expects to incur total restructuring costs of approximately $2.8 million in connection with these changes, primarily in the fourth quarter of 2017.
“These initiatives are in conjunction with our ongoing efforts to continue to optimize our operations to make DATA more focused, agile and unified,” said Michael G. Sifton, Chief Executive Officer of DATA.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions, bringing value and collaboration to marketing and operation teams across North America. We help marketers and agencies unify and execute communications campaigns across multiple channels, and we help operations teams streamline and automate document and communications management processes. Our core capabilities include direct marketing, print services, labels and asset tracking, event tickets and gift cards, logistics and fulfilment, content and workflow management, data management and analytics, and regulatory communications. We serve clients in key vertical markets such as financial services, retail, healthcare, lottery and gaming, not‐for‐profit, and energy. We are strategically located across Canada to support clients on a national basis, and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DATA, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as “may”, “would”, “could”, “will”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan”, and other similar expressions are intended to identify forward-looking statements. These statements reflect DATA’s current views regarding future events and operating performance, are based on information currently available to DATA, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DATA to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements. The principal factors, assumptions and risks that DATA made or took into account in the preparation of these forward-looking statements include: the limited growth in the traditional printing industry and the potential for further declines in sales of DATA’s printed business documents relative to historical sales levels for those products; the risk that changes in the mix of products and services sold by DATA will adversely affect DATA’s financial results; the risk that DATA may not be successful in reducing the size of its legacy print business, realizing the benefits expected from restructuring and business reorganization initiatives, reducing costs, reducing and repaying its long-term debt, and growing its digital communications business; the risk that DATA may not be successful in managing its organic growth; DATA’s ability to invest in, develop and successfully market new digital and other products and services; competition from competitors supplying similar products and services, some of whom have greater economic resources than DATA and are well-established suppliers; DATA’s ability to grow its sales or even maintain historical levels of its sales of printed business documents; the impact of economic conditions on DATA’s businesses; risks associated with acquisitions by DATA; the failure to realize the expected benefits from acquisitions and risks associated with the integration of acquired businesses; increases in the costs of paper and other raw materials used by DATA; and DATA’s ability to maintain relationships with its customers. Additional factors are discussed elsewhere in this press release and under the headings “Risk Factors” and “Risks and Uncertainties” in DATA’s management’s discussion and analysis and in DATA’s other publicly available disclosure documents, as filed by DATA on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, DATA does not intend and does not assume any obligation to update these forward-looking statements.