DATA Communications Management Corp. (DCM) Earnings Call Transcript & Summary

All right, folks, we'll get things underway here. And first, I'd like to welcome everybody. Good morning. My name is Kingsley Ward, and I'm the Chair of the Board of Directors of DATA Communications Management, or DCM, and I would like to call this Annual Meeting of DCM shareholders to order. For those of you who are shareholders, thank you for joining us today. We also welcome all of our guests who are attending today, whether in person or virtually. As a reminder, the webcast does not have voting capabilities. Therefore, all shareholders who have accessed the meeting via the webcast and were eligible to vote at the meeting, must have cast their vote by submitting a completed proxy form or voting instruction form prior to the meeting by one of the means described in the company's management information circular. I'm pleased to have with me here today Richard Kellam, DCM's Chief Executive Officer; James Lorimer, Chief Financial Officer; and our directors, I think everybody knows the directors here. So we'll welcome them all, and thank you for coming. I think almost everybody is here in person. For those of you who are joining online through the webcast, you can submit your questions after the formal part of the meeting, using the chat or raise your hand feature in Microsoft Teams. We will try to answer all your questions once the formal portion of the meeting is concluded. As we look to the coming year, we remain focused on the opportunities DCM has in terms of its business, the ongoing integration of Moore Canada Corporation, which was acquired last year, shareholder value creation and the positive impact the company can have on our community. Our engagement with the shareholders is not limited to this meeting. Throughout the year, our Board and management consider the shareholder feedback as we receive it in a variety of forms. What we learned helps us prioritize our efforts and identify areas of emerging interest for the Board. Thank you very much for the trust you placed in all of us and the opportunity to serve you all on the Board. DCM elected to send out proxy-related materials for this meeting to shareholders using the notice-and-access provisions of applicable Canadian Securities Laws. I'll refer to these provisions in the meeting as notice-and-access provisions. With the consent of the meeting, I will serve as Chairman of the meeting and now call the meeting to order. Our Chief Financial Officer, Mr. Lorimer is in attendance and will act as Secretary for today. I have appointed [indiscernible] Investor Services, Inc. to act as scrutineer. [indiscernible] has deposited with me a statutory confirming the sending of the notice of this meeting to each shareholder entitled to vote at the meeting and to each director and to the auditors of the company. The notice calling this meeting requires that shareholders intending to vote by proxy must have deposited their proxies with Computershare no later than 11:00 a.m. Eastern Standard Time on May 21, 2024. Proxies so deposited are now in the custody of the scrutineers and reflected in the preliminary scrutineer support. The scrutineers confirm that these proxies represent approximately 36.3 million common shares of corporation or approximately 66% of the outstanding common shares. The scrutineers have also confirmed that a quorum is present and a final scrutineers' report will be available after the conclusion of this meeting and will be kept with the records of the meeting. As the notice of this meeting has been given as required and the quorum is present today, I declare that we are properly constituted for the transaction of business. The agenda for motions with respect to the business that is to be dealt with at this meeting is contained in the notice of meeting you received prior to the meeting. A number of shareholders or proxy holders present have agreed to assist with presentations of the motions. At the conclusion of the formal part of this meeting, our CEO, Richard Kellam will provide some remarks about our business. And following that, we will have the opportunity for everyone to ask questions. When submitting questions, please provide your name for the records of the meeting. There are 2 matters set out in the notice of the meeting to be voted on by shareholders. Unless there is an objection, I'll [indiscernible] with the reading of the notice. The appointment of auditors will be voted on by a show of hands unless it is determined that a ballot is appropriate. The election of directors will be voted on by ballot. I should make it clear that at this point, that only registered shareholders who have not previously voted by proxy or duly appointed proxy holders are permitted to fill out a ballot on those votes. If you are a proxy holder, ballots for each matter to be voted on are available from the scrutineer, and those ballots will be used to conduct the votes on these matters. Please fill out those forms and submit them accordingly. If you are a nonregistered shareholder, you will have already had the opportunity to cast your vote on the matters to be considered at today's meeting [indiscernible] voting instructions to your intermediary, provided you complied with all the voting instructions in the materials sent to you by your intermediary. Your votes on these matters have already been received and will be counted by the scrutineers. In order to expedite the voting process, the results of these votes to be conducted by ballot will be publicly announced following the meeting once the scrutineers have received and tabulated the results. I am tabling at this meeting the 2023 annual consolidated financial statements of the company. The financial statements are also available on SEDAR. On behalf of the Board of Directors, I now place before the meeting the consolidated financial statements of the corporation and the report of the auditors on those statements for the year ended December 31, 2023. The first item of the business is the appointment of auditors. I believe that Mr. Lorimer has a motion in regards to this matter.

Mr. Chair, I'm a proxy holder, and I move that PricewaterhouseCoopers LLP, and they are hereby appointed auditors of the corporation, to hold office until the close of the next Annual Meeting of Shareholders or until their successors are appointed and the Board of Directors be and it is hereby authorized to fix their remuneration.

Thank you. Do we have a seconder?

Yes, Mr. Chair, Richard Kellam, I'm a proxy holder, and I second the motion.

Thank you. All in favor, please signify by raising your hand. [Voting]

Contrary? None? [Voting]

We'll declare the motion carried. Next item of business is the election of 8 directors. Each director is to be elected to hold office for a term commencing at the close of this meeting and ending at the close of the next Annual Meeting of Shareholders or until his or her successor is elected or appointed. I'll now declare the meeting open for director nominations. James, please present this motion.

Mr. Chair, I'm a proxy holder, and I nominate each of the following: Gregory Cochrane, Merri Jones, Richard Kellam, James Murray, Michael Sifton, Alison Simpson, J.R. Kingsley Ward, and Derek Watchorn, for election as directors of the corporation to serve until the close of the next Annual Meeting of Shareholders or until their successors are elected or appointed.

Thanks, James. Before I ask whether there are any further nominations, I wish to note that the corporation has adopted a majority voting policy applicable to uncontested director elections. Among other things, this policy enables shareholders to vote separately for each director nominee at meetings of shareholders where directors are to be elected. In addition, pursuant to the corporation's advance notice bylaw, only persons nominated in accordance with the procedures set out in that bylaw will be eligible for election to the Board of Directors. The corporation did not receive any notice of any director nomination containing the information prescribed in the company's bylaws prior to the deadline of 5:00 p.m. EST on April 23, 2024. I'll now entertain a motion respecting the election of each of the nominees as directors of the corporation. James, please present the motion.

Mr. Chair, I am a proxy holder, and I move that each of Gregory Cochrane, Merri Jones, Richard Kellam, James Murray, Michael Sifton, Alison Simpson, Kingsley Ward, and Derek Watchorn, be elected as a Director of the corporation to hold office until the close of the next Annual Meeting of Shareholders or until his or her successor is elected or appointed.

Rich, do you have a second there?

Yes, Mr. Chair, I'm a proxy holder, and I second the motion.

Thank you. We will conduct the vote on this matter by way of ballot. As I indicated earlier, the corporation will publicly announce the results of each of the votes conducted by the ballot today following the conclusion of this meeting. If there is no further business to be brought before this meeting, I'd ask James for a motion to terminate the formal portion of the meeting.

Mr. Chair, I am a proxy holder, and I move that this meeting be terminated.

A seconder, please.

Yes, Mr. Chair, I am a proxy holder and I second the motion.

All in favor, please signify by raising your hand. [Voting]

[indiscernible]. [Voting]

Well, with that, I declare this meeting now terminated. I want to thank our CEO and CFO and the entire team for some extraordinary efforts over the last year. We owe a lot to this dedicated group of individuals, and I can't thank you enough for the dedication that you all bring to your jobs every day. And with no further ado, I'll turn things over to Richard Kellam here to make a few remarks with some other team members here. Rich?

So quickly here [indiscernible] we're going to change the layout or we do things a little differently today because we're actually going to do a Q&A panel session [indiscernible].

So as Richard said, we've reached the point in the Annual Shareholder Meeting, where it's customary for the CEO to give a state of the company address, but we decided to [indiscernible] with a formal presentation today in favor of a panel discussion with Richard Kellam and James Lorimer. My name is [indiscernible], and I serve on the communications team for DCM. I've got a list of questions here that will be of interest to investors and shareholders. And so I'll start with the first question to James. Ten days ago, we [indiscernible] our first quarter results and as part of that presentation, James, we talked about the sort of balance of the year priorities for DCM. I wonder if you could just recap those again for those on the call and [indiscernible]?

Sure. We really have 4 key priorities for the balance of the year. First is really making sure that we integrate the MCC business and really do it flawlessly. So that's really kind of our first priority. Second priority is putting in plans to grow our gross profit, as I think the audience knows the business we acquired had significantly lower gross margins than our business had historically and really looking at how do we get those margins back to the kind of pre-acquisition levels that we were. Our third focus is how we grow our business, and our commercial teams are spending a lot of time on -- or I guess we spent a lot on bringing our commercial teams together working on the strategic client plans to integrate our capabilities and cross-sell, and we're already seeing some of the [indiscernible] come there. So that's our third priority is to grow the business. And then our fourth priority is to continue to generate higher levels of free cash flow. And if we do the first 3 things successfully, we think the fourth priority will certainly be introduced.

Thanks, James. We'll delve into some of those priorities in more detail as we continue the discussion. Richard? It's been a year since the acquisition closed April 25 of 2023. And there's been a lot of work put into getting us to this point today. Looking back on that sort of last year, if you will, does anything stand out for you, things that might have been expected or unexpected as we've gone through that process over the last year.

That is a great question. We were very, very well prepared for this acquisition. We spent a lot of time on due diligence, and we used the Boston Consulting Group to help us through that process. So we really kind of understood what we were acquiring before we acquired. We spent a lot of time on pre-merger integration planning, and then we had a very detailed plan for post-merger integration, which we've been executing against. I've done several deals in my career. And this one -- you sometimes find skeletons in the closet, you found some issues, but I'd say this when we found a lot more opportunities. Through the due diligence and through the premerger integration planning, we identified $25 million to $30 million in synergies. Once we got into it and guided to post-merger integration and execution, we revised that to $30 million to $35 million in opportunities. And those are clear -- I call them hard synergies as far as synergies we can capture. And so we acquired a great business with a great team -- like an exceptional team. Lots of opportunities for value creation as we continue to integrate the business across the country. We acquired a great team with incredible capabilities, a great product, incredible clients. And now that we're one, we're -- I'd say we're working very, very well together. We still obviously have some integration work to complete a couple of a few facilities that we need to close by year-end. But all that work will be complete by the end of the year, and we'll be into an iconically in 2025. So -- so yes, great question. I'd say everything positive. Like again, we were so well prepared going into it, and now we're executing the playbook that we wrote pre-acquisition.

James, you mentioned growth earlier on the priorities and focus for a lot of investors, the larger institutions or individual investors, after a transformative merger like this is top line growth. And what can you tell us about sort of how the leadership team views your top line growth opportunities and prospects going forward?

Yes. Thanks. We see a ton of opportunities for growth. Every day, our commercial team is having success, whether it's new contract wins or contract renewals. We're also seeing some -- some really interesting kind of new logos and expansion revenue within our existing client base. So lots of great opportunities coming through the -- through the [indiscernible]. We've talked about publicly a target of a 5% compound annual growth rate in revenue over the next 5 years. And we see probably going to be focused in the early couple of years really on net gross margin improvement. And so I'm not going to go just for growth sake. Focus is really on profitable growth. But we expect to see that kind of growth accelerate in the latter part of the next 5 years. [indiscernible] so we went through the process of integrating and we selected the A team for our commercial take, and we have a team that honestly is best-in-class. 63, 64 frontline salespeople are out there every day, bringing service -- bringing solutions -- or a solution-based selling company, bringing some solutions to clients. And really, when you think about it, we came together as a commercial team, October, November. We're really starting to really get in our groove, if you will, right, it takes a couple of months working together and bring up new accounts to really get that momentum. And we've got incredible momentum right now. Got the walk around the office. I talk to people every day. I was in Vancouver last week with our team. And there's a lot of great stuff happening together and we have the A team. And I'll also add that the market is good. When you understand the market, print market is good, you understand where to play and how to play and how to bring value to clients. And that's exactly what our commercial team is doing right now. So we're pleased. We're confident in delivering our growth agenda, and we see a real bright future for our growth agenda over the next few years.

Just at this time to pause and welcome any questions, whether it be here in the room from anyone attending or online. So that's -- we'll have that open for any questions. Okay. I'm going to come back to you, Richard, here. And obviously, this year is all about completing the integration after a transformative acquisition. But a question may come up, what about future M&A? Is that on the cards at all? How do you look at that given that you're still in the sort of this integration phase, but I'm wondering if that means that you're not looking at other opportunities [indiscernible]?

Yes. Obviously, as you already said, priority for us is just making sure that we digest this acquisition and integrate with excellence and complete all of the integration by year-end and the other synergies that we've promised that -- and yet we're on track to do all that. But leadership responsibility as well as to look at the future in 2025, '26, '27, and we're looking. Not to say that we have any active M&A right now. But if we think of kind of the areas that we're looking at from an M&A perspective, one would be -- one kind of pillar and one area is other smaller tuck-in opportunities that bring value to our business. So it could be companies that are in kind of highly personalized communication [indiscernible] so that's kind of an area that we're looking at. And by the way, the market is ripe for consolidation. We're getting calls every week from -- from [indiscernible] organization. Second area that we're considering, I'd say considering at this point and exploring is a little bit more vertical integration. So I think the marketing communication services, but not any marketing communication services, more kind of on that personalized communication space, which is, again, where we deliver a lot of value clients. And the third area would be in the Martech space. We've got a portfolio of a few Martech solutions for our clients that a lot of our joy of our workflow is Martech or tech [indiscernible]. So opportunities for other Martech solutions as well. So those would be the 3 areas that we're going to be exploring. But that's kind of a future after we complete the integration of MCC.

So speaking of integration, if we look at the sort of the capabilities of the respective organizations, DCM, MCC coming into last year, there's obviously some things, I guess, as we're going through integration, where we see an MCC legacy customer being attracted to something that DCM offers and vice versa for legacy MCC or DCM client being attracted to offerings that MCC has, could you, James, share some examples of -- on both sides where clients may be finding things in the combined business that were not there before?

Sure. A few areas on the MCC side as well as the DCM side. With the more acquisition, we acquired some capabilities in transactional print. So think about high-speed, high-volume personalized communications with statements and invoices been going out on a monthly and quarterly and annual basis. So that was a great capability that we're able to now offer to some of our larger clients, and particularly, we're finding some traction there in financial services sector. We've also got some great capabilities in the retail sector with the Moore team, and we're taking advantage of that with some of our own strengths in the retail sector, so think of some of the large format capabilities and some of our retail design capabilities. So we're really having -- there's been great coming together of ideas and retail sector. On the DCM side, we're seeing great kind of pick up from the dollar accounts. Within our large-format business, the [indiscernible] business that we acquired a few years ago has great capabilities that they didn't have. They were actually outsourcing a lot of that type of work to third parties. So we've been able to kind of capture that outsourcing and along with that, higher margins. We also have great capabilities in direct mail. That was not a previous focus of work, and we're taking that capabilities and skill set to the Moore team. I think another kind of important area is the Moore team was focused from a commercial perspective on their kind of product centralist, so they would have teams that did do a really good job selling commercial print or transactional print or business forms or labels. The DCM approach -- and this is something that we really put in place, I guess, over the last kind of 9 or 10 years was much more of a solution-based selling approach. So we've been able to kind of integrate that philosophy right across our full sales team now. So we're really going out to the market with a solution-based approach when we're able to offer a full cup suite of services.

Richard, it seems like today, artificial intelligence is at the top of everyone's list, whether they're playing around ChatGPT in their homes, or starting to see the application in their business. When you think about DCM sort of today and going forward, where are the applications of artificial intelligence that you're sort of already maybe involved in or things you may see down the road?

Yes. So we're pretty active in the space right now. We've got 3 areas. One would be in the marketing [indiscernible] a lot of opportunities for automating creative services as an example. And we are kind of leaning in hard there, of course, we specialize in personalized communication and AI [indiscernible] hyper-personalize that communication. So we're learning a lot and leaning in a lot on that as well. And then workflow optimization, understanding that information and applying algorithms to improve that workflow. And that's an area that we're using a lot of AI capabilities today. So that's happening in the marketing front. On the operations side, a little bit more on the machine learning versus superior AI, but machine learning is part of [indiscernible], right? Algorithms allow for quality improvement. We have been back in our workflow today. And then supply chain optimization as well. And then the third area was interesting. And maybe we don't think about this from an AI perspective is -- and certainly our commercial team, our sales guys do, which is automating that prospecting, automating that commercial leadership. And lots of -- we're using AI for script running. We're using AI for prospecting, we're using AI for personalizing e-mail at scale as well. So lots of use in our business today [indiscernible] we see a pretty bright future as a result of similar capabilities that AI brings and a competitive necessity going forward.

Yes, for sure. And to go back to more of a mundane subject of debt. We took on a lot of debt last year with the acquisition, but reported with Q1 that we already made a substantial reduction in our debt over the last year. But can you give us a bigger picture on sort of how we're managing our debt going forward?

Yes, sure. We take a pretty practical and we think a conservative approach to debt. Prior to the acquisition, we had about $20 million of net debt. So that strong balance sheet really allowed us to finance the acquisition 100% with debt. And then we had a very strong [indiscernible] pay down that debt. So we made significant strides over the last year in doing that. Our longer-term target for net debt-to-EBITDA is below 1x. If you look at our first quarter report, we were 1.8x on a trailing 12-month basis, 1x -- 1.8x net debt or adjusted EBITDA and a net of lease payments and that's down from a little over 2x at the end of the year and certainly higher levels after we made the acquisition. So throughout the balance of this year, our principal payment will commence for some of the [indiscernible] private debt that we put on with the acquisition. And then that will kind of normalize at about $6 million or $7 million a year. And then excess free cash flow, we will use that to pay down our revolving line of credit. So we expect to see that target of below 1x net debt to EBITDA achieved over the next couple of years, kind of a combination of growing adjusted EBITDA and also paying down debt.

Also, we successfully completed our plan of [indiscernible] MCC, so it is well contributing to that.

Yes, absolutely. As I think everyone knows, we had a kind of a short-term credit facility that was effectively secured against the 3 real estate facilities that we acquired as part of the deal. That $30 million facility was repaid, I guess, back in -- toward the end of the year, and we subsequently sold and leased back to the third facility. So we completely kind of refinanced those facilities and [indiscernible].

I'm going to go back to one of the balance of the year priorities, which is improving gross margin. And Richard, I know you have been saying that gross margin could be your best friend -- gross margin is your best friend. So how can we think about that? I know we talked a lot about sort of [indiscernible] businesses coming together, but what are some specific steps that we're taking to drive that gross margin?

And maybe just to remind shareholders that we were [indiscernible] was sitting at around just under 31%, 30.8%, 30.9% gross margin prior to acquisition and up from about 22% 5 years ago. So we really knew how to create value in the market. And then we acquired MCC. And one thing we liked about it is the margin was quite low, right? So average margin MCC is around -- was around 20%. So how do we apply the DCM margin model, if you look at the [indiscernible] and we've got one objective, which is get back to 30% as quickly as possible. And you saw our results in quarter 1, we were on 29% and -- but we have -- so we now have a very clear, I'll say, profitable growth [indiscernible] mindset in the business. So not growth at any cost. Growth in line with the margin expectations. And that's coming through, obviously, understanding how to create value for our clients in the marketplace, right? The more value we can bring to the clients, the more value we should get, so we don't want to play in low-margin pools or low-value pools that anybody can play in. We have to break something different to our competitors or to our clients rather versus what our competitors spread. And that's all what we call strategic revenue management, finding opportunities to bring more value to clients. We've done a complete review of our existing client base as well as new opportunities in the marketplace of where and how we create value through. We call it again, strategic revenue management process. And the commercial team across the country is kind of well skilled now, and we're starting to see the results. So we have a very [indiscernible] gross margin is your best friend, right? And we want to have the best friend. We all have the best friend, right? And we're seeing that play through, right, our commercial team, which is -- again, we've got the [indiscernible] I know exactly what the strategy is, how do we bring value-added services to our clients and extract and get [indiscernible] and we're seeing success. And it's not growth at any expense [indiscernible] and of course, all the operational consolidation that we're going to be doing [indiscernible] the key drivers of -- think of the key drivers is gross profit, it's mix, it's pricing and it's operational assets. Those all contribute to driving that gross margin forward.

Okay. Well, speaking of sort of products and services, I know you're excited about some of the progress we've made on the digital front, maybe 2 or 3 examples of things that excite you in terms of making inroads in digital?

Yes. I mean there's a lot that excites me. First, sort of linked to what I just said in terms of gross margin improvement, where we create a lot of value for clients is where we manage a lot of complexity, right? And we try to -- and we work to simplify that complexity to technology. Last, we can extract a lot of value. And I think part of our business is exactly that, and we've got a fantastic platform that the team has built over a number of years called DCMFlex. And we call it DCMFlex because it does a lot of stuff for optimization, pent-up demand, logistics and fulfillment management, but there's one particular piece to Flex that we're really leaning in hard to right now, which is a customer communication management portion of Flex. So think of kind of highly personalized communication at scale. If you're a large insurance company, you've got thousands of brokers across the country and those brokers need to automate and personalize e-mail distribution or communication. The platform allows to do that, right? And same thing if you're a bank or an investment firm and you've got private wealth advisers throughout the country that need to personalize communication -- hyperpersonalized communication to scale. Best functionality we have in our DCMFlex platform. But we haven't really pulled out until recently to sell that as a service. And we've had some great success recently with our digital team. We picked up 3 new clients in the first quarter. Just on that [indiscernible] portion of DCMFlex. So we're very excited about that. I mean, as said, Flex enables a lot of workflow and drives that customer [indiscernible] for us. But the other mutual solution that we're very excited about is our digital asset management solution. To remind shareholders, we've been playing the DAM market is about a $6 billion market globally, anywhere data you look at 15% to 20% growth. And we entered the DAM market a couple of years ago on what I call [indiscernible] just learn about the DAM market, bring solutions to clients, which have been our white-label solutions. We've taken another DAM provider and labeled it into assemble. At the same time, we've been building our own solution to have our own tech stack and our own technology. And we're really excited because we're launching that July 15. And back to your question earlier about AI capabilities. It's got a ton of AI capabilities [indiscernible] and we're really excited about bringing that to market. Our first focus is on our 400 enterprise clients. Very few have a DAM today. They're using SharePoint, WeTransfer, Dropbox, hard drives, whatever [indiscernible] companies may be using a DAM, but there may be a lot of other areas in the company that could use it a DAM that may be a process. That's a good point. They don't have an enterprise DAM, right? And our design for enterprise, multiple file types. So our design make it super easy to upload, to find, to share, to distribute and using all kinds of AI capabilities to be able to do all that. So we're really excited. That comes to market. So call it our DCMFlex piece, which is we kind of pulled out of Flex and very active on a commercial leadership perspective and then really excited about our [indiscernible].

I also think you've got digital signage in an area that [indiscernible]?

Yes, that's right, that's happening. We entered the digital signage business in August of last year, again, on a very methodical [indiscernible]. You don't want to run straight into it. You got to learn about technology and servicing and workflow, et cetera, right? And we picked up a couple of clients, actually, one of our sales leads picked up a great client early on, like September, October. That allows to kind of roll in and to learn about our -- about our solution and how to service that solution [indiscernible] with a great partner based out of New York actually for the technology as well as for the software to be able to support the technology and distribute content [indiscernible]. We picked up $1.2 million grant in the automotive space, 200 dealers across Canada that all -- was all executed in February, March [indiscernible] the dealership and see the solution that we provided. And then we've got a very full pipeline. So still in walk. We don't want to put a number to it and give guidance on what that could be because we're still learning. But once we get to run, we can put, we'll put a hard number in. I'm [indiscernible] we're very excited about our entry into such.

Great. Great. Just one more time to see if there's any questions coming in or anyone in the room? Just a question on the assemble. So how are you going to launch them in July? What sort of -- I know you don't want to give numbers but what sort of ideas would you have with DCM success over the next 12 months, signing a better amount of clients or [indiscernible] your top tier clients to present? Or how do you measure success?

I'll just repeat in case [indiscernible] question about assemble and what the first 12 months and the approach to launch [indiscernible]. So we -- our main focus on launch will be our top 400 enterprise clients. We already have the [indiscernible] market. We've got 63, 64 frontline commercial leaders that are out there talking to clients overseeing the things. So we'll quickly amplify and get this conversation started. I don't want to -- I don't want to give a guidance in terms of what our conversion expectations are at this point because, again, like our digital signage, like what we've done in other areas, the [indiscernible] with incredible technology. And we think that will accelerate pretty quickly. But it takes time, right? It takes time on digital to like the sales cycle is a long sales cycle, especially in the enterprise. It's a lot shorter when you talk about small and medium-sized. But small- and medium-sized organizations don't necessarily have to say problems that a large enterprise will have, so getting in having the conversations, longer sales cycles. That's why I don't want to put a hard number to it, Chris. But we're excited about what we've got. It's a very unique and differentiated versus some of the competitive product in the marketplace. It's not built on a folder structure as an example, which adds a lot of complexity even within a DAM. Because of the AI capability we've built it, the ability to find files is instant, all sorts of capability. Imagine you've got a [indiscernible] presentation and also as a summary, I will summarize that presentation to determine if you want to even go and download or look at it. So lots of AI capabilities built into it, which allows us to differentiate somewhat unique in the marketplace. So yes, main focus is going to be those 400 enterprises. We also have built marketing automation into our website as well for kind of geographies outside of Canada. Yes, we're -- I'll give you a better idea once we get through crawl and into walk, just like I did with our -- our digital -- our own digital venture, but we're very optimistic. The one thing I will say, we know the DAM space, we know we're practitioners. Every single day, we're managing tens of thousands of assets with clients, tens of thousands. And in our journey to DAM as we've been building our own technology, we've won some large enterprise DAM solutions using a white-label solution. Why would they buy a white-label solution from us, they'll buy it directly from the provider. Well, they bought it because [indiscernible] and I can tell you, a large -- I won't tell you the client is, but a large transportation client -- we were up against competitive depths, and we won in an RFP and a competitor's [indiscernible] about $250,000 client that we're actively working with right now, again, using our white-label solution, we'll eventually switch that to our own tech stack. But it proves that we know the market. We know how to win at enterprise level. And now with this technology that we've built, we're quite excited about the future. So not a direct answer for you, Chris, but I'll get a better answer once we get into it and get into...

I know one of the things you hear from clients is this is a pain point now in terms of managing all this explosion of content. We've got so many more creators within organizations, creating content and therein lies an opportunity to solve that pain point, right?

It's a huge pain point. Listen, it's a huge -- it was a huge pain point for us at DCM. You got 60, 65 salespeople out there that are creating content every day, right? They're creating presentations every day. [indiscernible] team in Ottawa [indiscernible] the team in Toronto. Everything goes into our DAM. I love it because every morning I wake up, I switch it on. I see what the team has done yesterday, right? So we have -- it's really at the heart for us here at DCM for collaborating and sharing and driving efficiency and productivity [indiscernible] it's a huge pain point. We solved it quickly as obviously, we wanted to be the beta. And I can tell you, it's an incredibly critical to us.

Great. We'll go ahead and wrap up. There's no further questions. Thank you for your interest. I hope that there was some insights here about the business from James and Richard that you maybe learned today. And obviously, the door is open, James and Richard for additional questions, conversations with the shareholders and the investors going forward. And follow-up with mid-year results in August [indiscernible]. Great. Thank you again, everyone, for your attention for this panel discussion, and have a great day.

Thank you, everybody.

Thank you.