Data Communications Management (DCM) is a stock this blog has followed for several years now,Since then it has made several acquisitions and has gained from each one.But the stock price did not move in unison with these acquisitions.The last acquisition was Moore Corp.(MCC) and the stock price surprisingly enough moved down from the $3.00 area to it's present level.DCM could have made only superficial changes and gotten only superficial gains from MCC.But DCM decided to change the MCC parameters.DCM stated at the time of acquisition that it expected 30-35% gains from the synergies made between the two companies.This blog sees that this will eventually be true but at the present time DCM has spent a considerable amount of money modernizing MCC.Although it has already shut down several MCC buildings that are no longer necessary for the combined operation.The new operation is quite a streamlined one now.
Q1 Results
In Q1 most of the financial indicators were higher than in Q1 2024.Net income was $5.1 million versus only $1.5 million in Q1 2024. Adjusted EBITDA was $18.6 million versus $18.1 million in Q1 2024.And a special dividend of $.20 was instituted in order to show shareholders that management has confidence in their performance as well as their resultsAnd. that they can manage this fairly large expenditure.DCM also will pay it's second regular dividend of $.025 per share.By far the main fact that the report revealed is that e.p.s. went from $.03 per share in Q1 2024 to $.09 per share in Q1 2025.This blog feels that DCM is on track to hit $.40-$.50 earnings per share on an annual basis. 
Annual Guidance
Is Zavy savy?
This blog believes that DCM should expand it's exposure to their digital operation.With that in mind several recommendations have been made to acquire a small American digital printing and transcribing operator called VQS Solutions.It's market value has dropped substantially over the last year but it's technology is "top of the line."In addition,VQS has gotten substantial new attention and buyers so that it has moved up 35% in the last month.VQS aqppears to have a new suitor.This is unfortunate as there is no doubt that there would be synergies here between DCM and VQS. But DCM had other ideas.Instead it acquired a small New Zealand software company called Zavy.But it appears that Zavy is working independently from DCM.First this blog suggests that more money be invested into Zavy.This blog suggests that money be spent on labour and equipment so that the operational scope of Zavy increases.It can do quality work for their own customers as well as do problem solving for DCM customers.This could help automatize DCM operations.And should DCM acquire VQS Solutions down the road changes could be made to Zavy to make it fit together with the newly acquired VQS.
Annual Guidance
Normally DCM only gives general guidance for revenues and earnings for the entire year.However they can give specific guidance for the next quarter.Most analysts believed that annual revenues would come in around $520 million and e.p.s. of $.55.However it has been reduced to $495 million and $.45 per share.This blog believes that revenues may get to $500 million but e.p.s. should stay at $.45-$.47 per share.Also there is no doubt that Zavy will have to be overhauled to fit into DCM operations
By the fall of 2025 Data Communications Management should be trading around $5.It is true that DCM took longer than expected to streamline their acquisition Moore Corp.It also appears that they spent more money than planned to fit Moore operations with DCM operations.However now much of the combining has been finished and DCM is ready to gain the profits from this acquisition.The overall plan has not changed and DCM is ready to move forwards.Data Communications is having trouble staying above $2.00 but a little more positive news should send it on it's next step towards $5.00.
Dale Mcintyre (M.A.(Econ)) is a freelance writer that works for a number of financial brokers. www.marketbeat.com ;https://finance.yahoo.com/
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