Dye&Durham filing delay is a temporary setback, analysts say

Investing.com -- Dye&Durham’s delay in filing its annual financial results could put it in technical default on its debt, but analysts say the issue is temporary and should not impact its earnings.

The Canadian legal software maker said on Monday it does not expect to file its fiscal 2025 audited financials by the Sept. 29 deadline due to ongoing discussions with regulators over purchase accounting disclosures and goodwill impairment testing.

Dye&Durham said previously reported results, including cash flow and EBITDA, will not be affected.

BMO Capital Markets said the delay is likely to weigh on the stock in the near term but does not expect any change to its forecasts.

Dye&Durham has 30 days to cure the default unless lenders grant an extension, and analysts at BMO expects the company to file within that window.

The Ontario Securities Commission had sent the company a review letter in July regarding its fiscal 2024 accounts, which Dye&Durham is still working to address.

The company said it aims to complete its responses and file results in October.

The setback adds to investor concerns over Dye&Durham’s high leverage, competition, a weak macro backdrop and recent management turnover.

Though BMO still has its Outperform rating on the stock, saying the shares remain undervalued relative to the company’s portfolio and earnings power, and that a refreshed board and management team could help unlock value.

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