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ISC reports third quarter 2014 financial results

November 12, 2014

Investor ResourcesREGINA, Nov. 12, 2014 /CNW/ - Information Services Corporation (TSX:ISV) ("ISC" or "the Company"), Saskatchewan's exclusive provider of key registry information services, today reported on the Company's financial results for the third quarter ended September 30, 2014.

Highlights of ISC's Q3 2014 financial results

  • Revenue was $21.3 million for the three months ended September 30, 2014, an increase of $0.5 million or 2.1 per cent, compared to $20.8 million for the three months ended September 30, 2013. Although all revenue lines increased, the majority of increase came from the Land Titles Registry. Revenue excludes the Vital Statistics Registry, which is treated as a discontinued operation in 2013.
  • EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of 2014 was $9.7 million compared to $9.5 million in the third quarter of 2013, an increase of 1.7 per cent. ISC's EBITDA margin for the third quarter of 2014 was 45.4 per cent comparable to the 45.6 per cent in the third quarter of 2013.
  • Adjusted EBITDA was $9.7 million for the quarter compared to $9.6 million in the same quarter last year, with ISC generating an Adjusted EBITDA margin of 45.4 per cent for the quarter compared to 45.9 per cent in the third quarter of 2013. As no adjustments were made for the initial public offering ("IPO") or discontinued operations in the third quarter 2014, Adjusted EBITDA mirrors EBITDA for the period.
  • Net income for the three months ended September 30, 2014 was $6.2 million, or $0.36 per share. In the third quarter last year, net income was $6.0 million, or $0.35 per share.

 

Management's Discussion of ISC's Summary Quarterly Financial Results

(Thousands of CAD dollars,

except earnings per share and where noted)

Three months ended September 30,

2014

2013

     

Revenue

   

Land Titles Registry, Land Surveys Directory and Geomatics

$ 16,608

$ 16,286

Personal Property Registry

2,742

2,614

Corporate Registry

1,927

1,924

Other

1

8

Total Revenue1

$ 21,278

$ 20,832

     

Operating, general and administrative expenses

11,613

11,268

     

EBITDA2

9,665

9,504

EBITDA Margin2 (% of revenue)

45.4%

45.6%

Adjusted EBITDA2

$  9,665

$  9,564

Adjusted EBITDA Margin2

45.4%

45.9%

Net Income and total comprehensive income

6,239

6,015

Earnings per share, basic and diluted3

0.36

0.35

Earnings per share excluding income tax expense and discontinued operations, basic and diluted3

0.48

0.48

Free cash flow2

$     7,622

$     9,091

1.  

Revenue does not include the Vital Statistics Registry, which is reflected as a discontinued operation.

   

2.

EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Free cash flow are not recognized as a measure under IFRS and do not have a standardized meaning prescribed by IFRS. See "Non-IFRS Measures" in Management's Discussion & Analysis for the third quarter ended September 30, 2014.

   

3.

The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the period.

  • Revenue for Land Titles Registry, Land Surveys Directory and Geomatics (the "Land Registry") was $16.6 million for the three months ended September 30, 2014, an increase of $0.3 million, or 2.0 per cent, compared to the three months ended September 30, 2013.

    Transaction volumes, specific to land titles, increased 1.8 per cent for the three months ended September 30, 2014 compared to the same period last year.
     
  • Revenue for the Personal Property Registry (the "PPR") for the three months ended September 30, 2014 was $2.7 million, which represents an increase of 4.9 per cent from the same period in 2013.

    Overall transaction volumes were up slightly for the third quarter 2014 by 1.8 per cent compared to the same period last year. However, the main driver of revenue for this registry – personal property security registration set-ups, has shown a minor decrease in volume, but an increase in revenue. Since the price per registration varies based on the nature and term of the security agreement this indicates more long-term registrations were completed in the third quarter of 2014 as compared to the same quarter of 2013.
     
  • Revenue for the Corporate Registry for the three months ended September 30, 2014 remained stable at $1.9 million, when compared the three months ended September 30, 2013. Revenue from the incorporation of new businesses, included in registrations, declined by 2.8 per cent in the same period, however this was offset by an increase in revenue of 1.3 per cent from the filing of annual returns.

    Overall transaction volumes were up 13.7 per cent over the three months ended September 30, 2014 compared to the same period last year. This increase can be attributed to the elimination of free searches for certain entities during the second quarter of 2014 which resulted in higher revenue-generating search volumes this quarter. 
     
  • Operating, general and administrative expenses were $11.6 million for the three months ended September 30, 2014 compared to $11.3 million for the three months ended September 30, 2013, an increase of 3.1 per cent.
     
  • Depreciation and amortization remained stable at $1.2 million for the three months ended September 30, 2014 compared to the same period of 2013. The decline was due to certain projects reaching a fully amortized state in 2013 and only moderate expenditure on capital to date in 2014.
     
  • Net income and total comprehensive income for the three months ended September 30, 2014 was $6.2 million, or $0.36 per share, compared to $6.0 million, or $0.35 per share for the same period in 2013.

    By way of comparison, net income, excluding income tax expense and discontinued operations for the three months ended September 30, 2014 was $8.5 million, or $0.48 per share, compared to $8.4 million, or $0.48 per share for the same period of 2013.
  • As of September 30, 2014, the Company held $32.2 million in cash, an increase of $8.4 million from September 30, 2013.

Note to Readers:

This news release provides a general summary of Information Services Corporation's results for the third quarters ended September 30, 2013 and 2014.  Readers are encouraged to download the Company's complete financial disclosures. Links to ISC's financial statements and related notes and Management's Discussion and Analysis for the period are available on ISC's website in the Investor section of the site at http://isc.investorroom.com. All figures are in Canadian dollars unless otherwise noted.

Copies can also be obtained at www.sedar.com by searching Information Services Corporation's profile or by contacting Information Services Corporation at investor.relations@isc.ca

Conference Call And Webcast

The Company is hosting a conference call and webcast at 10:00 a.m. Saskatchewan Time; 11:00 a.m. Eastern Time on November 13, 2014 to discuss these results. Dial-in numbers for the conference call are:

1-416-764-8688 or toll-free at 1-888-390-0546.

A live audiocast of the conference call is available at the following link:

http://www.newswire.ca/en/webcast/detail/1425078/1583048

About ISC

ISC is a provider of registry and information services to the Province of Saskatchewan. The Company is the exclusive provider of the Land Titles Registry, Land Surveys Directory, Personal Property Registry and Corporate Registry in Saskatchewan, which are key supporters of economic activity in the province.

Cautionary Note Regarding Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable Canadian securities legislation, including certain assumptions with respect to the Saskatchewan economy, consumer confidence, interest rates, level of unemployment, inflation, real estate market in Saskatchewan, claim liabilities, income taxes, our ability to attract and retain skilled staff, employee future benefits, goodwill and intangibles are material factors in preparing forward-looking statements and management's expectations. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking information. Although ISC believes the forward-looking information contained in this release is based upon reasonable assumptions, readers are cautioned not to place undue reliance on forward-looking information as it is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. Many factors and risks could cause our actual results to differ materially from those expressed or implied by forward-looking information including those detailed in ISC's Annual Information Form, dated March 19, 2014, ISC's unaudited condensed Consolidated Financial Statements and Notes and Management's Discussion and Analysis for the quarter ended September 30, 2014 as well as other documents filed by ISC with Canadian securities regulators through SEDAR (www.sedar.com) from time to time. Investors and others should carefully consider the above-noted factors and risks and other uncertainties and potential events. The forward-looking information in this release is made as of the date hereof and, except as required under applicable securities legislation, ISC assumes no obligation to update or revise such information to reflect new events or circumstances.

SOURCE Information Services Corporation


For further information: Pamela Keck, Manager, Investor Relations, Toll Free: 1-855-341-8363 in North America or 1-306-798-1137, investor.relations@isc.ca

Interactive Analyst Centre

Disclaimer

Please note that you are now entering a website directly or indirectly maintained by a third party (the "External Site") and that you do so at your own risk.

Information Services Corporation (“ISC”) has no control over the External Site, any data or other content contained therein or any additional linked websites. The link to the External Site is provided for convenience purposes only.

By clicking “Accept” you acknowledge and agree that neither ISC nor third party provider Virtua Research, Inc. (“Virtua") is responsible, or accepts or assumes any responsibility or liability whatsoever for, the content, the data or the technical operation of the Linked Site. Further, by entering the External Site, you also acknowledge and agree that you completely and irrevocably waive any and all rights and claims against ISC and Virtua and further acknowledge and agree that in no event shall ISC or Virtua, its officers, employees, directors and agents be liable for any (i) indirect, consequential, incidental, special, compensatory or punitive damages, (ii) damages for loss of income, loss of business profits, business interruption, loss of data or business information, loss of or damage to property, (iii) claims of third parties, or (iv) other pecuniary loss, arising out of or related to the Legal Notice, this disclaimer or the External Site.

By entering the External Site, you further acknowledge and agree that the disclaimer of warranties and limitations of liability set out in this disclaimer shall apply regardless of the causes, circumstances or form of action giving rise to the loss, damage, claim or liability, even if such loss, damage, claim or liability is based upon breach of contract (including, without limitation, a claim of fundamental breach or breach of a fundamental term), tort (including, without limitation, negligence), strict liability or any other legal or equitable theory, and even if ISC and Virtua are advised of the possibility of the loss, damage, claim or liability. The waiver and release specifically includes, without limitation, any and all rights and claims pertaining to the processing of personal data, including but not limited to any rights under any applicable data protection statute(s).

If in any jurisdiction, any part of this disclaimer is held to be unenforceable by a court of competent jurisdiction, such part of this disclaimer shall be restricted or eliminated to the minimum extent and the remaining disclaimer shall otherwise remain in full force and effect.

Please note the information presented is deemed representative at the time of its original release. Changes in historical information may occur due to adjustments in accounting and reporting standards & procedures.

Non-IFRS Information

In addition to disclosing results determined in accordance with IFRS, ISC may also disclose certain non-IFRS and pro forma non-IFRS results of operations, including certain ratios, operational and miscellaneous data, as well as net income, diluted earnings per share, operating expenses, and operating income that make certain adjustments or exclude certain charges and gains that are outlined in the schedules included in this website. Management believes that this non-IFRS and pro forma non-IFRS information provides investors with additional information to assess ISC operating performance by making certain adjustments or excluding costs or gains and assists investors in comparing our operating performance to prior periods. Management uses this non-IFRS and pro forma non-IFRS information, along with IFRS information, in evaluating its historical operating performance. ISC and Virtua also take no responsibility for third party pricing data provided for informational purposes and certain ratio results formulated from the provided third party pricing data.

The non-IFRS information is not prepared in accordance with IFRS and may not be comparable to non-IFRS information used by other companies. The non-IFRS information should not be viewed as a substitute for, or superior to, other data prepared in accordance with IFRS.

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