REGINA, Saskatchewan, March 13, 2018 (GLOBE NEWSWIRE) -- Information Services Corporation (TSX:ISV) (“ISC” or the “Company”) today reported on the Company’s financial results for the fourth quarter and year ended December 31, 2017.
Fourth Quarter 2017 Highlights
Year-end 2017 Highlights
Financial Position as at December 31, 2017
Commenting on ISC’s results, Jeff Stusek, President and CEO stated, “This was a strong year for ISC. Not only did we deliver increased revenue, EBITDA, net income and earnings per share, but we also made two significant acquisitions, which is consistent with our strategy of acquiring companies with competencies or operations in our industry space.” Stusek continued, “Our subsidiaries ESC and ERS are delivering organic growth, while our Registries business continues to demonstrate its resilience in the face of economic challenge. I look forward to the year ahead as we continue to execute on our strategy to deliver shareholder value.”
Management’s Discussion of ISC’s Summary of Fourth Quarter and Year-end 2017 Financial Results
|(thousands of CAD dollars; |
except earnings per share
and where noted)
Ended Dec 31,
Ended Dec 31,
|Year Ended |
Dec 31, 2017
|Year Ended |
Dec 31, 2016
|Revenue - Registries|
|Land Registry||$ 13,762||$ 13,038||$ 54,792||$ 54,921|
|Personal Property Registry||2,294||2,273||9,953||9,947|
|Total||$ 18,524||$ 17,565||$ 74,888||$ 73,950|
|Revenue - Services||4,035||3,427||14,902||13,639|
|Revenue - Other||1,030||209||3,802||786|
|TOTAL Revenue||$ 23,589||$ 21,201||$ 93,592||$ 88,375|
|Expenses||$ 17,539||$ 18,248||$ 71,694||$ 67,929|
|EBITDA1||$ 7,842||$ 6,833||$ 30,015||$ 29,529|
|EBITDA margin1 (% of revenue)||33.2||%||32.2||%||32.1||%||33.4||%|
|Adjusted EBITDA1||$ 8,954||$ 7,336||$ 33,403||$ 33,454|
|Adjusted EBITDA margin1||38.0||%||34.6||%||35.7||%||37.9||%|
|Net income||$ 18,774||$ 2,919||$ 27,789||$ 15,503|
|Earnings per share (basic)2||$ 1.07||$ 0.17||$ 1.59||$ 0.89|
|Earnings per share, (diluted)2||$ 1.07||$ 0.17||$ 1.58||$ 0.88|
|Free cash flow1,3||$ 2,804||$ 4,084||$ 22,918||$ 19,993|
2017 Results of Operations
The following section includes forward-looking information, including statements related to the industries in which we operate, growth opportunities and our future financial position and results including expected revenue, EBITDA and capital expenditures. Refer to “Cautionary Note Regarding Forward-Looking Information”.
We see two factors influencing the outlook for our Registries segment, specifically the Saskatchewan Land Registry, those being changes to the mortgage rules and an increase in overnight lending rates. The Office of the Superintendent of the Financial Institutions Canada implemented revisions to its mortgage rules effective on January 1, 2018, which now include a requirement to “stress test” borrowers with uninsured loans to ensure they could withstand increases in interest rates. In addition, The Bank of Canada raised its overnight lending rate on January 17, 2018 following two similar increases in 2017. Interest rate changes often influence consumer behaviour and, as such, may affect ISC’s business. We expect; however, it will be some time before the impact of these changes is known. In general, we expect the performance of our Registries segment in 2018 to be in line with that of 2017.
In our Services segment, we expect to see further customer growth in the Financial Support Services revenue category (beginning in 2018, we will change the way in which we report revenue for our Services segment, consolidating to two categories, namely Legal Support Services and Financial Support Services – for more details, see section “Services Segment” in the Management’s Discussion & Analysis for the year ended December 31, 2017), with customers leveraging Know-Your-Customer on-boarding services as our customers’ programs come on stream during the year. With our recent acquisition of AVS, we also expect continued revenue growth in our Financial Support Services as we are now able to provide complete "best in class" service offerings to the market. ESC will continue to invest in its core technology platforms to enable integrated solutions in conjunction with its AVS technology in the year ahead.
The key drivers of our expenses will continue to be wages, salaries and information technology costs, as well as the pursuit of new business opportunities.
The acquisition of AVS in December 2017, with a high revenue, lower margin profile, changes ISC’s consolidated revenue and EBITDA margin profile compared to previous years. With that in mind, and based on our outlook, ISC currently expects total revenue of between $124.0 and $130.0 million with an EBITDA margin of between 24.0 per cent and 26.0 per cent. Capital expenditures are expected to range between $4.0 million and $6.0 million and will be funded through operating cash flow.
ISC’s guidance does not include revenue or costs from any potential new contracts in any of its reportable segments.
Note to Readers
The Board of Directors (“Board”) of ISC is responsible for review and approval of this disclosure. The Audit Committee of the Board, which is comprised exclusively of independent directors, reviews and approves the fiscal year-end Management’s Discussion and Analysis (“MD&A”) and financial statements and recommends both to the Board for approval. The interim financial statements and MD&A are reviewed and approved by the Audit Committee.
This news release provides a general summary of ISC’s results for the years ended December 31, 2017 and 2016. Readers are encouraged to download the Company’s complete financial disclosures. Links to ISC’s financial statements and related notes and MD&A for the period are available on our website in the Investor section at www.company.isc.ca.
Copies can also be obtained at www.sedar.com by searching Information Services Corporation’s profile or by contacting Information Services Corporation at firstname.lastname@example.org.
All figures are in Canadian dollars unless otherwise noted.
Conference Call and Webcast
We will hold an investor conference call on Wednesday, March 14, 2018 at 11:00 a.m. ET (9 a.m. MT) to discuss the results. Participants may join the call by dialing toll-free (844) 419-1765 or (216) 562-0470 for calls outside North America. Simultaneously, an audio webcast of the conference call will also be available at the following link https://company.isc.ca/investor-relations/events/default.aspx. The audio file with a replay of the webcast will be available about 24 hours after the event on our website at the link above. We invite media to attend on a listen-only basis.
Headquartered in Canada, ISC is the leading provider of registry and information management services for public data and records. Throughout our history we have delivered value to our clients by providing solutions to manage, secure and administer information through our Registries and Services segments. ISC is focused on sustaining its core business while pursuing new growth opportunities. The Class A Shares of ISC trade on the Toronto Stock Exchange under the symbol ISV.
Cautionary Note Regarding Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities legislation including, without limitation, those contained in the “Outlook” section hereof and statements related to the industries in which we operate, growth opportunities and our future financial position and results including expected revenue, EBITDA and capital expenditures. 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. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to changes in economic, market and business conditions, reliance on key customers and licenses, dependence on key projects and clients, securing new business and fixed-price contracts, identification of viable growth opportunities, implementation of our growth strategy, competition and other risks detailed from time to time in the filings made by the Company including those detailed in ISC’s Annual Information Form dated March 13, 2018 and ISC’s audited Consolidated Financial Statements and Notes and Management’s Discussion and Analysis for the fourth quarter and year ended December 31, 2017, copies of which are filed on SEDAR at www.sedar.com.
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.
Director, Investor Relations & Corporate Communications
Manager, Investor Relations
Toll Free: 1-855-341-8363 in North America or 1-306-798-1137