Issuer Direct Reports First Quarter 2021 Results
Record Total Revenue Led by Communications Revenue Increasing 32%
to $3.2 million or 64% of Total Revenue, Net Income Increased 141%
and EBITDA Increased 59%
RALEIGH, NC / ACCESSWIRE / May 6, 2021 / Issuer
Direct Corporation (NYSE
American: ISDR) (the
"Company"), an industry-leading communications and compliance company, today reported its operating results for
the three months ended March 31, 2021.
Brian Balbirnie, CEO of Issuer Direct, commented, "We continued our
momentum from 2020 and in the first quarter of 2021, revenues,
earnings, gross margins and customer counts all expanded on a
year-over-year basis. Our Communications business performed well,
increasing 32% year-over-year, something we believe we will
continue as we bring to market new products and leverage our
ACCESSWIRE news brand. We also saw our Compliance business expand
by 12% for the quarter from the same period last year, led by both
our stock transfer and annual general meeting
offerings."
Mr. Balbirnie continued, “We are pleased with our first
quarter results and, as we look ahead, we are focused on the
continued growth of our business, particularly with respect to our
Communications platform. From a technology investment standpoint,
we are building a newsroom product, with initial plans to release
this new product in the second half of this year. We believe this
new capability will lead to increased customer spend and new
customer acquisition, which should increase our newswire market
share. We recognize it is important for us to develop and release
these new products in order to continue our revenue growth, and
equally important for us to continue to prioritize strategic
acquisition opportunities.”
First Quarter 2021 Highlights:
●
Revenue - Total revenue was $4,980,000, a 24% increase
from $4,016,000 in Q1 2020 and a 5% increase from $4,744,000 in Q4
2020. Communications revenue increased 32% from Q1 2020 and 3% from
Q4 2020. The increase in Communications revenue was primarily due
to the combination of increased revenue from our ACCESSWIRE product
and an increase in revenue from subscriptions of Platform
id.
Communications revenue increased to
64% of total revenue for Q1 2021, compared to 60% for Q1 2020.
Revenue from our Compliance business increased 12% from Q1 2020 and
9% from Q4 2020. The increase was due to an increase in our stock
transfer and print and proxy fulfillment
services.
●
Gross Margin
- Gross margin for Q1 2021 was
$3,586,000, or 72% of revenue, compared to $2,763,000, or 69% of
revenue, during Q1 2020 and $3,331,000, or 70%, in Q4 2020.
Communications gross margin was 73%, an increase from 72% in Q1
2020 and flat with Q4 2020.
●
Operating Income
- Operating income was $707,000 for Q1 2021, as
compared to $248,000 during Q1 2020. The increase in operating
income is due to an increase in gross margin partially offset by
higher operating expenses, primarily due to continued investment
and expansion of our headcount, including our sales and marketing
and product development teams.
●
Net Income - On a GAAP basis, net income was $545,000, or $0.14
per diluted share, during Q1 2021, compared to $226,000, or $0.06
per diluted share, during Q1 2020.
●
Operating Cash Flows
- Cash flows from operations for Q1
2021 were $1,269,000 compared to $602,000 in Q1
2020.
●
Non-GAAP Measures
- Q1 2021 EBITDA was $992,000, or 20% of revenue,
compared to $622,000, or 15% of revenue, during Q1 2020. Non-GAAP
net income for Q1 2021 was $687,000, or $0.18 per diluted share,
compared to $397,000, or $0.10 per diluted share, during Q1
2020.
●
Stock Repurchase Plan
- The Company completed its $2,000,000
repurchase program originally announced on August 7, 2019 and
increased on March 16, 2020 by repurchasing the remaining
balance under the plan of $453,000 or 19,777 shares of its common
shares.
Key Performance Indicators:
●
During
the quarter, the Company worked with 1,541 publicly traded
customers, compared to 1,473 during the same period last
year.
●
During
the quarter, the Company worked with 1,970 privately held customers
compared to 1,289 during the same period last year.
●
During the quarter we signed 50 new
Platform id.
subscriptions to new or existing
customers with a total annual contract value of
$383,000.
●
Total Platform id.
subscriptions as of March 31, 2021
were 386, with an annual contract value of $3,046,000, compared to
341 subscriptions with an annual contract value of $2,677,000 as of
December 31, 2020.
Non-GAAP Information
Certain Non-GAAP financial measures are included in this press
release. In the calculation of these measures, the Company excludes
certain items, such as amortization of intangible assets,
stock-based compensation and tax impact of adjustments. The Company
believes that excluding such items provides investors and
management with a representation of the Company's core operating
performance and with information useful in assessing its prospects
for the future and underlying trends in the Company's operating
expenditures and continuing operations. Management uses such
Non-GAAP measures to evaluate financial results and manage
operations. The release and the attachments to this release provide
a reconciliation of each of the Non-GAAP measures referred to in
this release to the most directly comparable GAAP measure. The
Non-GAAP financial measures are not meant to be considered a
substitute for the corresponding GAAP financial statements and
investors should evaluate them carefully. These Non-GAAP financial
measures may differ materially from the Non-GAAP financial measures
used by other companies.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP
MEASURES
($ in ‘000’s, except per share amounts)
CALCULATION
OF EBITDA
|
|
Three Months
ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income:
|
$545
|
$226
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization
|
285
|
374
|
|
Interest
income
|
(1)
|
(58)
|
|
Income tax
expense
|
163
|
80
|
|
EBITDA:
|
$992
|
$622
|
CALCULATION
OF NON-GAAP NET INCOME
|
|
Three Months
ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income:
|
$545
|
$0.14
|
$226
|
$0.06
|
|
Adjustments:
|
|
|
|
|
|
Amortization of
intangible assets (1)
|
117
|
0.03
|
172
|
0.04
|
|
Stock-based
compensation (2)
|
63
|
0.02
|
45
|
0.01
|
|
Tax impact of
adjustments (3)
|
(38)
|
(0.01)
|
(46)
|
(0.01)
|
|
Non-GAAP net
income:
|
$687
|
$0.18
|
$397
|
$0.10
|
1)
The adjustments
represent the amortization of intangible assets related to acquired
assets and companies.
2)
The adjustments
represent stock-based compensation expense related to awards of
stock options, restricted stock units or common stock in exchange
for services. Although the Company expects to continue to award
stock in exchange for services, the amount of stock-based
compensation is excluded as it is subject to change as a result of
one-time or non-recurring projects.
3)
This adjustment
gives effect to the tax impact of all non-GAAP adjustments at the
current Federal rate of 21%.
Conference Call Information
To participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call.
Date: May 6, 2021
Time: 4:30 PM ET
Participant: 877-407-8133 | 201-689-8040
Live Webcast: https://www.webcaster4.com/Webcast/Page/842/40843
Conference Call Replay Information
The replay will be available beginning approximately 1 hour after
the completion of the live event, ending at midnight eastern on May
20, 2021.
International:
919.882.2331
Web replay: http://www.issuerdirect.com/earnings-calls-and-scripts/
About Issuer Direct Corporation
Issuer Direct®
is an
industry-leading communications and compliance company
focusing on the needs of corporate issuers. Issuer Direct's
principal platform, Platform id.
™,
empowers users by thoughtfully integrating the most relevant tools,
technologies, and services, thus eliminating the complexity
associated with producing and distributing financial and business
communications. Headquartered in Raleigh, NC, Issuer Direct serves
thousands of public and private companies globally. For more
information, please visit www.issuerdirect.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (which Sections were adopted as part of the
Private Securities Litigation Reform Act of 1995). Statements
preceded by, followed by or that otherwise include the words
"believe," "anticipate," "estimate," "expect," "intend," "plan,"
"project," "prospects," "outlook," and similar words or
expressions, or future or conditional verbs, such as "will,"
"should," "would," "may," and "could," are generally
forward-looking in nature and not historical facts. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company's
actual results, performance, or achievements to be materially
different from any anticipated results, performance, or
achievements for many reasons including the impact of the
coronavirus pandemic. The Company disclaims any intention to, and
undertakes no obligation to, revise any forward-looking statements,
whether as a result of new information, a future event, or
otherwise. For additional risks and uncertainties that could impact
the Company's forward-looking statements, please see the Company's
Annual Report on Form 10-K for the year ended December 31, 2020,
including but not limited to the discussion under "Risk Factors"
therein, which the Company filed with the SEC and which may be
viewed at http://www.sec.gov/.
For Further Information:
Issuer Direct Corporation
Brian R. Balbirnie
(919)-481-4000
brian.balbirnie@issuerdirect.com
Hayden IR
Brett Maas
(646)-536-7331
brett@haydenir.com
Hayden IR
James Carbonara
(646)-755-7412
james@haydenir.com
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$20,548
|
$19,556
|
|
Accounts
receivable (net of allowance for doubtful accounts of $651 and
$657, respectively)
|
2,966
|
2,514
|
|
Other
current assets
|
383
|
298
|
|
Total
current assets
|
23,897
|
22,368
|
|
Capitalized
software (net of accumulated amortization of $2,893 and $2,761,
respectively)
|
394
|
526
|
|
Fixed
assets (net of accumulated amortization of $348 and $312,
respectively)
|
775
|
795
|
|
Right-of-use asset
– leases
|
1,756
|
1,830
|
|
Other
long-term assets
|
93
|
88
|
|
Goodwill
|
6,376
|
6,376
|
|
Intangible
assets (net of accumulated amortization of $5,663 and $5,546,
respectively)
|
2,789
|
2,906
|
|
Total assets
|
$36,080
|
$34,889
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$589
|
$304
|
|
Accrued
expenses
|
2,098
|
1,805
|
|
Income
taxes payable
|
358
|
258
|
|
Deferred
revenue
|
2,383
|
2,212
|
|
Total
current liabilities
|
5,428
|
4,579
|
|
Deferred
income tax liability
|
262
|
197
|
|
Lease liabilities
– long-term
|
1,890
|
1,971
|
|
Total liabilities
|
7,580
|
6,747
|
|
Commitments
and contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock, $0.001 par value, 1,000,000 shares authorized, no shares
issued and outstanding as of March 31, 2021 and December 31, 2020,
respectively.
|
—
|
—
|
|
Common stock $0.001 par value,
20,000,000 shares authorized, 3,765,975 and 3,770,752 shares issued and outstanding as
of March 31, 2021 and December 31, 2020,
respectively.
|
4
|
4
|
|
Additional
paid-in capital
|
22,024
|
22,214
|
|
Other
accumulated comprehensive loss
|
(16)
|
(19)
|
|
Retained
earnings
|
6,488
|
5,943
|
|
Total stockholders' equity
|
28,500
|
28,142
|
|
Total liabilities and stockholders’ equity
|
$36,080
|
$34,889
|
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in
thousands, except share and per share amounts)
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$4,980
|
$4,016
|
|
Cost of
revenues
|
1,394
|
1,253
|
|
Gross
profit
|
3,586
|
2,763
|
|
Operating costs and
expenses:
|
|
|
|
General and
administrative
|
1,404
|
1,216
|
|
Sales and marketing
expenses
|
1,074
|
896
|
|
Product
development
|
249
|
194
|
|
Depreciation and
amortization
|
152
|
209
|
|
Total operating
costs and expenses
|
2,879
|
2,515
|
|
Operating
income
|
707
|
248
|
|
Interest income,
net
|
1
|
58
|
|
Net income before
income taxes
|
708
|
306
|
|
Income tax
expense
|
163
|
80
|
|
Net
income
|
$545
|
$226
|
|
Income per share
– basic
|
$0.15
|
$0.06
|
|
Income per share
– fully diluted
|
$0.14
|
$0.06
|
|
Weighted average
number of common shares outstanding – basic
|
3,769
|
3,788
|
|
Weighted average
number of common shares outstanding – fully
diluted
|
3,817
|
3,824
|
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in
thousands)
|
|
For the Three Months Ended
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
Net
income
|
$545
|
$226
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
and amortization
|
285
|
374
|
|
Bad
debt expense
|
28
|
93
|
|
Deferred
income taxes
|
(15)
|
(42)
|
|
Non-cash
interest expense
|
—
|
6
|
|
Stock-based
compensation expense
|
63
|
45
|
|
Changes
in operating assets and liabilities:
|
|
|
|
Decrease
(increase) in accounts receivable
|
(484)
|
(219)
|
|
Decrease
(increase) in other assets
|
(16)
|
32
|
|
Increase
(decrease) in accounts payable
|
287
|
118
|
|
Increase
(decrease) in accrued expenses
|
398
|
(105)
|
|
Increase
(decrease) in deferred revenue
|
178
|
74
|
|
Net
cash provided by operating activities
|
1,269
|
602
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
Purchase
of fixed assets
|
(16)
|
—
|
|
Net
cash used in investing activities
|
(16)
|
—
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
Exercise
of stock options
|
199
|
—
|
|
Payment
for stock repurchase and retirement
|
(452)
|
(203)
|
|
Net
cash used in financing activities
|
(253)
|
(203)
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
1,000
|
399
|
|
Cash
– beginning
|
19,556
|
15,766
|
|
Currency
translation adjustment
|
(8)
|
32
|
|
Cash
and cash equivalents – ending
|
$20,548
|
$16,197
|
|
|
|
|
|
Supplemental disclosures:
|
|
|
|
Cash
paid for income taxes
|
$—
|
$10
|
SOURCE: Issuer Direct
Corporation