REGINA, May 8, 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 first quarter
ended March 31, 2014.
Highlights of ISC's Q1 2014 financial results
- Total revenue was $17.4 million
for the three months ended March 31,
2014, an increase of $0.3
million or 1.9 per cent, compared to $17.1 million for the three months ended
March 31, 2013.
- EBITDA (earnings before interest, taxes, depreciation and
amortization) for the first quarter of 2014 was $5.0 million compared to $4.6 million in the first quarter of 2013, an
increase of 8.3 per cent. ISC's EBITDA margin for the first quarter
of 2014 was 28.6 per cent compared to 26.1 per cent in the first
quarter of 2013.
- Adjusted EBITDA was $5.0 million
for the quarter compared to $5.4
million in the same quarter last year, with ISC generating
an Adjusted EBITDA margin of 28.6 per cent for the quarter compared
to 31.6 per cent in the first quarter of 2013, reflecting
adjustments for cost associated with the Initial Public Offering
("IPO") and discontinued operations.
- Net income for the three months ended March 31, 2014 was $2.8
million, or $0.16 per share.
In the first quarter last year, net income was $3.0 million; however, for comparative purposes,
it is important to note that ISC was not subject to tax for the
first quarter in 2013. Excluding the first quarter's tax expense
and discontinued operations, ISC generated an increase in income
over the first quarter of 2013 of $0.5
million, or 14.2 per cent.
Commenting on the Company's quarterly results, Jeff Stusek, President and CEO stated, "I am
pleased with the start we have made to the year. We delivered a
solid performance and continue to maintain a healthy balance sheet.
Our focus remains on ensuring the continuity of our business and
progressively exploring various opportunities which will create
added value for our customers as well as for our shareholders."
Management's Discussion of ISC's Summary Quarterly Financial
Results
(Thousands of CAD
dollars,
except earnings per share and where noted) |
Three months ended March
31, |
2014 |
2013 |
|
|
|
Revenue |
|
|
Land
Titles Registry, Land Survey and Geomatics |
$ 13,026 |
$ 12,753 |
Personal Property Registry |
$ 2,112 |
$ 2,114 |
Corporate Registry |
$ 2,264 |
$ 2,207 |
Other |
$ 3 |
$ 3 |
Total Revenue1 |
$ 17,405 |
$ 17,077 |
|
|
|
Operating, general and administrative
expenses |
$ 12,422 |
$ 12,150 |
|
|
|
EBITDA2 |
$ 4,983 |
$ 4,600 |
EBITDA Margin2 (% of Revenues) |
28.6% |
26.1% |
Adjusted EBITDA2 |
$ 4,983 |
$ 5,396 |
Adjusted EBITDA Margin2 |
28.6% |
31.6% |
Net Income and total comprehensive income |
$ 2,799 |
$ 3,032 |
Earnings per share, basic3 |
$ 0.16 |
- |
Earnings per share excluding tax, basic |
$ 0.22 |
- |
Free cash flow2 |
$ 4,180 |
$ 3,608 |
- Revenue does not include the Vital Statistics Registry, which
is reflected as a discontinued operation.
- 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 first quarter ended March 31,
2014.
- 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 and Geomatics
was $13.0 million for the three
months ended March 31, 2014, an
increase of $0.3 million, or 2.1 per
cent, compared to the three months ended March 31, 2013. Revenue from the Land Titles
Registry remained strong due to the increases in average prices of
existing homes, which offset a decrease in ownership transfer
volumes.
- Revenue for the Personal Property Registry (the "PPR") for the
three months ended March 31, 2014 was
$2.1 million, which is consistent
with revenues for the same period in 2013. The main driver of
revenue for this registry - personal property security registration
set-ups - has shown a slight increase in volume and small decrease
in revenue, as the price per registration is variable based on the
nature and term of the security agreement.
- Revenue for the Corporate Registry for the three months ended
March 31, 2014 was $2.3 million, a 2.6 per cent increase compared to
the $2.2 million for the three months
ended March 31, 2013. Volume and
revenue across most activities in the Corporate Registry were
higher for the quarter compared to the same period in 2013, with
revenue from filing of annual returns leading the way with a 5.6
per cent increase, while incorporations revenue was up 2.8 per
cent.
- Operating, general and administrative expenses were
$12.4 million for the three months
ended March 31, 2014 compared to
$12.1 million for the three months
ended March 31, 2013, an increase of
$0.3 million or 2.2 per cent. The
increase was due to information technology services costs and an
increase in expenses to support the requirements of a publicly
traded company.
- Depreciation and amortization decreased by $0.4 million for the three months ended
March 31, 2014 compared to the same
period of 2013. The decline in the first quarter as compared to the
same period last year was due to certain projects reaching a fully
amortized state in 2013. In addition, there was less
investment in new projects as the Company continues to evaluate its
new projects to ensure they support long-term objectives.
- Net income and total comprehensive income for the three months
ended March 31, 2014 was $2.8 million, or $0.16 per share, compared to $3.0 million for the same period in 2013. The
decrease is primarily a result of income tax expense being recorded
in the first quarter of 2014 with ISC becoming a taxable entity
effective June 27, 2013.
- Adjusted EBITDA totalled $5.0
million for the three months ended March 31, 2014 compared to $5.4 million for the same period in 2013 as a
result of adjustments made to 2013 for one-time expenses associated
with the IPO and for the net loss from discontinued operations.
- As of March 31, 2014, the Company
held cash of $24.7 million and had
long-term debt of approximately $9.9
million.
Outlook
According to Bank of Montreal
("BMO") Capital Markets'1 most recent economic forecast
for Saskatchewan, the provincial
economy is expected to post real gross domestic product
("GDP") growth of 2.5 per cent growth in 2014. Royal Bank of
Canada's Economics
Research2 projection for 2014 is currently 2.0 per
cent.
Employment growth in Saskatchewan was up 3.4 per cent in
20133 while average weekly earnings4 rose 3.5
per cent from January 2013 to
January 2014. Manufacturing
sales5 rose 10.3 percent to approximately $16.4 billion from January
2013 to January 2014.
Canada Mortgage and Housing Corporation ("CMHC") Housing Market
Outlook6 currently forecasts a slight increase in
existing home sales volumes in Saskatchewan for 2014. Average home resale
prices are expected to increase marginally in 2014 by 2.4 per cent.
While mortgage rates have begun to increase modestly, they are
forecast to remain favorable in 2014, all of which has the
potential to impact our Land Titles Registry.
Patterns of retail trade and new vehicle sales provide a useful
metric for expected revenues in the PPR. From January to
December 2013,
retail trade7 in Saskatchewan grew 3.0 per cent. New vehicle
sales8 increased 4.6 per cent from January to
December 2013. While the first two
months of 2014 saw new motor vehicle sales decrease by 8.6 per cent
compared to the same period in 2013, Scotiabank9 is
forecasting slight increases in annual motor vehicles sales for
2014 over 2013.
Consistent with the above economic forecasts, the Company
maintains its outlook for 2014, expecting revenue to remain stable
based on the moderate economic growth expectations for Saskatchewan. We also continue to anticipate a
modest increase in operating, general and administrative expenses
based on inflation as well as the costs associated with being a
publicly traded company. Capital expenditures are expected to be
between $8.0 million and $10.0
million and annual EBITDA margins in 2014 are expected to
return to the normalized level of approximately 35 per cent.
Note to Readers:
This news release provides a general summary of Information
Services Corporation's results for the first quarters ended
March 31, 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/index.php?s=63. 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
9:00 a.m. Saskatchewan Time;
11:00 a.m. Eastern Time on
May 9, 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/1338747/1479863
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 March 31, 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.
1 BMO Capital Markets Economics - Provincial Economic
Outlook - April 2014
2 RBC Economics Provincial Outlook - March 2014
3 Statistics Canada CANSIM Table 282-0002: Labour force
survey estimates (LFS), by sex and detailed age group,
annual,province - April 2014
4 Statistics Canada CANSIM Table 281-0063:
Employment and average weekly earnings including overtime (SEPH),
seasonally adjusted, for all employees by industries classified
using the NAICS, monthly (persons unless otherwise noted) -
April 2014
5 Statistics Canada CANSIM Table 304-0015: Manufacturing
Sales by (NAICS) and province - March
2014
6 CMHC Housing Market Outlook - Canadian Edition - First
Quarter 2014
7 Statistics Canada CANSIM Table 080-0020: Retail
trade, by province and territory (Monthly- Seasonally Adjusted)-
April 2014
8 Statistics Canada CANSIM Table 079-0003: New motor
vehicle sales, Canada, provinces
and territories - April 2014
9 Scotiabank Global Economics - Global Forecast Update,
March 26, 2014.
SOURCE Information Services Corporation