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
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,
Land Titles Registry, Land Survey and Geomatics
Personal Property Registry
Operating, general and administrative expenses
EBITDA Margin2 (% of Revenues)
Adjusted EBITDA Margin2
Net Income and total comprehensive income
Earnings per share, basic3
Earnings per share excluding tax, basic
Free cash flow2
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
The calculation of earnings per share is based on net income after tax
and the weighted average number of shares outstanding during the
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
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
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
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.
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
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
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
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 firstname.lastname@example.org
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
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
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
For further information:
Toll Free: 1-855-341-8363 in North America or 1-306-798-1137
Toll Free: 1-855-341-8363 in North America or 1-306-798-1137