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8-K - CURRENT REPORT - ISSUER DIRECT CORP | isdr_8k.htm |
Exhibit
99.1
Platform and Technology Revenue Increased 24% to $3.3 million, 68%
of Total Revenue; Year-over-Year EBITDA margins more than doubled
to 28% or $1.4 Million
RALEIGH, NC / ACCESSWIRE / July
30, 2020 / 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 June 30, 2020.
Brian
Balbirnie, CEO of Issuer Direct, commented, "The second quarter was
a record quarter for us in terms of top-line revenue, operating
income, EBITDA and cash flow from operations, as we benefited from
our virtual product line-up and continued newswire
expansion.”
Mr. Balbirnie continued, “Looking at our growth drivers, they
were threefold. First, ACCESSWIRE continues to be a steady
contributor to our top line results, growing 19% year-over-year.
This is a product offering we believe can continue its strong
growth in both customer counts and revenue for years to come.
Secondly, despite the current environment caused by the COVID-19
pandemic, the rest of our business performed well and exceeded our
expectations in many ways. We believe this is a good indicator for
us as we move to the back half of the year. Finally, in terms of
new offerings, we delivered on our product pivot with a virtual
focus, which supported our revenue growth, increased our
profitability and also drove our overall platform branding and
marketplace awareness.”
Mr. Balbirnie concluded, “It is encouraging to see the growth
in revenue and EBITDA margins in the quarter. We remain committed
to continue the innovation of our products, the search for
acquisition targets in the communications industry and the drive to
increase market awareness through our sales and marketing
teams.”
Second Quarter 2020 Highlights:
●
Revenue - Total revenue was $4,884,000, an 18% increase
from $4,138,000 in Q2 2019 and a 22% increase from $4,016,000 in Q1
2020. Platform and Technology revenue increased 24% from Q2 2019
and 23% from Q1 2020. The increase in Platform and Technology
revenue was due to an increase in webcasting revenue as a result of
our new virtual products, increased revenue from our newswire
business and additional subscriptions of Platform
id.
Platform & Technology revenue
increased to 68% of total revenue for Q2 2020, compared to 64% for
Q2 2019. Services revenue increased 7% from Q2 2019 and 19% from Q1
2020.
●
Gross Margin
- Gross margin for Q2 2020 was
$3,522,000, or 72% of revenue, compared to $2,888,000, or 70% of
revenue, during Q2 2019 and $2,763,000, or 69%, in Q1 2020.
Platform and Technology gross margin was 78%, compared to 73% in Q2
2019 and 74% in Q1 2020. The increase in gross margin is primarily
related to the increase in revenue from our virtual
products.
●
Operating Income
- Operating income was $1,001,000 for Q2 2020, as
compared to $130,000 during Q2 2019. The increase in operating
income is due to the increase in gross margin as well as a decrease
in operating expenses. General and Administrative Expenses
decreased $125,000, or 9%, primarily due to a decrease in bad debt
expense due to a large reserve in Q2 2019. Product development
expense decreased $178,000, or 52% from Q2 2019 due to a decrease
in headcount.
●
Net Income - Net income was $772,000, or $0.21 per diluted
share, during Q2 2020, compared to $212,000, or $0.05 per diluted
share, during Q2 2019.
●
Operating Cash Flows
- Cash flows from operations for Q2
2020 were $1,477,000 compared to $259,000 in Q2 2019 and $602,000
in Q1 2020.
●
Non-GAAP Measures
– Q2 2020 EBITDA was $1,354,000, or 28% of revenue,
compared to $550,000, or 13% of revenue, during Q2 2019. Non-GAAP
net income for Q2 2020 was $974,000, or $0.26 per diluted share,
compared to $477,000, or $0.12 per diluted share, during Q2
2019.
●
Stock Repurchase Plan
– During the quarter, the
Company repurchased an additional 62,198 of its shares at a total
aggregate value of $580,000, under the Company’s $2,000,000
share repurchase program originally announced on August 7, 2019 and
increased on March 16, 2020. As of June 30, 2020, we have purchased
a total of 160,068 shares under the stock repurchase
plan.
First Half 2020 Highlights:
●
Revenue - Total revenue was $8,900,000, a 7% increase from
$8,317,000 during the first half of 2019. The increase in Platform
and Technology revenue was due to an increase in webcasting revenue
as a result of our new virtual products, increased revenue from our
newswire business and additional subscriptions of Platform
id.
Platform & Technology revenue
increased to 67% of total revenue for the first half of 2020,
compared to 64% for the first half of 2019. Services revenue
decreased 3% from the first half of 2019.
●
Gross Margin
- Gross margin for the first half of
2020 was $6,285,000, or 71% of revenue, compared to $5,765,000, or
69% of revenue, during the first half of 2019. Platform and
Technology gross margin was 76%, compared to 74% during the first
half of 2019. The increase in gross margin is primarily related to
the increase in revenue from our virtual
products.
●
Operating Income
- Operating income was $1,249,000 for the first half
of 2020, as compared to $277,000 during the first half of 2019. The
increase in operating income is due to the increase in gross margin
as well a decrease in operating expenses as noted for Q2
2020.
●
Net Income - Net income was $998,000, or $0.26 per diluted
share, during the first half of 2020, compared to $417,000, or
$0.11 per diluted share, during the first half of
2019.
●
Operating Cash Flows
- Cash flows from operations for the
first half of 2020 were $2,079,000 compared to $795,000 during the
first half of 2019.
●
Non-GAAP Measures
– EBITDA for the first half of
2020 was $1,976,000, or 22% of revenue, compared to $1,108,000, or
13% of revenue, during the first half of 2019. Non-GAAP net income
for the first half of 2020 was $1,372,000, or $0.36 per diluted
share, compared to $995,000, or $0.26 per diluted share, during the
first half of 2019.
1
Key Performance Indicators:
●
During
the quarter, the Company worked with 1,477 publicly traded
customers, compared to 1,440 during the same period last
year.
●
During
the quarter, the Company worked with 1,390 privately held customers
compared to 997 during the same period last year.
●
During the quarter we signed 35 new
Platform id.
subscriptions to new or existing
customers with a total annual contract value of
$225,000.
●
Total Platform id.
subscriptions as of June 30, 2020 were
295, with an annual contract value of $2,228,000, compared to 273
subscriptions with an annual contract value of $2,098,000 as of
March 31, 2020.
Non-GAAP
Information
Certain Non-GAAP financial measures are included in this press
release. In the calculation of these measures, the Company excludes
certain items, such as amortization of intangible assets,
stock-based compensation, integration and acquisition costs, the
impact of discrete items impacting income tax expense and tax
impact of adjustments. The Company believes that excluding such
items provides investors and management with a representation of
the Company's core operating performance and with information
useful in assessing its prospects for the future and underlying
trends in the Company's operating expenditures and continuing
operations. Management uses such Non-GAAP measures to evaluate
financial results and manage operations. The release and the
attachments to this release provide a reconciliation of each of the
Non-GAAP measures referred to in this release to the most directly
comparable GAAP measure. TheNon-GAAP financial measures are not
meant to be considered a substitute for the corresponding GAAP
financial statements and investors should evaluate them carefully.
These Non-GAAP financial measures may differ materially from the
Non-GAAP financial measures used by other companies.
CALCULATION OF EBITDA
($ in ‘000’s)
|
Three Months
ended June 30,
|
|
|
2020
|
2019
|
|
Amount
|
Amount
|
|
|
|
Net
income:
|
$772
|
$212
|
Adjustments:
|
|
|
Depreciation and
amortization
|
353
|
419
|
Interest expense
(income)
|
(1)
|
(114)
|
Income tax
expense
|
230
|
33
|
EBITDA:
|
$1,354
|
$550
|
|
Six Months ended
June 30,
|
|
|
2020
|
2019
|
|
Amount
|
Amount
|
|
|
|
Net
income:
|
$998
|
$417
|
Adjustments:
|
|
|
Depreciation and
amortization
|
727
|
831
|
Interest expense
(income)
|
(59)
|
(186)
|
Income tax
expense
|
310
|
46
|
EBITDA:
|
$1,976
|
$1,108
|
2
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP
MEASURES
($ in ‘000’s, except per share amounts)
|
Three Months
ended June 30,
|
|||
|
2020
|
2019
|
||
|
Amount
|
Per diluted
share
|
Amount
|
Per diluted
share
|
|
|
|
|
|
Net
income:
|
$772
|
$0.20
|
$212
|
$0.05
|
Adjustments:
|
|
|
|
|
Amortization of
intangible assets (1)
|
172
|
0.05
|
191
|
0.05
|
Stock-based
compensation (2)
|
84
|
0.02
|
131
|
0.03
|
Tax impact of
adjustments (4)
|
(54)
|
(0.01)
|
(68)
|
(0.02)
|
Impact of discrete
items impacting income tax expense (5)
|
—
|
—
|
11
|
0.01
|
Non-GAAP net
income:
|
$974
|
$0.26
|
$477
|
$0.12
|
|
Six Months ended
June 30,
|
|||
|
2020
|
2019
|
||
|
Amount
|
Per diluted
share
|
Amount
|
Per diluted
share
|
|
|
|
|
|
Net
income:
|
$998
|
$0.27
|
$417
|
$0.11
|
Adjustments:
|
|
|
|
|
Amortization of
intangible assets (1)
|
344
|
0.09
|
382
|
0.10
|
Stock-based
compensation (2)
|
129
|
0.03
|
268
|
0.07
|
Integration and
acquisition costs (3)
|
—
|
—
|
112
|
0.03
|
Tax impact of
adjustments (4)
|
(99)
|
(0.03)
|
(160)
|
(0.04)
|
Impact of discrete
items impacting income tax expense (5)
|
—
|
—
|
(24)
|
(0.01)
|
Non-GAAP net
income:
|
$1,372
|
$0.36
|
$995
|
$0.26
|
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 highly variable based on the
stock price and not tied directly to the operations of the
business.
3)
The adjustments
represent legal and accounting fees and other non-recurring costs
in connection with the acquisition of VisualWebcaster
Platform.
4)
This adjustment
gives effect to the tax impact of all non-GAAP adjustments at the
current Federal rate of 21%.
5)
The adjustments
eliminate discrete items impacting income tax expense. For the
periods ended June 30, 2019, the discrete items relate to either
the excess or shortfall stock-based compensation benefit recognized
in income tax expense during the period.
3
Conference Call Information
To
participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call.
Date:
July 30, 2020
Time:
4:30 PM ET
Participant:
877-407-8133 | 201-689-8040
Live Webcast: https://www.webcaster4.com/Webcast/Page/842/36011
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 August
13, 2020.
Toll-free: 877.481.4010
International: 919.882.2331
Reference ID: 36011
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, 2019 and
Form 10-Q for the quarter ended June 30, 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
SOURCE: Issuer Direct
Corporation
4
ISSUER DIRECT CORPORATION AND
SUBSIDIARIES
(in
thousands, except share and per share amounts)
|
June 30,
|
December 31,
|
|
2020
|
2019
|
ASSETS
|
(unaudited)
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$17,097
|
$15,766
|
Accounts
receivable (net of allowance for doubtful accounts of $601 and
$700, respectively)
|
2,599
|
2,051
|
Income
tax receivable
|
—
|
48
|
Other
current assets
|
273
|
141
|
Total
current assets
|
19,969
|
18,006
|
Capitalized
software (net of accumulated amortization of $2,472 and $2,153,
respectively)
|
815
|
1,134
|
Fixed
assets (net of accumulated amortization of $245 and $181,
respectively)
|
839
|
899
|
Right-of-use asset
– leases
|
1,979
|
2,127
|
Deferred tax
asset
|
292
|
256
|
Other
long-term assets
|
64
|
77
|
Goodwill
|
6,376
|
6,376
|
Intangible
assets (net of accumulated amortization of $5,281 and $4,937,
respectively)
|
3,171
|
3,515
|
Total assets
|
$33,505
|
$32,390
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$430
|
$266
|
Accrued
expenses
|
1,385
|
1,151
|
Note payable
– short-term (net of discount of $6 and $19,
respectively)
|
314
|
301
|
Income
taxes payable
|
614
|
310
|
Deferred
revenue
|
2,015
|
1,812
|
Total
current liabilities
|
4,758
|
3,840
|
Deferred
income tax liability
|
130
|
141
|
Lease liabilities
– long-term
|
2,138
|
2,309
|
Total liabilities
|
7,026
|
6,290
|
Commitments
and contingencies
|
|
|
Stockholders'
equity:
|
|
|
Preferred
stock, $0.001 par value, 1,000,000 shares authorized, no shares
issued and outstanding as of June 30, 2020 and December 31, 2019,
respectively.
|
—
|
—
|
Common stock $0.001 par value,
20,000,000 shares authorized, 3,734,502 and 3,786,398 shares issued and outstanding as
of June 30, 2020 and December 31, 2019,
respectively.
|
4
|
4
|
Additional
paid-in capital
|
21,619
|
22,275
|
Other
accumulated comprehensive income (loss)
|
21
|
(16)
|
Retained
earnings
|
4,835
|
3,837
|
Total stockholders' equity
|
26,479
|
26,100
|
Total liabilities and stockholders’ equity
|
$33,505
|
$32,390
|
5
ISSUER DIRECT CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in
thousands, except share and per share amounts)
|
For the Three
Months Ended
|
For the Six
Months Ended
|
||
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2020
|
2019
|
2020
|
2019
|
Revenues
|
$4,884
|
$4,138
|
$8,900
|
$8,317
|
Cost of
revenues
|
1,362
|
1,250
|
2,615
|
2,552
|
Gross
profit
|
3,522
|
2,888
|
6,285
|
5,765
|
Operating costs and
expenses:
|
|
|
|
|
General and
administrative
|
1,197
|
1,322
|
2,413
|
2,683
|
Sales and marketing
expenses
|
950
|
875
|
1,846
|
1,695
|
Product
development
|
165
|
343
|
359
|
680
|
Depreciation and
amortization
|
209
|
218
|
418
|
430
|
Total operating
costs and expenses
|
2,521
|
2,758
|
5,036
|
5,488
|
Operating
income
|
1,001
|
130
|
1,249
|
277
|
Interest income
(expense), net
|
1
|
115
|
59
|
186)
|
Income before
income taxes
|
1,002
|
245
|
1,308
|
463
|
Income tax
expense
|
230
|
33
|
310
|
46
|
Net
income
|
$772
|
$212
|
$998
|
$417
|
Income per share
– basic
|
$0.21
|
$0.05
|
$0.27
|
$0.11
|
Income per share
– fully diluted
|
$0.21
|
$0.05
|
$0.26
|
$0.11
|
Weighted average
number of common shares outstanding – basic
|
3,736
|
3,857
|
3,762
|
3,854
|
Weighted average
number of common shares outstanding – fully
diluted
|
3,761
|
3,873
|
3,789
|
3,871
|
6
ISSUER DIRECT CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in
thousands)
|
For the Six Months Ended
|
|
|
June 30,
|
June 30,
|
|
2020
|
2019
|
Cash flows from operating activities:
|
|
|
Net
income
|
$998
|
$417
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation
and amortization
|
727
|
831
|
Bad
debt expense
|
182
|
555
|
Deferred
income taxes
|
(51)
|
6
|
Non-cash
interest expense
|
13
|
13
|
Stock-based
compensation expense
|
129
|
268
|
Changes
in operating assets and liabilities:
|
|
|
Decrease
(increase) in accounts receivable
|
(730)
|
(1,384)
|
Decrease
(increase) in other assets
|
77
|
(266)
|
Increase
(decrease) in accounts payable
|
164
|
67
|
Increase
(decrease) in accrued expenses and other liabilities
|
367
|
(87)
|
Increase
(decrease) in deferred revenue
|
203
|
375
|
Net
cash provided by operating activities
|
2,079
|
795
|
|
|
|
Cash flows from investing activities:
|
|
|
Purchase
of VisualWebcaster Platform
|
—
|
(2,788)
|
Capitalized
software
|
—
|
(20)
|
Purchase
of fixed assets
|
(4)
|
(6)
|
Net
cash used in investing activities
|
(4)
|
(2,814)
|
|
|
|
Cash flows from financing activities:
|
|
|
Payment
for stock repurchase and retirement
|
(785)
|
—
|
Net
cash used in financing activities
|
(785)
|
—
|
|
|
|
Net
change in cash
|
1,290
|
(2,019)
|
Cash
– beginning
|
15,766
|
17,222
|
Currency
translation adjustment
|
41
|
(7)
|
Cash
– ending
|
$17,097
|
$15,196
|
|
|
|
Supplemental disclosures:
|
|
|
Cash
paid for income taxes
|
$12
|
$128
|
Non-cash activities:
|
|
|
Right-of-use
assets obtained in exchange for lease liabilities
|
$—
|
$260
|
7