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8-K - CURRENT REPORT - ISSUER DIRECT CORP | isdr_8k.htm |
Exhibit 99.1
Issuer Direct Reports Fourth Quarter and Full Year 2020
Results
Communications Revenue Increased 32% to $3.1 million or 65% of
Total Revenue During the Fourth Quarter, Capping a Record Year of
Revenue, EBITDA, Cash Flow from Operations and
Customers
RALEIGH, NC / ACCESSWIRE / March 4, 2021 / Issuer
Direct Corporation (NYSE
American: ISDR) (the
"Company"), an industry-leading communications company, today reported its operating
results for the three months and full year ended December 31,
2020.
Brian Balbirnie, CEO of Issuer Direct, commented, "I am pleased
that 2020 was a successful year in many ways for our company. We
closed the year strong and delivered record fourth quarter
revenues, up 20% over last year. Our full year 2020 revenue growth
was fueled by ACCESSWIRE, demand for virtual events and additional
licenses of Platform id. Year-over-year, EBITDA increased 93% and diluted
earnings per share tripled. Lastly, cash flows from operations for
the year increased to $4.4 million, up from $2.9 million last
year.”
Mr. Balbirnie continued, “As you will see in the discussion
below, we have classified our revenues to align with our strategy
of becoming a leading communications company combined with our
traditional compliance business. As we continue to differentiate
our business lines, this distinction is essential information for
our shareholders and markets and allows us to better define our
target customer profile. In keeping with this focus, our
communications business grew 32% for the fourth quarter and 28% for
the year. We believe we can continue to grow our communications
business as we further define our brand and become a leading
communications platform serving companies telling their story and
connecting with their stakeholders.”
Mr. Balbirnie concluded, “Looking ahead to this year, we are
excited with our existing platform offerings and the number of new
features we plan to release to our customers globally during 2021.
As we further execute our strategy of becoming a leading
communications platform, we expect to see customer count numbers
continue to grow and revenue from new products to emerge from our
planned platform advancements. We also anticipate continued revenue
growth from our private company customers – who are leading
the growth in our overall customer counts.”
Fourth Quarter 2020 Highlights:
●
Revenue - Total revenue was $4,744,000, a 20% increase
from $3,959,000 in Q4 2019 and down 3% from $4,882,000 in Q3 2020.
Revenue from our Communications business increased 32% from Q4 2019
and down 8% from Q3 2020. The increase from prior year was due to
growth in ACCESSWIRE revenue due to increased customer counts, an
increase in webcasting and conference software revenue as a result
of our new virtual products and additional subscriptions to
Platform id.
The decrease from Q3 2020 was due to
less revenue from our conference software due to seasonality and
less events during the fourth quarter. Communications revenue
increased to 65% of total revenue for Q4 2020, compared to 59% for
Q4 2019. Revenue from our Compliance business increased 2% from Q4
2019 and 8% from Q3 2020. The increase from Q4 2019 is primarily
due to an increase in revenue from print and proxy services and the
increase from Q3 2020 is due to an increase in transfer agent
service revenue.
●
Gross Margin
- Gross margin for Q4 2020 was
$3,331,000, or 70% of revenue, compared to $2,653,000, or 67% of
revenue, during Q4 2019 and $3,495,000, or 72% in Q3 2020.
Communications gross margin was 73%, compared to 70% in Q4 2019 and
74% in Q3 2020. The increase in gross margin year over year is
primarily related to the increase in revenue from ACCESSWIRE and
our virtual products.
●
Operating Income
- Operating income was $369,000 for Q4 2020, as
compared to $17,000 during Q4 2019. The increase in operating
income is due to the increase in gross margin partially offset by
an increase in operating expenses. The increase in operating
expenses is primarily due to a one-time accrual related to a sales
and use tax analysis completed during the quarter of
$350,000.
●
Net Income - Net income was $319,000, or $0.08 per diluted
share, during Q4 2020, compared to $69,000, or $0.02 per diluted
share, during Q4 2019.
●
Operating Cash Flows
- Cash flows from operations for Q4
2020 were $986,000 compared to $909,000 in Q4
2019.
●
Non-GAAP Measures
– Q4 2020 EBITDA was $745,000, or 16% of revenue,
compared to $423,000, or 11% of revenue, during Q4 2019. Non-GAAP
net income for Q4 2020 was $682,000, or $0.32 per diluted share,
compared to $261,000, or $0.07 per diluted share, during Q4
2019.
Full Year 2020 Highlights:
●
Revenue - Total revenue was $18,526,000, a 14% increase
from $16,295,000 in 2019, led by our Communications revenue, which
increased 28% compared to 2019. The increase in Communications
revenue was due to an increase in ACCESSWIRE revenue, revenue from
our webcasting and conference software and additional subscriptions
to Platform id.
Communications revenue increased to
64% of total revenue compared to 57% during 2019. Compliance
revenue decreased 6% from 2019 due to lower revenue from ARS
services and our transfer agent services due to a combination of
less corporate actions and directives as well as a shift from
paper-based transactions to electronic processing. These decreases
were partially offset by an increase in print and proxy fulfillment
services.
●
Gross Margin
- Gross margin was $13,111,000, or 71%
of revenue, compared to $11,215,000, or 69% of revenue, during
2019. Communications gross margin was 73%, compared to 72% during
2019. The increase in gross margin is primarily related to the
increase in revenue from our Communications
business.
●
Operating Income
- Operating income was $2,694,000 compared to
$474,000 during 2019. The increase in operating income is due to
the increase in gross margin as well a decrease in operating
expenses.
●
Net Income – Net income was $2,106,000, or $0.56 per diluted
share compared to $686,000, or $0.18 per diluted share, during
2019.
●
Operating Cash Flows
- Cash flows from operations were
$4,386,000 compared to $2,864,000 during 2019.
●
Non-GAAP Measures
– EBITDA was $4,122,000, or 22%
of revenue, compared to $2,141,000, or 13% of revenue, during 2019.
Non-GAAP net income was $3,016,000, or $0.80 per diluted share,
compared to $1,694,000, or $0.44 per diluted share, during
2019.
Key Performance Indicators:
●
During
the quarter, the Company worked with 1,498 publicly traded
customers, compared to 1,501, essentially flat from the same period
last year.
●
During
the quarter, the Company worked with 1,728 privately held customers
compared to 1,092, up 58% from the same period last
year.
●
During the quarter, we signed 32 new
Platform id.
subscriptions to new or existing
customers with a total annual contract value of $241,000. During
the full fiscal year of 2020, we signed 139 new Platform
id.
subscriptions to new or existing
customers with a total annual contract value of
$1,007,000.
●
Total Platform id.
subscriptions as of December 31, 2020
were 341, with an annual contract value of $2,677,000, compared to
320 subscriptions with an annual contract value of $2,477,000 as of
September 30, 2020, and 255 subscriptions with an annual contract
value of $2,033,000 as of December 31, 2019.
Non-GAAP Information
Certain Non-GAAP financial measures are included in this press
release. In the calculation of these measures, the Company excludes
certain items, such as amortization of intangible assets,
stock-based compensation, other non-recurring items, the impact of
discrete items impacting income tax expense and tax impact of
adjustments. The Company believes that excluding such items
provides investors and management with a representation of the
Company's core operating performance and with information useful in
assessing its prospects for the future and underlying trends in the
Company's operating expenditures and continuing operations.
Management uses such Non-GAAP measures to evaluate financial
results and manage operations. The release and the attachments to
this release provide a reconciliation of each of the Non-GAAP
measures referred to in this release to the most directly
comparable GAAP measure. The Non-GAAP financial measures are not
meant to be considered a substitute for the corresponding GAAP
financial statements and investors should evaluate them carefully.
These Non-GAAP financial measures may differ materially from the
Non-GAAP financial measures used by other companies.
CALCULATION OF EBITDA
($ in ‘000’s)
|
Three Months
ended December 31,
|
|
|
2020
|
2019
|
|
Amount
|
Amount
|
|
|
|
Net
income:
|
$319
|
$69
|
Adjustments:
|
|
|
Depreciation and
amortization
|
296
|
406
|
Interest expense
(income)
|
(1)
|
(56)
|
Income tax
expense
|
131
|
4
|
EBITDA:
|
$745
|
$423
|
|
Year ended
December 31,
|
|
|
2020
|
2019
|
|
Amount
|
Amount
|
|
|
|
Net
income:
|
$2,106
|
$686
|
Adjustments:
|
|
|
Depreciation and
amortization
|
1,348
|
1,667
|
Interest expense
(income)
|
(56)
|
(321)
|
Income tax
expense
|
724
|
109
|
EBITDA:
|
$4,122
|
$2,141
|
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP
MEASURES
($ in ‘000’s, except per share amounts)
|
Three Months
ended December 31,
|
|||
|
2020
|
2019
|
||
|
Amount
|
Per diluted
share
|
Amount
|
Per diluted
share
|
|
|
|
|
|
Net
income:
|
$319
|
$0.20
|
$69
|
$0.02
|
Adjustments:
|
|
|
|
|
Amortization of
intangible assets (1)
|
117
|
0.04
|
144
|
0.04
|
Stock-based
compensation (2)
|
72
|
0.02
|
127
|
0.03
|
Other non-recurring
items(3)
|
270
|
0.07
|
|
|
Tax impact of
adjustments (4)
|
(96)
|
(0.01)
|
(57)
|
(0.01)
|
Impact of discrete
items impacting income tax expense (5)
|
—
|
—
|
(22)
|
(0.01)
|
Non-GAAP net
income:
|
$682
|
$0.32
|
$261
|
$0.07
|
|
Year ended
December 31,
|
|||
|
2020
|
2019
|
||
|
Amount
|
Per diluted
share
|
Amount
|
Per diluted
share
|
|
|
|
|
|
Net
income:
|
$2,106
|
$0.56
|
$686
|
$0.18
|
Adjustments:
|
|
|
|
|
Amortization of
intangible assets (1)
|
609
|
0.16
|
718
|
0.19
|
Stock-based
compensation (2)
|
273
|
0.07
|
523
|
0.13
|
Other non-recurring
items (3)
|
270
|
0.07
|
112
|
0.03
|
Tax impact of
adjustments (4)
|
(242)
|
(0.06)
|
(284)
|
(0.07)
|
Impact of discrete
items impacting income tax expense (5)
|
—
|
—
|
(61)
|
(0.02)
|
Non-GAAP net
income:
|
$3,016
|
$0.80
|
$1,694
|
$0.44
|
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
relate to a one-time accrual related to sales and use tax
compliance of $350,000, partially offset by a gain on
extinguishment of debt of $80,000 recorded during the three months
and year ended December 31, 2020.
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 December 31, 2019, the discrete items relate to the
excess stock-based compensation benefit recognized in income tax
expense during the periods as well as any return to provision
adjustments impacting income tax expense.
Conference Call Information
To participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call.
Date:
March
4, 2021
Time:
4:30
PM ET
Participant:
877-407-8133
| 201-689-8040|
Live Webcast:
https://www.webcaster4.com/Webcast/Page/842/40047
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
March 4, 2022.
Toll-free:
877.481.4010
International:
919.882.2331
Reference ID:
40047
Web replay:
http://www.issuerdirect.com/earnings-calls-and-scripts/
About Issuer Direct Corporation
Issuer Direct®
is an
industry-leading communications 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 COVID-19
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 September 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
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2020 AND 2019
(in
thousands, except share and per share amounts)
|
December
31,
|
|
|
2020
|
2019
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$19,556
|
$15,766
|
Accounts receivable
(net of allowance for doubtful accounts of $657 and $700,
respectively)
|
2,514
|
2,051
|
Income tax
receivable
|
—
|
48
|
Other current
assets
|
298
|
141
|
Total current
assets
|
22,368
|
18,006
|
Capitalized
software (net of accumulated amortization of $2,761 and $2,153,
respectively)
|
526
|
1,134
|
Fixed assets (net
of accumulated depreciation of $312 and $181,
respectively)
|
795
|
899
|
Right-of-use asset
– leases
|
1,830
|
2,127
|
Deferred tax
asset
|
—
|
256
|
Other long-term
assets
|
88
|
77
|
Goodwill
|
6,376
|
6,376
|
Intangible assets
(net of accumulated amortization of $5,546 and $4,937,
respectively)
|
2,906
|
3,515
|
Total
assets
|
$34,889
|
$32,390
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$304
|
$266
|
Accrued
expenses
|
1,805
|
1,151
|
Note payable
– short-term (net of discount of $0 and $19,
respectively)
|
—
|
301
|
Income taxes
payable
|
258
|
310
|
Deferred
revenue
|
2,212
|
1,812
|
Total current
liabilities
|
4,579
|
3,840
|
Deferred income tax
liability
|
197
|
141
|
Lease liabilities
– long-term
|
1,971
|
2,309
|
Total
liabilities
|
6,747
|
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 December 31, 2020 and 2019,
respectively.
|
—
|
—
|
Common stock $0.001
par value, 20,000,000 shares authorized, 3,770,752 and 3,786,398
shares issued and outstanding as of December 31, 2020 and 2019,
respectively.
|
4
|
4
|
Additional paid-in
capital
|
22,214
|
22,275
|
Other accumulated
comprehensive loss
|
(19)
|
(16)
|
Retained
earnings
|
5,943
|
3,837
|
Total stockholders'
equity
|
28,142
|
26,100
|
Total
liabilities and stockholders’ equity
|
$34,889
|
$32,390
|
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in
thousands, except per share amounts)
|
For the three
months ended
|
For the year
ended
|
||
|
December
31,
2020
|
December
31,
2019
|
December
31,
2020
|
December
31,
2019
|
|
(unaudited)
|
(unaudited)
|
|
|
Revenues
|
$4,744
|
$3,959
|
$18,526
|
$16,295
|
Cost of
revenue
|
1,413
|
1,306
|
5,415
|
5,080
|
Gross
profit
|
3,331
|
2,653
|
13,111
|
11,215
|
Operating costs and
expenses:
|
|
|
|
|
General and
administrative
|
1,564
|
1,174
|
5,029
|
5,086
|
Sales and
marketing
|
993
|
985
|
3,812
|
3,551
|
Product
development
|
254
|
251
|
825
|
1,219
|
Depreciation and
amortization
|
151
|
226
|
751
|
885
|
Total operating
costs and expenses
|
2,962
|
2,636
|
10,417
|
10,741
|
Operating
income
|
369
|
17
|
2,694
|
474
|
Other
income
|
|
|
|
|
Gain on
extinguishment of debt
|
80
|
|
80
|
—
|
Interest income,
net
|
1
|
56
|
56
|
321
|
Net income before
income taxes
|
450
|
73
|
2,830
|
795
|
Income tax
expense
|
131
|
4
|
724
|
109
|
Net
income
|
$319
|
$69
|
$2,106
|
$686
|
Income per share
– basic
|
$0.08
|
$0.02
|
$0.56
|
$0.18
|
Income per share -
diluted
|
$0.08
|
$0.02
|
$0.56
|
$0.18
|
Weighted average
number of common shares outstanding - basic
|
3,756
|
3,796
|
3,755
|
3,839
|
Weighted average
number of common shares outstanding - diluted
|
3,803
|
3,827
|
3,784
|
3,861
|
ISSUER DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands, except share and per share amounts)
|
Years Ended
December 31,
|
|
|
2020
|
2019
|
Cash
flows from operating activities
|
|
|
Net
income
|
$2,106
|
$686
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Bad debt
expense
|
304
|
753
|
Depreciation and
amortization
|
1,348
|
1,667
|
Deferred income
taxes
|
312
|
(528)
|
Non-cash interest
expense
|
19
|
25
|
Stock-based
compensation expense
|
273
|
523
|
Gain on
extinguishment of debt
|
(80)
|
—
|
Changes in
operating assets and liabilities:
|
|
|
Decrease (increase)
in accounts receivable
|
(761)
|
(1,210)
|
Decrease (increase)
in other assets
|
177
|
362
|
Increase (decrease)
in accounts payable
|
37
|
(117)
|
Increase (decrease)
in deferred revenue
|
391
|
559
|
Increase (decrease)
in accrued expenses and other liabilities
|
260
|
144
|
Net cash provided
by operating activities
|
4,386
|
2,864
|
|
|
|
Cash
flows from investing activities
|
|
|
Purchase of fixed
assets
|
(27)
|
(420)
|
Purchase of
acquired businesses, net of cash received
|
—
|
(2,788)
|
Capitalized
software
|
—
|
(20)
|
Net cash used in
investing activities
|
(27)
|
(3,228)
|
|
|
|
Cash
flows from financing activities
|
|
|
Payment for stock
repurchase and retirement
|
(785)
|
(773)
|
Payment on notes
payable
|
(240)
|
(320)
|
Proceeds from
exercise of stock options, net of income taxes
|
451
|
—
|
Net cash used in
financing activities
|
(574)
|
(1,093)
|
|
|
|
Net change in
cash
|
3,785
|
(1,457)
|
Cash-
beginning
|
15,766
|
17,222
|
Currency
translation adjustment
|
5
|
1
|
Cash-
ending
|
$19,556
|
$15,766
|
|
|
|
Supplemental disclosures:
|
|
|
Cash paid for
income taxes
|
$458
|
$340
|
Non-cash
activities:
|
|
|
Right-of-use assets
obtained in exchange for lease liabilities
|
$—
|
$2,856
|
SOURCE: Issuer Direct
Corporation