|By PR Newswire||
|March 19, 2014 06:12 PM EDT||
REGINA, March 19, 2014 /CNW/ - Information Services Corporation (TSX: ISV) ("ISC" or "the Company") today reports on the Company's financial results for the fourth quarter and year ended December 31, 2013.
Highlights of ISC's financial results:
Fourth Quarter 2013
Total revenues were $20.0 million for the three months ended December
31, 2013, an increase of $1.7 million or 9.6 per cent, compared to the
$18.3 million for the three months ended December 31, 2012. Revenues
increased across all three registries in the fourth quarter compared to
the same quarter last year. Revenues exclude the Vital Statistics
Registry which is treated as a discontinued operation;
EBITDA (earnings before interest, taxes, depreciation and amortization)
for the fourth quarter of 2013 was $8.3 million compared to $6.7
million for the fourth quarter of 2012, up 25.1 per cent quarter over
quarter. ISC's 2013 fourth quarter EBITDA margin was 41.6 per cent
(35.3 per cent in 2012);
Adjusted EBITDA grew to $8.4 million for the quarter as compared to $7.0
million for the same quarter last year, with an Adjusted EBITDA margin
of 41.9 per cent (38.1 per cent in 2012); and
- Net income for the three months ended December 31, 2013 was $4.7 million or $0.27 per share. In the fourth quarter 2012, net income was $5.0 million, however for comparative purposes, it is important to note that ISC was not subject to tax in 2012. Excluding this quarter's tax expense and recovery, ISC generated an increase in income over the fourth quarter 2012 of $2.1 million, or 41.7 per cent.
Total revenues increased to $79.1 million for the year ended December
31, 2013, an increase of $3.9 million, or 5.2 per cent, compared to
$75.2 million for the year ended December 31, 2012. Revenues exclude
the Vital Statistics Registry which is treated as a discontinued
EBITDA for 2013 was $30.6 million, slightly ahead of the $28.8 million
for 2012, with an EBITDA margin of 38.1 per cent (37.2 per cent in
Adjusted EBITDA rose to $34.0 million, a 12.7 per cent increase compared
to the $30.2 million generated in 2012, with an Adjusted EBITDA margin
of 43.0 per cent (40.1 per cent in 2012); and
- Net income for the year ended December 31, 2013 was $77.0 million or $4.40 per share. In 2012 net income for was $21.2 million, however it is important to note that ISC was not subject to tax in 2012. Excluding the income tax expense and recovery, ISC generated an increase in income over 2012 of $3.9 million or 18.3 per cent.
Commenting on the Company's annual results, Jeff Stusek, President and CEO stated, "2013 was an important year for ISC. The Company underwent significant changes as an organization, but, most importantly, we continued to serve our customers without interruption. It is in this context that I would like to recognize the contributions of the entire team at ISC, who made our change appear seamless while ensuring the delivery of a solid financial performance."
"With privatization now behind us, our focus is to ensure that we continue to provide the same high levels of satisfaction to all our customers and maintain a strong balance sheet, while judiciously exploring opportunities to create added value for our existing and potential customers as well as value for shareholders."
Management's Discussion of ISC's Summary Quarterly and Annual Financial Results
(Thousands of CAD dollars,
except earnings per share and where
Three months ended
Land Registry, Land
Survey and Geomatics
|EBITDA Margin2 (% of Revenues)||41.6%||35.3%||38.1%||37.2%|
|Adjusted EBITDA Margin2||41.9%||38.1%||43.0%||40.1%|
Net Income and total
|Earnings per share3||$0.41||-||$4.40||-|
|Free cash flow2||-||-||$23,208||$22,561|
Operating, general and
Revenues do not include the Vital Statistics Registry.
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 year ended December 31,
- The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the period.
Revenues from the Land Registry (which includes the Land Titles
Registry, Land Surveys Directory ("Land Surveys") and Geomatics)
remained strong in 2013 due to the increases in average prices of
existing homes, offsetting a decrease in volumes. Land transfer and
mortgage registration volumes for the year were down, due in part to
stricter mortgage rules implemented in 2012. The Company also
processed more high-value property registrations in 2013 than in 2012,
which generate a high fee per transaction.
Revenue from the Personal Property Registry ("PPR") for the year ended
December 31, 2013 was up 7.8 per cent from the year ended December 31,
2012. The main driver of revenue for this registry, personal property
security registrations set-ups, has increased 5.3 per cent in volume
and 8.0 per cent in revenue. Strong employment growth, a high rate of
net migration, increased retail sales and most importantly growth in in
new motor vehicle sales in Saskatchewan all positively affected PPR
Revenue from the Corporate Registry for the year ended December 31, 2013
remained flat when compared to the same period in 2012. As expected,
The New West Partnership Trade Agreement had an impact on revenues
year-over-year. However, third and fourth quarter volumes and revenues
showed positive growth with annual returns revenue up by 12.5 per cent
for the second half of 2013.
Operating, general and administrative expenses for the year ended
December 31, 2013 increased by $2.7 million, or 6.2 per cent compared
to the year ended December 31, 2012. The increase was due to
inflationary increases in wages and salaries, information technology
services costs, and additional new expenses related to ISC becoming a
Adjusted EBITDA for the year ended December 31, 2013 increased by $3.8
million, or 12.7 per cent over the same period in 2012. The increase is
a result of revenues increasing at a rate of 5.2 per cent, which is
greater than the increase of $2.7 million in operating, general and
administrative expenses over 2012.
Depreciation and amortization decreased $2.1 million, or 27.9 per cent,
to $5.5 million for the year ended December 31, 2013 over the same
period last year. The significant decrease was due to certain
intangible assets reaching a fully depreciated state, combined with
less capitalized projects being recorded.
ISC's tax status was initially reported to have changed upon its listing
on the TSX on July 9, 2013. However, subsequent review revealed that
the actual loss of ISC's tax exempt status was deemed to occur on June
27, 2013 when ISC and CIC entered into an Underwriting Agreement with a
syndicate of underwriters. As a result, the income tax recovery
recorded in the third quarter should have been recorded in the second
quarter. The quarterly results shown in Management's Discussion &
Analysis for the year ended December 31, 2013 have been adjusted to
reflect this change, and future reporting periods will be similarly
Capital expenditures for the year ended December 31, 2013 were $3.7
million compared to $7.7 million for the year ended December 31, 2012.
In 2013, capital expenditures were significantly lower both on an
absolute basis and as a percentage of our revenues as the Company
deferred a number of projects to focus efforts on the privatization and
subsequent initial public offering ("IPO"). Maintenance capital
expenditures were $2.4 million for the year ended December 31, 2013,
which included work completed on continued development efforts under
the New West Partnership, leasehold improvements to Customer Service
Centres, the beginning of a technology hardware refresh and planning
for the modernization of the Corporate Registry. Growth capital
expenditures were $1.3 million for the year ended December 31, 2013,
which included work completed on the renewal of the survey plan
processing system and a new services framework for Business
- ISC's cash position as at December 31, 2013 was $27.6 million compared to $21.1 million at the same time in 2012. As at December 31, 2013, the Company had $9.9 million of long-term debt and no short-term borrowings.
In 2014, ISC is focused on delivering stable returns through a focus on cost management while ensuring continuous compliance with the Master Service Agreement ("MSA") and publicly traded company requirements and investigating growth opportunities. ISC has demonstrated operational excellence for many years and it is an important objective to ensure this focus on strong operational and financial results continues.
As the majority of our revenues, including those related to the Land Titles Registry, Land Surveys, the PPR and the Corporate Registry, are tied to economic conditions, we use general forecast economic information to help predict our revenues. Key drivers of favorable macro-economic conditions in the province that support the growth of ISC revenue growth include the continuation of a low interest rate environment, which encourages new home purchases and resale transactions, strong consumption patterns and high levels of private capital investment.
In that regard, prevailing economic conditions in Saskatchewan are generally expected to continue in 2014 driving positive growth in gross domestic product ("GDP"). According to Bank of Montreal ("BMO") Capital Markets'1 most recent economic forecast for Saskatchewan, the provincial economy is expected to post real GDP growth of 2.4 per cent growth in 2014. Royal Bank of Canada ("RBC") Economics Research2 projection for 2014 is currently 2.1 per cent.
Business confidence in Saskatchewan remains at levels similar to the historical average over the past five years, around 68.4, according to The Canadian Federation of Independent Business ("CFIB")'s business barometer3 for the province. This level of optimism may encourage new businesses to form; however, this may be constrained by Saskatchewan's tight labour supply, which is cited as one of the greatest impediments to current sales and production growth.
Employment growth was up 3.5 per cent for the first eleven months, with 18,600 jobs being added. Weekly earnings rose 3.2 per cent in the first ten months of 2013 to $946.37. Manufacturing sales rose 6.4 percent to $12.8 billion in the first ten months of 2013. A record 38.4 million tonne crop was produced in 2013, resulting in exports of $27.2 billion from January to October.
1 BMO Capital Markets Economics - Provincial Economic Outlook - February 2014
2 RBC Economics Provincial Outlook - December 2013
3 CFIB Economics Business Barometer - Provincial Summary - December 2013
Despite these records, the economy has experienced some setbacks, which will likely dampen growth expectations somewhat in 2014. Crown land oil lease sales were down 40 per cent from the province's March estimates and may be an indication that activity in this sector will decline in 2014, which could result in slower growth across the province. Global commodities prices are declining and logistical challenges may make it more difficult to reach export markets, which could have a negative impact on different sectors of the Saskatchewan economy in 2014.
With respect to ISC's offerings, Canada Mortgage and Housing Corporation ("CMHC") Housing Market Outlook4 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 impacts our land registry revenues.
For ISC's PPR, patterns of retail trade and new vehicle sales provide a useful metric for expected revenues in the PPR. From January to November 2013, retail trade5 in Saskatchewan grew 3.3 per cent over the same period in 2012. New vehicle sales increased 5.3 per cent from January to November 2013 compared to the same period in 2012, while the value of vehicle sales grew 11.8 per cent over the same period.
To our flat fees, the MSA and related Registry Operating Agreements specify the maximum fees allowed to be charged to the public for particular Core Registry Services. The maximum fees are adjustable on a yearly basis and are based on a formula tied to inflation as measured by the Saskatchewan Consumer Price Index published by Statistics Canada6. These adjustment provisions do not apply to any value-based fees. There are no restrictions on the fees we may charge for non-core Ancillary Services that use registry data. ISC expects to generally adjust prices as outlined in the MSA.
The key drivers of our expenses will continue to be wages and salaries, information technology and project initiatives costs as we continue to focus on efficiency and effectiveness, leveraging investment in systems and processes while maintaining a high level of customer service. We expect our operating, general and administrative expenses to modestly increase based on inflation and in connection with becoming a publicly traded company and as we expand our business.
In 2013, EBITDA margins were unusually high as a result of our focus on the IPO and not on operational initiatives and project work. Adjusted EBITDA margins in 2014 should return to more normal levels of approximately 35 per cent. One of our objectives will be to grow margins by approximately 0.5 per cent per year over the next several years, primarily through operational efficiencies.
As a result of the above economic factors and potential fee adjustments, our revenues are expected to remain stable in 2014 and EBITDA margins are expected to return to the more normal level of 35 per cent.
4 CMHC Housing Market Outlook - Canadian Edition - First Quarter 2014
5 Statistics Canada (CANSIM Table 079-0003: New motor vehicle sales, Canada, provinces and territories), Statistics Canada, (CANSIM, table 080-0020: Retail trade, by province and territory (Monthly- Seasonally Adjusted)
6 Statistics Canada, CANSIM, table 326-0021 and Catalogue nos. 62-001-X and 62-010-X
Capital investment will be aligned to our strategic priorities and will focus on initiatives that:
- build or maintain corporate infrastructure;
- contribute to compliance obligations;
- produce process or technology improvement that increase revenues or reduce costs;
- grow the business; and/or
- generate an appropriate and acceptable return on investment.
Management expects its capital expenditures to be in the $8.0 to $10.0 million range in 2014. As demonstrated by our automation of the survey plan processing system, we remain committed to increasing the level of automation in our work flows and developing new technologies that lower overall costs.
Looking forward into 2014 our capital expenditures are expected to include ongoing renewals of systems and technology hardware. One of our more significant expenditures is expected to be the modernization of the Corporate Registry, and we now expect this initiative to extend beyond the end of 2014.
Note to Readers:
This news release provides a general summary of Information Services Corporation's results for the fourth quarters and years ended December 31, 2013 and 2012. 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/annual-reports All figures are in Canadian dollars unless otherwise noted.
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 March 20, 2014 to discuss these results. Dial-in numbers for the conference call are:
1-416-764-8609 or toll-free at 1-888-390-0605.
A live audiocast of the conference call is available at the following link: http://www.newswire.ca/en/webcast/detail/1316261/1453381
A replay of the call will be available 24 hours after the event until 11:59 p.m. EST on April 24, 2014, at http://isc.investorroom.com/events. To access the archived conference call, please dial 1-888-390-0541 and enter passcode 941465.
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 Consolidated Financial Statements and Notes and Management's Discussion and Analysis for the year-ended December 31, 2013 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.
SOURCE Information Services Corporation
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
Dec. 24, 2014 06:30 PM EST Reads: 1,859
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
Dec. 24, 2014 05:00 PM EST Reads: 1,266
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the ...
Dec. 24, 2014 04:00 PM EST Reads: 1,683
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, focused on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud platfo...
Dec. 24, 2014 04:00 PM EST Reads: 2,286
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to th...
Dec. 24, 2014 02:00 PM EST Reads: 2,568
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 24, 2014 02:00 PM EST Reads: 2,798
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
Dec. 24, 2014 01:45 PM EST Reads: 1,914
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Dec. 24, 2014 01:00 PM EST Reads: 1,889
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
Dec. 24, 2014 12:30 PM EST Reads: 1,888
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
Dec. 24, 2014 12:30 PM EST Reads: 1,736
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 24, 2014 12:00 PM EST Reads: 1,675
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
Dec. 24, 2014 12:00 PM EST Reads: 2,082
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Dec. 24, 2014 12:00 PM EST Reads: 2,033
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Dec. 24, 2014 11:45 AM EST Reads: 2,167
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
Dec. 24, 2014 11:45 AM EST Reads: 1,612