/EINPresswire.com/ -- REGINA, SASKATCHEWAN -- (Marketwired) -- 08/09/16 -- Information Services Corporation (TSX: ISV) ("ISC" or the "Company") today reported on the Company's financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Highlights

--  Revenue of $24.7 million compared to $20.1 million in Q2 2015. The
    increase was largely driven by ESC, acquired on October 1, 2015, which
    is included in our Services segment;

--  EBITDA (earnings before interest, taxes, depreciation and amortization)
    of $10.3 million compared to $8.3 million in Q2 2015;

--  EBITDA margin of 41.7 per cent compared to 41.1 per cent in Q2 2015; and

--  Net income of $6.6 million or $0.38 per basic share, $0.37 per diluted
    share compared to $5.0 million or $0.28 per basic and diluted share in
    Q2 2015.

Subseqent Events Highlight

--  In July, ISC launched its new system for the Corporate Registry,
    providing a more convenient service to search, register and maintain
    corporate entities in Saskatchewan.

Financial Position as at June 30, 2016

--  Cash of $35.2 million

--  Free cash flow of $6.3 million

--  Total debt of $23.8 million

Commenting on the Company's results, Jeff Stusek, President and CEO stated, "This quarter marks our third year of reporting as a publicly traded company and our eleventh consecutive quarter of reported profitability. This consistency is a testament to the strength and stability of our business." Stusek continued, "As expected, our Services segment has diversified our business and has made a meaningful contribution to our consolidated revenue. Our predictability and stability as a company has been consistent and we will continue to focus on maintaining this while pursuing new opportunities."

Management's Discussion of ISC's Summary of Second Quarter 2016 Financial Results

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                                      Three      Three        Six        Six
                                     Months     Months     Months     Months
(thousands of CAD dollars;            Ended      Ended      Ended      Ended
except earnings per share and      June 30,   June 30,   June 30,   June 30,
where noted)                           2016       2015       2016       2015
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Revenue - Registries
  Land Registry                     $15,371    $15,300    $26,867    $27,002
  Personal Property Registry          2,778      2,696      5,005      4,805
  Corporate Registry                  2,378      2,050      4,968      4,249
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Total                                20,527     20,046     36,840     36,056
Revenue - Services                    3,618          -      6,895          -
Revenue - Other                         529          7        545          9
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TOTAL Revenue                       $24,674    $20,053    $44,280    $36,065
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Expenses                            $16,468    $13,112    $32,827    $26,682
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EBITDA(1)                            10,282      8,248     15,359     12,011
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EBITDA margin(1) (% of revenue)       41.7%      41.1%      34.7%      33.3%
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Adjusted EBITDA(1)                  $11,134     $8,411    $16,605    $12,191
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Adjusted EBITDA margin(1)             45.1%      41.9%      37.5%      33.8%
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Net income and total
 comprehensive income                $6,578     $4,973     $8,774     $6,693
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Earnings per share (basic)(2)         $0.38      $0.28      $0.50      $0.38
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Earnings per share, (diluted)(2)      $0.37      $0.28      $0.49      $0.38
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Free cash flow(1)                    $6,297     $6,643     $9,613     $8,697
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1.  EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free
    cash flow are not recognized as measures under IFRS and do not have a
    standardized meaning prescribed by IFRS and therefore, are not
    comparable to similar measures by other corporations. See section name
    "Non-IFRS Measures" in the Management's Discussion & Analysis for the
    three and six months ended June 30, 2016.
2.  The calculation of earnings per share is based on net income after tax
    and the weighted average number of shares outstanding during the period.

Second Quarter 2016 Results of Operations

--  Revenue was $24.7 million for the three months ended June 30, 2016, a
    $4.6 million increase compared to the same period in 2015. The increase
    was largely driven by ESC, acquired on October 1, 2015, which is
    included in our Services segment.

--  Revenue for all registries was $20.5 million for the three months ended
    June 30, 2016; an increase of $0.5 million or 2.4 per cent, compared to
    the three months ended June 30, 2015. Our results were higher mainly due
    to increased revenues from the Corporate Registry and the Personal
    Property Registry.

    --  Land Registry revenue was $15.4 million for the three months ended
        June 30, 2016, an increase of $0.1 million or 0.5 per cent, compared
        to the three months ended June 30, 2015.

    --  Revenue for the Personal Property Registry for the three months
        ended June 30, 2016 was $2.8 million, which represents a rise of 3.0
        per cent from the same period in 2015.

    --  Revenue for the Corporate Registry for the three months ended June
        30, 2016 was $2.4 million, an advance of $0.3 million or 16.0 per
        cent, compared to the second quarter 2015.

--  The revenue in our Services segment for the second quarter, which
    consists of revenue earned by our wholly owned subsidiary ESC, was $3.6
    million. This is an increase of $0.3 million or 10.4 per cent, compared
    to the first quarter of 2016.

--  For the three months ended June 30, 2016, consolidated expenses
    (including ESC) were $16.5 million, an increase of $3.4 million,
    compared to $13.1 million for the same period of 2015.

--  Depreciation and amortization costs were $1.8 million for the three
    months ended June 30, 2016, compared to $1.3 million in the same period
    of 2015. The increase was mainly due to the additional depreciation from
    capital assets of ESC.

--  Capital expenditures for the three months ended June 30, 2016, were $3.4
    million, compared to $0.3 million for the same period in 2015. Capital
    expenditures were focused on the renewal and enhancement of technology
    supporting the Corporate Registry, various sustaining initiatives around
    general office improvements and the acquisition of the subcontractor
    interest described in "9.1 Cash flow - Net Cash Flow Used in Investing
    Activities" in the Management's Discussion & Analysis for the three
    months ended June 30, 2016.

--  As at June 30, 2016, the Company held $35.2 million in cash compared to
    $36.6 million as at December 31, 2015, a decrease of $1.4 million.

--  The Company had $22.3 million of long-term debt as at June 30, 2016. For
    more details, see section named "9.3 Long-term debt" in the Management's
    Discussion & Analysis for the three months ended June 30, 2016.

Outlook

The majority of the Company's revenue is linked to registry transaction volumes and values which are driven by economic conditions in Saskatchewan. The remaining portion of our revenue is linked to the overall economic conditions in Ontario and Quebec. At present, the Company continues to expect the 2016 Saskatchewan economy to be comparable to 2015, while moderate growth is anticipated for the central Canadian markets. As a result, ISC reiterates that its expected consolidated EBITDA margin for fiscal 2016 will be in the range of 32.0 to 34.0 per cent.

For the Registries segment, we expect more of the same from the Saskatchewan economy. According to several external forecasts, Saskatchewan's real Gross Domestic Product growth is expected to be close to zero for 2016. As such, the Company currently expects that the last half of 2016 will follow the trend observed in the first half of the year.

Overall, we anticipate transaction volumes in the Land Titles Registry for 2016 to be near 2015 levels, with high-value property registrations returning to normalized levels. For the Personal Property Registry, we forecast an increase overall, with revenues from search volumes offsetting anticipated declines from lower new motor vehicle sales in Saskatchewan and reduced property security registration setups. For the Corporate Registry, we expect steady growth of active business entities and related search volume will contribute to stabilized revenue.

Pricing for the Registries segment is outlined in the MSA and related Registry Operating Agreements which specify the maximum fees allowed to be charged to the public for particular Core Registry Services. Consistent with 2014 and 2015, during the second quarter, we completed pricing adjustments to our Core Registry Services, which became effective in July 2016, based on the Saskatchewan Consumer Price Index. To improve customer satisfaction, we applied adjustments differently than in years past, resulting in whole number pricing that was easier to understand and apply for our customers. As a result, some fees increased while others decreased, with the overall revenue increase remaining consistent with the previous per-fee formula.

In our Services segment, we expect the growth of ESC's core business to continue in specific categories relating to the financial services and legal sectors in both its core markets of Ontario and Quebec. The expectation is that the growing base of new customers, as well as new mandates from existing customers, will continue to support overall revenue growth. We expect a continued focus on cost efficiencies to improve margins.

The key drivers of expenses will continue to be wages, salaries and information technology costs. The Company will continue to manage its costs prudently while balancing re-investment in the business in order to maintain or improve the customer experience.

Management expects capital expenditures in 2016 to be in the range of $5.0 million to $6.0 million, funded from operating cash flow. These expenditures are projected to include the completion of the renewal and enhancement of our Corporate Registry technology, enhancement and upgrades to core technology components and enterprise systems, additions to intangible assets and general office improvements.

Note to Readers

This news release provides a general summary of Information Services Corporation's results for the first quarters ended June 30, 2016 and 2015. 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 at http://isc.mwnewsroom.com/Financial-Reports-Filings/Financial-Reports. 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 August 10, 2016 to discuss these results. Dial-in numbers for the conference call are:

1-866-225-6564 or 1-416-406-6419.

A live audio cast of the conference call is available at the following link: http://isc.mwnewsroom.com/Events

The webcast will be available for replay after the event at http://isc.mwnewsroom.com/Events.

About ISC

ISC is an experienced provider of registry and information services for government, individuals and private sector business. As the exclusive provider of the land titles, surveys, personal property and corporate registries for Saskatchewan, the Company maintains and operates these registries, 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 management's expectations and certain assumptions with respect to the registry services and products, its competitive landscape, economic conditions in Canada and in particular, Saskatchewan, Ontario and Quebec, real estate market in Saskatchewan, economic impact of energy and resource sectors, transaction volumes, statements regarding the future financial position or results of ISC, customer growth and diversification, dividend expectations, creation of shareholder value, growth opportunities, development and completion of projects, impact of cost management efforts, capital and operating expectations, real gross domestic product, changes in high-value property registrations, changes in motor vehicle sales volume, steady growth of active business entities, consolidated EBITDA margin, income taxes, our ability to attract and retain skilled staff, the compensation and benefits that will be paid or provided to employees and our level of customer service, as well as goodwill and intangibles are material factors in preparing forward-looking statements. In addition, the words "may", "will", "would", "should", "could", "expect", "plan", "intend", "trend", "indicate", "anticipate", "believe", "estimate", "predict", "project", "targets", "strive", "strategy", "continue", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases are intended to identify forward-looking statements. 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 15, 2016, ISC's Consolidated Financial Statements and Notes and Management's Discussion and Analysis for the quarter ended June 30, 2016 as well as other documents filed by ISC with Canadian securities regulators through SEDAR at 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.

Contacts:
Jonathan Hackshaw
Director, Investor Relations & Corporate Communications
Information Services Corporation
306-798-2136
investor.relations@isc.ca

Pamela Keck
Manager, Investor Relations
Toll Free: 1-855-341-8363 in North America or 1-306-798-1137
investor.relations@isc.ca

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