Information Services Corporation (TSX:ISV) (“ISC”, “we” or the
“Company”) today announced its outlook and annual guidance for
2022.
Highlights – Consolidated Annual
Guidance 20221
- Revenue is expected to be between
$168.0 million and $173.0 million
- Net income is expected to be
between $23.0 million and $27.0 million
- Earnings before interest, taxes,
depreciation and amortization (“EBITDA”)2 is expected to be between
$48.0 million and $53.0 million
Outlook
The Company expects to see continued strength in
2022 across its two largest operating segments, Registry Operations
and Services. Both have benefitted from strong economic conditions
in 2021, including an overall positive impact on transactions and
seasonality trends during the pandemic.
While the pandemic has disrupted various sectors
of the Saskatchewan economy, Registry Operations is expected to
deliver exceptional results in fiscal 2021, mainly due to the
robust real estate sector in Saskatchewan. While we do not expect
the strong economic activity experienced in 2021 will continue
indefinitely, we believe 2022 will still exceed pre-pandemic
levels. Saskatchewan’s economy and registry transactions are
expected to begin to return to more normalized levels midway
through 2022 and finish the year just below 2021 record levels.
Consequently, we expect that Registry Operations
will continue to be a robust contributor to our results in 2022,
due largely to the strong cash flow this business generates on a
consistent basis. Additional investments in 2022 related to people
and technology will be made within this segment to ensure continued
high levels of service as well as secure and efficient systems.
We expect Services to continue to deliver
organic growth in 2022, aided by continuous technology advancements
driving operational efficiency and new product innovation. We are
deliberate in growing our business with existing customers and
acquiring and onboarding new customers, particularly with our new
cloud-based Registry Complete software. A focus on investments in
people and technology to advance our growth will be important. This
will allow us to expand our offering to existing customers and
facilitate the acquisition of new customers throughout the year.
The recent announcement of the acquisition of UPLevel will also
support this expansion.
In Technology Solutions, we expect to see
continued progress and completion of solution delivery projects
where COVID-19 and other related delays have resulted in certain
milestones being deferred to 2022. Governments are expected to
continue directing measured efforts to managing COVID-19, but we
are seeing the re-commencement of early-stage procurement activity,
which could translate into additional projects commencing later in
2022. An investment in our sales and technology development teams
will be necessary to support these activities, as well as provide
support across the organization on our technology initiatives. We
have also begun the search to find an Irish-based leader for our
Dublin subsidiary to support and drive growth.
As economic trends potentially revert to
pre-COVID-19 levels, we expect our results to reflect those levels
more closely. However, our results from the last seven quarters
have demonstrated the resilience of our business to economic
adversity as well its ability to benefit from a strong economy. The
Company’s diversified range of services, pursuit of growth
opportunities, and strong core offerings position us well for
continued success in the years to come.
In keeping with our strategy, the Company will
actively explore appropriate acquisition targets in 2022 that
complement or add value to our existing lines of business or
provide new key service offerings that will also drive value.
Based on the above, we expect revenue for 2022
to be between $168.0 million and $173.0 million, net income to be
between $23.0 million and $27.0 million and EBITDA2 to be between
$48.0 million and $53.0 million.
Notes
1 Consolidated annual guidance for 2022
includes UPLevel which ISC acquired, through its wholly-owned
subsidiary, ESC Corporate Services Ltd., on February 14, 2022. No
other acquisitions are contemplated in the Company’s Annual
Guidance for 2022.2 EBITDA is not a recognized measure under
International Financial Reporting Standards (“IFRS”) and does not
have a standardized meaning prescribed by IFRS and, therefore, it
may not be comparable to similar measures reported by other
corporations. Please refer to section 8 for “Non-IFRS Financial
Measures” and “Financial Measures and Key Performance Indicators”
in Management’s Discussion and Analysis for the three and nine
months ended September 30, 2021. Additionally, see Non-GAAP
Performance Measures section noted below.
About ISC®
Headquartered in Canada, ISC is the leading
provider of registry and information management services for public
data and records. Throughout our history, we have delivered value
to our clients by providing solutions to manage, secure and
administer information through our Registry Operations, Services
and Technology Solutions segments. ISC is focused on sustaining its
core business while pursuing new growth opportunities. The Class A
Shares of ISC trade on the Toronto Stock Exchange under the symbol
ISV.
Cautionary Note Regarding
Forward-Looking Information
This news release includes forward-looking
information within the meaning of applicable Canadian securities
laws including, without limitation, expectations with respect to
future results, including revenue, net income and EBITDA, the
industries in which we operate, economic activity, growth
opportunities, investments, completion of projects, the impact of
COVID-19 and acquisitions. 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. Important
factors that could cause actual results to differ materially from
the Company's plans or expectations include risks relating to
changes in economic, market and business conditions, including
those arising from public health concerns, reliance on key
customers and licences, dependence on key projects and clients,
securing new business and fixed-price contracts, identification of
viable growth opportunities, implementation of our growth strategy,
competition and other risks detailed from time to time in the
filings made by the Company including those detailed in ISC's
Annual Information Form for the year ended December 31, 2020 and
ISC's Unaudited Condensed Consolidated Interim Financial Statements
and Notes and Management's Discussion and Analysis for the third
quarter ended September 30, 2021, copies of which are filed on
SEDAR at www.sedar.com.
The forward-looking information in this release
is made as of the date hereof and, except as required under
applicable securities laws, ISC assumes no obligation to update or
revise such information to reflect new events or circumstances.
Non-GAAP Performance
Measures
Included within this news release is reference
to the following non-GAAP performance measure. This measure is
reviewed regularly by management and the Board of Directors in
assessing our performance and making decisions regarding the
ongoing operations of our business and its ability to generate
returns. This measure may also be used by external parties in
decision making related to ISC’s performance. This is not a
recognized measure under GAAP and does not have a standardized
meaning under IFRS, so may not be reliable ways to compare us to
other companies.
Non-GAAP Performance Measure |
Why we use it |
How we calculate it |
Most comparable IFRS financial measure |
EBITDA |
- To evaluate performance and
profitability of segments and subsidiaries as well as conversion of
revenues.
- We believe that certain investors and
analysts use EBITDA to measure our ability to service debt and meet
other performance obligations.
- EBITDA is also used as a component of
determining short-term incentive compensation for employees.
|
EBITDA:Net income addDepreciation and
amortization, net finance expense, income tax expense |
Net income |
Investor & Media Contact
Jonathan Hackshaw Senior Director, Investor
Relations & Capital MarketsToll Free: 1-855-341-8363 in North
America or 1-306-798-1137investor.relations@isc.ca
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