Record quarterly revenue and adjusted EBITDA Strong volumes in Registry Operations and Services 2024 guidance re-affirmed Continued execution towards 5-year goal to double revenue and adjusted EBITDA by 2028  REGINA, Saskatchewan, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Information Services Corporation (TSX:ISV) ("ISC" or the "Company") today reported on the Company's financial results for the second quarter ended June 30, 2024. Capitalized terms that are used but not defined in this news release have the meaning ascribed to those terms in Management's Discussion & Analysis for the three and six ended June 30, 2024. 2024 Second Quarter Highlights Revenue was a record $67.8 million for the quarter, an increase of 27 per cent compared to the second quarter of 2023. This was driven by Registry Operations' strong performance from the Saskatchewan Registries division, combined with the full effect of fee adjustments made in 2023 and record high-value property registrations in the Land Titles Registry. Further contributing to this growth was the Services segment with continued customer and transaction growth in the Regulatory Solutions division and increased assignments and sales in the Recovery Solutions division. Net income was $10.3 million or $0.57 per basic share and $0.56 per diluted share compared to $8.2 million or $0.47 per basic share and $0.46 per diluted share in the second quarter of 2023. Strong adjusted EBITDA growth in all operating segments drove the increase in the quarter. Net cash flow provided by operating activities was $24.1 million for the quarter, an increase of $9.8 million from $14.3 million in the second quarter of 2023. The increase was driven by increased contributions from the Registry Operations and Services segments. Adjusted net income was $14.1 million or $0.78 per basic share and $0.77 per diluted share compared to $9.3 million or $0.52 per basic share and $0.51 per diluted share in the second quarter of 2023. The growth in adjusted net income is for similar reasons as net income, which was offset by increased interest expense associated with additional borrowings that were used to fund the Upfront Payment. Adjusted EBITDA was a record $27.2 million for the quarter compared to $17.8 million in the second quarter of 2023. The increase was driven by Registry Operations' strong performance from the Saskatchewan Registries division, combined with the full effect of fee adjustments made in 2023 and record high-value property registrations in the Land Titles Registry. Further contributing to the growth was the Services segment with continued customer and transaction growth in the Regulatory Solutions division as well as increased assignments and sales in the Recovery Solutions division. Adjusted EBITDA margin was 40.0 per cent compared to 33.4 per cent in the second quarter of 2023 driven mainly by the pricing and volume increases in Registry Operations' Saskatchewan Registries division discussed above. Adjusted free cash flow for the quarter was $15.7 million, up 26 per cent compared to $12.5 million in the second quarter of 2023. This growth was driven by stronger adjusted EBITDA results across all our operating segments. This was partially offset by increased interest expense on the borrowings that were used to fund the Upfront Payment. Voluntary prepayments of $10.0 million were made towards ISC's Credit Facility during the quarter as part of the Company's plan to deleverage towards a long-term net leverage target of 2.0x – 2.5x. During the quarter, ISC announced that through its wholly owned subsidiary, Reamined Systems Inc. ("Reamined"), the Company and His Majesty the King in right of Ontario as represented by the Minister of Finance (the "Ministry") entered into an amended and restated License and Information Technology Services Agreement (the "A&R OPTA Agreement" or the "Agreement") to continue the management and operation of the Online Property Tax Analysis ("OPTA") system for the Government of Ontario until March 31, 2028 — with two additional options for one-year renewals. On May 23, 2024, ISC announced the appointment of Todd Antill as Vice-President, Registry Operations, reporting to Shawn Peters, President and CEO. Financial Position as at June 30, 2024 Cash of $22.1 million compared to $24.2 million as of December 31, 2023. Total debt of $163.4 million compared to $177.3 million as of December 31, 2023. Subsequent Events On July 2, 2024, the Company launched the online, self-service Customer Portal for the Bank Act Security Registry ("the BASR"). On July 31, 2024, the first of five annual cash payments of $30.0 million was made pursuant to the Extension Agreement to extend ISC's exclusive right to manage and operate the Saskatchewan Registries division in Registry Operations, using funds drawn from the Credit Facility. Commenting on ISC's results, Shawn Peters, President and CEO stated, "Record performances in the second quarter and first half of 2024 are in line with our expectations and support the execution of our five-year goal to double revenue and adjusted EBITDA by 2028. The year-over-year growth in our operating results reflects the resilience of the Saskatchewan economy and the strength of the registries, combined with the breadth of offerings in our Services business, where our Regulatory Solutions and Recovery Solutions divisions were both up." Peters continued, "We appreciate the confidence our customers and employees have in us, and we remain committed to executing our growth plan in the steady and predictable manner they have come to expect of ISC." Summary of 2024 Second Quarter Consolidated Financial Results (thousands of CAD; except earnings per share, adjusted earnings per shareand where noted) Three MonthsEnded June 30, 2024   Three Months Ended June 30, 2023   Revenue     Registry Operations $34,391   $24,796   Services 30,855   26,072   Technology Solutions 2,599   2,420   Corporate and other 3   7   Total Revenue $67,848   $53,295   Expenses $47,631   $40,965   Adjusted EBITDA1 $27,180   $17,824   Adjusted EBITDA margin1 40.0%   33.4%   Net income $10,319   $8,233   Adjusted net income1 $14,067   $9,256   Earnings per share (basic) $ 0.57   $0.47   Earnings per share (diluted) $ 0.56   $0.46   Adjusted earnings per share (basic)1 $ 0.78   $0.52   Adjusted earnings per share (diluted)1 $ 0.77   $0.51   Adjusted free cash flow1,2 $15,664   $12,468   ¹ Adjusted net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, adjusted EBITDA, adjusted EBITDA margin and adjusted free cash flow are not recognized as measures under IFRS and do not have a standardized meaning prescribed by IFRS and therefore, they may not be comparable to similar measures reported by other companies; refer to section 8.8 "Non-IFRS financial measures" in the MD&A. Refer to section 2 "Consolidated Financial Analysis" in the MD&A for a reconciliation of adjusted net income and adjusted EBITDA to net income. Refer to section 6.1 "Cash flow" in the MD&A for a reconciliation of adjusted free cash flow to net cash flow provided by operating activities. See also a description of these non-IFRS measures and reconciliations of adjusted net income and adjusted EBITDA to net income and adjusted free cash flow to net cash flow provided by operating activities presented in the section of this news release titled "Non-IFRS Performance Measures".² The adjusted free cash flow for the three and six month periods ending June 30, 2023, was restated due to a change in the definition of sustaining capital expenditures, which was made in the third quarter of 2023. This resulted in a restatement that increased adjusted free cash flow by $0.6 million for the three and six month periods ended June 30, 2023. 2024 Second Quarter Results of Operations Total revenue was $67.8 million, up 27 per cent compared to Q2 2023. Registry Operations segment revenue was $34.4 million, up compared to $24.8 million in Q2 2023: Land Registry revenue was $23.6 million, up compared to $14.7 million in Q2 2023. Personal Property Registry revenue was $3.5 million, up compared to the same prior year period. Corporate Registry revenue was $3.3 million, up compared to $2.7 million in Q2 2023. Property Tax Assessment Services revenue was $3.9 million, up compared to the same prior year period. Services segment revenue was $30.9 million, up compared to $26.1 million in Q2 2023: Regulatory Solutions revenue was $23.6 million, up compared to $20.1 million in Q2 2023. Recovery Solutions revenue was $3.8 million, up compared to $2.4 million in Q2 2023. Corporate Solutions revenue was $3.4 million, down compared to $3.6 million in Q2 2023. Technology Solutions revenue from third parties was $2.6 million, up from $2.4 million in Q2 2023. Consolidated expenses (all segments) were $47.6 million, up $6.7 million* compared to $41.0 million in Q2 2023. Net income was $10.3 million or $0.57 per basic share and $0.56 per diluted share, up $2.1 million compared to $8.2 million or $0.47 per basic share and $0.46 per diluted share for Q2 2023. *Values may not add due to rounding. OutlookThe following section includes forward-looking information, including statements related to our strategy, future results, including revenue and adjusted EBITDA, segment performance, expenses, operating costs and capital expenditures, the industries in which we operate, economic activity, growth opportunities, investments and business development opportunities. Refer to "Caution Regarding Forward-Looking Information" in Management's Discussion & Analysis for the three and six months ended June 30, 2024. The Bank of Canada has now lowered its key interest rate twice in 2024, and with a forecast of further cuts as inflation nears the Bank of Canada's long-term target, strong activity in the Saskatchewan real estate market is expected to continue in the near term, despite inventory challenges in lower-value homes. We continue to monitor interest rates and other economic conditions which can impact real estate activity, however, factors such as strong population growth and improved market confidence create an environment for heightened real estate activity, most notably benefitting the Saskatchewan Land Registry. In addition, the realization of a full year of fee adjustments, including those amended in July 2023 because of the Extension Agreement and regular annual CPI fee adjustments, will continue to support strong revenue in Registry Operations. Services ...