Core Insights - The article emphasizes the importance of the Zacks Rank system, which focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a favored strategy that seeks to find undervalued companies through fundamental analysis and traditional valuation metrics [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the Value category, where stocks with "A" grades and high Zacks Ranks are considered strong value stocks [3] Company Analysis: Issuer Direct (ISDR) - Issuer Direct (ISDR) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [4] - The stock's current P/E ratio is 15.11, significantly lower than the industry average of 22.61, suggesting it may be undervalued [4] - ISDR's Forward P/E has fluctuated between 8.52 and 16.76 over the past year, with a median of 12.19 [4] - The P/CF ratio for ISDR is 17.40, which is also below the industry's average of 20.42, further indicating potential undervaluation [5] - Over the past 52 weeks, ISDR's P/CF has ranged from 7.73 to 20.09, with a median of 14.31 [5] - The combination of these metrics suggests that ISDR is likely undervalued and stands out as one of the market's strongest value stocks, especially considering its earnings outlook [6]

Company Overview - Issuer Direct (ISDR) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4][7] - The stock is trading with a P/E ratio of 12.40, significantly lower than the industry average P/E of 24.67, suggesting it may be undervalued [4] Valuation Metrics - ISDR has a P/B ratio of 0.97, which is favorable compared to the industry's average P/B of 1.08, indicating a solid market value relative to its book value [5] - The stock's P/CF ratio stands at 14.09, which is also lower than the industry's average P/CF of 22.16, further supporting the notion of undervaluation based on cash flow [6] Performance Insights - Over the past year, ISDR's Forward P/E has fluctuated between 8.52 and 16.76, with a median of 12.19, reflecting its stable earnings outlook [4] - The P/B ratio has ranged from 0.83 to 2.32, with a median of 1.61, while the P/CF ratio has varied from 7.73 to 20.57, with a median of 14.34, indicating consistent performance metrics [5][6]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $7.7 million, a decrease of $2 million or 20% compared to Q2 2023, and $14.6 million for the first half of 2024, also down $3.6 million or 20% year-over-year [7][8] - Net income for Q2 2024 was $7,000, compared to $1.4 million or $0.36 per diluted share in Q2 2023, while the first half of 2024 reported a net loss of $132,000 or $0.03 per diluted share compared to net income of $1.2 million or $0.32 per diluted share in the prior year [12][13] - Gross margin for Q2 2024 was $5.9 million, a decrease of $1.4 million or 19% year-over-year, with gross margin percentages remaining consistent at 77% [10][11] Business Line Data and Key Metrics Changes - Communications revenue represented 77% of total revenue in Q2 2024, up from 62% in Q2 2023, while compliance revenue decreased by $2 million or 53% in Q2 2024 compared to the same period last year [9] - The communications business was flat year-over-year for Q2 2024, but decreased by $1.1 million or 9% for the first half of 2024 compared to the same period in 2023 [8][9] - Customer accounts increased by 19% year-over-year, reaching 12,388, with average subscription revenue per customer growing by 18% year-over-year [7][15] Market Data and Key Metrics Changes - The company experienced a rebound in ACCESSWIRE volumes, with revenue increasing 17% over the first quarter of 2024 [8] - The overall market for news distribution is currently experiencing a slowdown, attributed to constrained capital markets affecting public companies and reduced budgets from private companies [42][43] Company Strategy and Development Direction - The company is in the process of pivoting to a subscription-first business model, with plans to sell its compliance business to focus on its communications platform [18][19] - A new customer experience team has been established to enhance onboarding and support for the subscription model, aiming for cost containment and operational efficiency [17] - The management team is focused on achieving debt-free status nearly two years earlier than planned, with a goal to enhance shareholder value through improved operational metrics [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in news distribution volumes and the potential for market share gains, despite current industry challenges [31][44] - The company anticipates that the slowdown in the PR industry is temporary and expects a return to growth as capital markets stabilize [42][43] - Future growth is expected to be driven by the new subscription model and the introduction of additional product offerings [49] Other Important Information - The company reported negative cash flow from operations of $190,000 for Q2 2024, but generated positive cash flow of $796,000 for the first half of 2024 [14] - The deferred revenue balance increased by 1% to $5.5 million as of June 30, 2024, indicating future revenue recognition [14] Q&A Session Summary Question: Is the company considering buying back shares given the low stock price? - Management indicated that while they are focused on generating cash and servicing debt, they would consider a share repurchase program if cash generation exceeds expectations [24][26] Question: What is driving the recent bounce back in volumes? - The increase in volumes is attributed to market share gains, new sales leadership, and strong inbound activity from large accounts [30][31] Question: What is the status of the compliance business sale? - The company has not yet begun the sale process but plans to canvas the market and expects to complete a transaction by the end of the year [34][35] Question: Can you provide an update on the AI content generation tool, AImee? - AImee is currently in production with about 20% of customers using it actively, and the company plans to enhance its capabilities to drive subscription revenue [38][39] Question: What factors are contributing to the slowdown in the PR industry? - The slowdown is linked to constrained capital markets and reduced budgets from private companies, but management believes this is a temporary situation [42][43]

Group 1 - Issuer Direct Corporation (ISDR) reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, but down from $0.53 per share a year ago, indicating an earnings surprise of 4.76% [1] - The company posted revenues of $7.69 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.88%, but down from $9.65 million year-over-year [2] - Issuer Direct shares have declined approximately 51.5% since the beginning of the year, contrasting with the S&P 500's gain of 9% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $7.14 million, and for the current fiscal year, it is $0.73 on revenues of $29.51 million [7] - The Commercial Printing industry, to which Issuer Direct belongs, is currently ranked in the top 43% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Issuer Direct Corporation (ISDR) came out with quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -72.41%. A quarter ago, it was expected that this company would post earnings of $0.26 per share when it actually produced earnings of $0.15, delivering a surprise of -42.31%.Over the last four quarters, ...

PART I – FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Issuer Direct Corporation, including the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows for the periods ended March 31, 2024 and 2023, along with detailed notes on accounting policies and agreements [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in thousands) | Item | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------------------------------------------------------------------------------ | :------------- | :---------------- | | Cash and cash equivalents | $5,399 | $5,714 | | Total current assets | $11,099 | $11,504 | | Total assets | $64,371 | $65,152 | | Total current liabilities | $13,215 | $12,650 | | Total liabilities | $29,191 | $29,732 | | Total stockholders' equity | $35,180 | $35,420 | - Total assets decreased by **$781 thousand** from December 31, 2023, to March 31, 2024[14](index=14&type=chunk) - Total liabilities decreased by **$541 thousand**, while total stockholders' equity decreased by **$240 thousand**[16](index=16&type=chunk) [Unaudited Consolidated Statements of Operations](index=3&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (in thousands, except per share amounts) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $6,962 | $8,619 | | Gross profit | $5,241 | $6,790 | | Operating (loss) income | $(52) | $581 | | Net loss | $(139) | $(144) | | Loss per share – basic | $(0.04) | $(0.04) | | Loss per share – fully diluted | $(0.04) | $(0.04) | - Revenues decreased by **19%** from **$8.6 million** in Q1 2023 to **$7.0 million** in Q1 2024[19](index=19&type=chunk) - The company reported an operating loss of **$52 thousand** in Q1 2024, a significant decline from an operating income of **$581 thousand** in Q1 2023[19](index=19&type=chunk) - Net loss remained relatively stable at **$(139) thousand** in Q1 2024 compared to **$(144) thousand** in Q1 2023, resulting in a consistent basic and diluted loss per share of **$(0.04)**[19](index=19&type=chunk)[20](index=20&type=chunk) [Unaudited Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Consolidated Statements of Comprehensive Loss (in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(139) | $(144) | | Foreign currency translation adjustment | $(34) | $1 | | Comprehensive loss | $(173) | $(143) | - Comprehensive loss increased to **$(173) thousand** in Q1 2024 from **$(143) thousand** in Q1 2023, primarily due to a negative foreign currency translation adjustment of **$(34) thousand** in 2024[22](index=22&type=chunk) [Unaudited Consolidated Statement of Stockholders' Equity](index=5&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Stockholders'%20Equity) Changes in Stockholders' Equity (in thousands) | Item | Balance at Dec 31, 2023 (in thousands) | Stock-based Compensation Expense (in thousands) | Exercise of Stock Awards, net of tax (in thousands) | Foreign Currency Translation (in thousands) | Net Loss (in thousands) | Balance at Mar 31, 2024 (in thousands) | | :-------------------------- | :---------------------- | :------------------------------- | :--------------------------------- | :--------------------------- | :------- | :---------------------- | | Common Stock | $4 | $0 | $0 | $0 | $0 | $4 | | Additional Paid-in Capital | $23,531 | $(67) | $0 | $0 | $0 | $23,464 | | Other Accumulated Comprehensive Loss | $(49) | $0 | $0 | $(34) | $0 | $(83) | | Retained Earnings | $11,934 | $0 | $0 | $0 | $(139) | $11,795 | | Total Stockholders' Equity | $35,420 | $(67) | $0 | $(34) | $(139) | $35,180 | - Total stockholders' equity decreased from **$35.4 million** at December 31, 2023, to **$35.2 million** at March 31, 2024, primarily due to net loss and foreign currency translation adjustments[24](index=24&type=chunk) - Stock-based compensation expense resulted in a **$(67) thousand** decrease in additional paid-in capital during Q1 2024[24](index=24&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $986 | $272 | | Net cash (used in) provided by investing activities | $(261) | $345 | | Net cash used in financing activities | $(1,000) | $(2,100) | | Net change in cash and cash equivalents | $(275) | $(1,483) | | Cash and cash equivalents – ending | $5,399 | $3,349 | - Net cash provided by operating activities significantly increased to **$986 thousand** in Q1 2024 from **$272 thousand** in Q1 2023[25](index=25&type=chunk) - Net cash used in investing activities was **$(261) thousand** in Q1 2024, compared to net cash provided of **$345 thousand** in Q1 2023, primarily due to capitalized software investments[25](index=25&type=chunk) - Net cash used in financing activities decreased to **$(1.0) million** in Q1 2024 from **$(2.1) million** in Q1 2023, mainly due to lower long-term debt payments[25](index=25&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=5&type=section&id=Note%201.%20Basis%20of%20Presentation) - The unaudited interim consolidated financial statements are prepared in accordance with Form 10-Q instructions and Article 10 of Regulation S-X, including all normal recurring adjustments necessary for fair presentation[27](index=27&type=chunk) - Interim results are not indicative of the entire year, and certain US GAAP disclosures have been condensed or omitted[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=5&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - The Company's revenue primarily comes from subscriptions to cloud-based products and Communications and Compliance services, with revenue recognized over the contract period for subscriptions and upon completion for per-release/event services[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The Company adopted ASC Topic 326 for credit losses, using an expected losses model, which did not have a material financial impact[40](index=40&type=chunk) Allowance for Credit Losses (in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Beginning balance | $1,119 | $745 | | Provision for credit losses | $282 | $151 | | Write-offs | $(257) | $(38) | | Ending balance | $1,144 | $858 | - Costs incurred to develop cloud-based platform products are capitalized when the preliminary project phase is complete and amortized over an estimated useful life of typically four years[48](index=48&type=chunk) - Operating lease agreements for office space are recognized as ROU assets and lease liabilities, measured at the present value of lease payments using the incremental borrowing rate[50](index=50&type=chunk)[51](index=51&type=chunk) [Note 3: Equity](index=9&type=section&id=Note%203%3A%20Equity) - No dividends were paid during the three-month periods ended March 31, 2024 and 2023[60](index=60&type=chunk) - The 2023 Equity Incentive Plan authorizes the issuance of up to **300,000 shares** for incentive awards, with **349,244 shares** remaining to be granted as of March 31, 2024 (including shares assumed from the 2014 Plan)[64](index=64&type=chunk) Stock Options Outstanding and Exercisable at March 31, 2024 | Exercise Price Range | Number Outstanding | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Number Exercisable | | :------------------- | :----------------- | :------------------------------------------ | :------------------------------ | :----------------- | | $0.01 - 8.00 | 5,000 | 1.64 | $6.80 | 5,000 | | $8.01 - 11.00 | 3,000 | 3.75 | $10.25 | 3,000 | | $11.01 - 16.00 | 18,000 | 4.28 | $13.12 | 18,000 | | $16.01 - 27.00 | 53,000 | 7.80 | $25.26 | 30,500 | | $27.01 - 27.71 | 12,750 | 7.80 | $27.71 | 0 | | **Total** | **91,750** | **6.64** | **$21.72** | **56,500** | - Unrecognized stock compensation related to options was **$331 thousand** as of March 31, 2024, to be recognized through 2027[65](index=65&type=chunk) - **26,500 restricted stock units** were granted in Q1 2024 (average fair value **$14.86**/share), compared to **60,500** in Q1 2023 (average fair value **$27.82**/share). Unrecognized compensation cost for RSUs was **$1.3 million** as of March 31, 2024[66](index=66&type=chunk) [Note 4: Income Taxes](index=10&type=section&id=Note%204%3A%20Income%20Taxes) - Income tax expense was **$16 thousand** for Q1 2024, compared to a benefit of **$48 thousand** for Q1 2023[67](index=67&type=chunk) - The variance from the U.S. statutory rate of **21%** is primarily due to state income tax and, for Q1 2024, additional expense from vesting of stock-based compensation[67](index=67&type=chunk) [Note 5: Leases](index=10&type=section&id=Note%205%3A%20Leases) - Lease liabilities totaled **$1.3 million** as of March 31, 2024, with a current portion of **$379 thousand**[69](index=69&type=chunk) Lease Expense (in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------- | :-------------------------------- | :-------------------------------- | | Operating lease expense | $76 | $76 | | Variable lease expense | $14 | $6 | | **Total Rent expense** | **$90** | **$82** | - The weighted-average remaining non-cancelable lease term was **3.75 years**, and the weighted-average discount rate was **3.77%** as of March 31, 2024[70](index=70&type=chunk) [Note 6: Revenue](index=11&type=section&id=Note%206%3A%20Revenue) Revenue Disaggregated by Stream (in thousands) | Revenue Streams | 2024 Amount (in thousands) | 2024 % of Total | 2023 Amount (in thousands) | 2023 % of Total | | :-------------- | :---------- | :-------------- | :---------- | :-------------- | | Communications | $5,459 | 78.4% | $6,566 | 76.2% | | Compliance | $1,503 | 21.6% | $2,053 | 23.8% | | **Total** | **$6,962** | **100.0%** | **$8,619** | **100.0%** | - Total revenue decreased by **19%** year-over-year. Communications revenue decreased by **17%**, while Compliance revenue decreased by **27%**[71](index=71&type=chunk) [Note 7: Credit Agreement](index=11&type=section&id=Note%207%3A%20Credit%20Agreement) - On March 20, 2023, the Company entered into a **$25 million credit agreement** with Pinnacle Bank, comprising a **$20 million Term Loan** and a **$5 million Revolving Line of Credit**[73](index=73&type=chunk) - The Term Loan has a fixed interest rate of **6.217%** due to an interest rate swap agreement[74](index=74&type=chunk) - Monthly principal payments of **$333 thousand** plus interest began on January 1, 2024, with maturity on December 20, 2028[75](index=75&type=chunk) - Proceeds from the Term Loan were used to repay the **$22.9 million Seller Note** from the iNewswire acquisition, with the Seller forgiving **$440 thousand** of interest[76](index=76&type=chunk)[77](index=77&type=chunk) - The Credit Agreement includes financial covenants: a fixed charge coverage ratio of no less than **1.20:1.00** and a leverage ratio not exceeding **2.50:1.00** for fiscal quarters ending after December 31, 2023[78](index=78&type=chunk) [Note 8: Interest Rate Swap](index=12&type=section&id=Note%208%3A%20Interest%20Rate%20Swap) - The Company uses a **$20 million notional interest rate swap** to convert variable interest rate exposure (SOFR + **2.35%**) to a fixed rate of **6.217%**[82](index=82&type=chunk) - The swap does not qualify for hedge accounting. Its fair value was a net asset of **$184 thousand** as of March 31, 2024, compared to a net liability of **$21 thousand** at December 31, 2023[83](index=83&type=chunk) - A gain of **$205 thousand** was recognized in Other income (expense) in Q1 2024 from the interest rate swap, compared to a loss of **$165 thousand** in Q1 2023[83](index=83&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=13&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) This section provides management's perspective on the Company's financial performance and condition for the three months ended March 31, 2024, compared to the same period in 2023, covering business overview, revenue analysis, operating results, liquidity, capital resources, outlook, and non-GAAP financial measure reconciliations [Overview](index=13&type=section&id=Overview) - Issuer Direct Corporation is a leading communications and compliance company offering solutions for public relations and investor relations professionals[87](index=87&type=chunk) - The Company's platform addresses customer needs for distributing messaging to key constituents, investors, markets, and regulatory systems globally[87](index=87&type=chunk) - Revenue is disclosed in two main categories: Communications and Compliance, with an expectation for the Communications portion to continue increasing[88](index=88&type=chunk)[89](index=89&type=chunk) [Communications](index=14&type=section&id=Communications) - The Communications platform includes ACCESSWIRE and Newswire for press release distribution, webcasting and events, professional conference software, and investor relations website technology[92](index=92&type=chunk) - ACCESSWIRE focuses on news dissemination and media outreach, offering self-editing or editorial staff services, expanding distribution, and enhancing analytics[93](index=93&type=chunk) - Newswire, acquired in November 2022, operates independently for private companies, with its distribution fully integrated into ACCESSWIRE[94](index=94&type=chunk) - Media Suite, a subscription add-on, offers Media Database, Media Pitching (with AI engine AIMee), and Media Monitoring solutions[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The Webcasting Platform provides cloud-based live and on-demand streaming for various events, expanding beyond historical earnings-based events[105](index=105&type=chunk) [Compliance](index=16&type=section&id=Compliance) - Compliance offerings include disclosure software for financial reporting, stock transfer services, whistleblower hotline, and related annual meeting, print, and shareholder distribution services[111](index=111&type=chunk) - The disclosure reporting module assists companies and professionals with document conversion, editing, and filing to the SEC's EDGAR system[112](index=112&type=chunk) - The whistleblower hotline, a supported product of NYSE offerings, provides secure notifications and incident workflow management[113](index=113&type=chunk) - The stock transfer module offers real-time information on shareholders, stock ledgers, and reports, and enables new share issuance from a cloud-based system[114](index=114&type=chunk) - The proxy module is an integrated, real-time voting platform for annual or special meetings, incorporating shareholder and guest registration, voting, and real-time statistics[115](index=115&type=chunk)[116](index=116&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Key Financial Results (in thousands, except percentages) | Item | Q1 2024 Amount (in thousands) | Q1 2024 % of Revenue | Q1 2023 Amount (in thousands) | Q1 2023 % of Revenue | YoY Change (Amount, in thousands) | YoY Change (%) | | :-------------------------------- | :------------- | :------------------- | :------------- | :------------------- | :------------------ | :------------- | | Total revenue | $6,962 | 100% | $8,619 | 100% | $(1,657) | -19% | | Communications revenue | $5,459 | 78% | $6,566 | 76% | $(1,107) | -17% | | Compliance revenue | $1,503 | 22% | $2,053 | 24% | $(550) | -27% | | Total cost of revenue | $1,721 | 25% | $1,829 | 21% | $(108) | -6% | | Total gross margin | $5,241 | 75% | $6,790 | 79% | $(1,549) | -23% | | General and administrative expenses | $1,819 | 26% | $2,332 | 27% | $(513) | -22% | | Sales and marketing expenses | $2,096 | 30% | $2,381 | 28% | $(285) | -12% | | Product development expenses | $654 | 9% | $774 | 9% | $(120) | -16% | | Depreciation and amortization | $724 | 10% | $722 | 8% | $2 | 0% | | Total operating costs and expenses | $5,293 | 76% | $6,209 | 72% | $(916) | -15% | | Operating (loss) income | $(52) | (1)% | $581 | 7% | $(633) | -109% | | Interest expense, net | $(276) | (4)% | $(238) | (3)% | $(38) | 16% | | Other income (expense) | $205 | 3% | $(535) | (6)% | $740 | -138% | | Net (loss) income | $(139) | (2)% | $(144) | (2)% | $5 | -3% | - The decrease in Communications revenue was due to lower volume in the Newswire business, decreased pricing mix from ACCESSWIRE, and the absence of a large conference present in Q1 2023[120](index=120&type=chunk) - Compliance revenue decreased primarily due to fewer and smaller print and proxy fulfillment transactions and a decrease in transfer agent services[121](index=121&type=chunk) - General and administrative expenses decreased by **$513 thousand**, or **22%**, primarily due to a benefit to stock compensation expense from an executive officer's resignation and lower one-time transaction costs[126](index=126&type=chunk) - Product development expenses decreased by **$120 thousand**, or **16%**, mainly due to the capitalization of **$245 thousand** for the Media Suite product and ACCESSWIRE enhancements in Q1 2024 (no capitalization in Q1 2023)[130](index=130&type=chunk) - Other income (expense) shifted from a **$(535) thousand expense** in Q1 2023 to a **$205 thousand income** in Q1 2024, driven by the change in fair value of the interest rate swap and the absence of the Seller Note extinguishment payment[133](index=133&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Position (in thousands) | Item | March 31, 2024 (in thousands) | | :-------------------------- | :------------- | | Cash and cash equivalents | $5,399 | | Net accounts receivable | $4,201 | | Total current liabilities | $13,215 | | Current liabilities exceeding current assets | $2,116 | - The Company's current liabilities exceeded current assets by **$2.1 million** as of March 31, 2024[135](index=135&type=chunk) - The **$25 million credit agreement** with Pinnacle Bank includes a **$20 million Term Loan** and a **$5 million Revolving Line of Credit**, with the Term Loan having a fixed interest rate of **6.217%** via an interest rate swap[136](index=136&type=chunk)[137](index=137&type=chunk) - Monthly principal payments on the Term Loan began January 1, 2024, and the Revolving LOC had no outstanding balance as of March 31, 2024[138](index=138&type=chunk)[140](index=140&type=chunk) - The Credit Agreement contains financial covenants, including a fixed charge coverage ratio of no less than **1.20:1.00** and a leverage ratio not exceeding **2.50:1.00** for fiscal quarters ending after December 31, 2023[140](index=140&type=chunk) [Disclosure about Off-Balance Sheet Arrangements](index=20&type=section&id=Disclosure%20about%20Off-Balance%20Sheet%20Arrangements) - The Company does not have any transactions, agreements, or contractual arrangements that constitute off-balance sheet arrangements[144](index=144&type=chunk) [Non-GAAP Measures](index=20&type=section&id=Non-GAAP%20Measures) - Management uses non-GAAP measures like free cash flow, adjusted free cash flow, adjusted EBITDA, and adjusted net income to assess financial performance and compare operating results[145](index=145&type=chunk) Free Cash Flow and Adjusted Free Cash Flow (Non-GAAP, in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities (US GAAP) | $986 | $272 | | Payments for purchase of fixed assets and capitalized software | $(261) | $(5) | | **Free cash flow (Non-GAAP)** | **$725** | **$267** | | Cash paid for acquisition and integration related items | $23 | $77 | | Cash paid for other unusual items | $35 | $395 | | **Adjusted free cash flow (Non-GAAP)** | **$783** | **$739** | Reconciliation of Net Loss to Adjusted EBITDA (Non-GAAP, in thousands) | Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(139) | $(144) | | Depreciation and amortization | $770 | $736 | | Interest expense, net | $276 | $238 | | Income tax expense (benefit) | $16 | $(48) | | **EBITDA** | **$923** | **$782** | | Acquisition and/or integration costs | $65 | $234 | | Other non-recurring expenses | $(170) | $535 | | Stock-based compensation expense | $(67) | $337 | | **Adjusted EBITDA** | **$751** | **$1,888** | Reconciliation of Net Loss to Non-GAAP Net Income (in thousands, except per share amounts) | Item | Q1 2024 Amount (in thousands) | Q1 2024 Per Diluted Share | Q1 2023 Amount (in thousands) | Q1 2023 Per Diluted Share | | :------------------------------------ | :------------- | :------------------------ | :------------- | :------------------------ | | Net loss | $(139) | $(0.04) | $(144) | $(0.04) | | Amortization of intangible assets | $685 | $0.18 | $685 | $0.18 | | Stock-based compensation expense | $(67) | $(0.01) | $337 | $0.09 | | Other unusual items | $(105) | $(0.03) | $769 | $0.20 | | Discrete items impacting income tax expense | $55 | $0.01 | $0 | $0 | | Tax impact of adjustments | $(108) | $(0.03) | $(376) | $(0.10) | | **Non-GAAP net income** | **$321** | **$0.08** | **$1,271** | **$0.33** | [Outlook](index=22&type=section&id=Outlook) - Despite global economic uncertainties, the Company believes demand for its platforms and services remains stable in most markets[154](index=154&type=chunk) - The Company's strategic initiatives for 2024 include continued investment in product sets, platforms, and intellectual property development via internal efforts and acquisitions[156](index=156&type=chunk) - Key strategic focus areas include expanding Communications products, evaluating strategic acquisitions, growing sales and marketing teams, expanding customer base and newswire distribution, investing in technology, and generating profitable, sustainable growth and cash flows[156](index=156&type=chunk)[164](index=164&type=chunk) - There is a potential risk of goodwill and/or intangible asset write-downs, particularly related to the Newswire acquisition, if the stock price declines or demand for the combined newswire business does not stabilize or increase[155](index=155&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=23&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - The Company has no applicable quantitative and qualitative disclosures about market risk[158](index=158&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES.](index=23&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) This section details the evaluation of the Company's disclosure controls and procedures, confirming their effectiveness as of March 31, 2024, and notes a change in the Chief Financial Officer position - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2024[159](index=159&type=chunk) - Timothy Pitoniak resigned as Chief Financial Officer on March 8, 2024, and Steven Knerr was appointed Interim Chief Financial Officer[159](index=159&type=chunk) PART II – OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS.](index=23&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) This section states that the Company is not currently a party to any material litigation nor is it aware of any threatened or pending litigation that would have a material adverse effect on its business - The Company is not a party to, nor aware of, any material legal proceedings or threatened litigation[160](index=160&type=chunk) [ITEM 1A. RISK FACTORS.](index=24&type=section&id=ITEM%201A.%20RISK%20FACTORS.) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's most recent Form 10-K filing - No material changes to risk factors have occurred since the most recent Form 10-K filing[161](index=161&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=24&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds[162](index=162&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES.](index=24&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[163](index=163&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURE.](index=24&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURE.) This section indicates that mine safety disclosure is not applicable to the Company - Mine safety disclosure is not applicable to the Company[165](index=165&type=chunk) [ITEM 5. OTHER INFORMATION.](index=24&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) This section states that there is no other information to report - No other information is reported in this section[166](index=166&type=chunk) [ITEM 6. EXHIBITS.](index=24&type=section&id=ITEM%206.%20EXHIBITS.) This section lists the exhibits filed with the Form 10-Q, including certifications required by the Sarbanes-Oxley Act and XBRL taxonomy documents Exhibits Filed | Exhibit Number | Description | | :------------- | :------------------------------------------------------------------- | | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101.INS | XBRL Instance Document | | 101.SCH | XBRL Taxonomy Extension Schema Document | | 101.CAL | XBRL Taxonomy Calculation Linkbase Document | | 101.LAB | XBRL Taxonomy Label Linkbase Document | | 101.PRE | XBRL Taxonomy Presentation Linkbase Document | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | [SIGNATURES](index=24&type=section&id=SIGNATURES) This section contains the signatures of the Chief Executive Officer and Interim Chief Financial Officer, certifying the filing of the report - The report was signed by Brian R. Balbirnie, Chief Executive Officer, and Steven Knerr, Interim Chief Financial Officer, on May 9, 2024[171](index=171&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202024%20Highlights) Issuer Direct experienced a 19% revenue decline in Q1 2024 due to reduced press release volume, yet improved cash flow from operations and increased subscriptions, with management anticipating future growth from its new Media Suite - The CEO noted that the first quarter was slower than anticipated due to a reduction in press release volume from existing news distribution customers, a trend observed across the industry[2](index=2&type=chunk) - The company is optimistic about its new Media Suite subscription, believing it will attract more news distribution customers and boost overall subscription numbers[2](index=2&type=chunk) Key Performance Indicators (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $7.0M | $8.6M | -19% | | Adjusted EBITDA | $0.8M | $1.9M | -58% | | Cash flow from operations | $1.0M | $0.3M | +233% | | Subscriptions | 1,043 | 1,001 | +4% | [Detailed Financial Performance](index=1&type=section&id=Detailed%20Financial%20Performance) Q1 2024 total revenue decreased 19% to $7.0 million, driven by declines in both Communications and Compliance segments, resulting in an operating loss of $52,000 and a flat net loss per share of ($0.04) Revenue Breakdown (Q1 2024) | Revenue Stream | Change vs Q1 2023 | Change vs Q4 2023 | Notes | | :--- | :--- | :--- | :--- | | **Total Revenue** | **-19%** | **-8%** | Totaled $6,962,000 | | Communications | -17% | -3% | Decrease in volume and pricing on Newswire and ACCESSWIRE | | Compliance | -27% | -21% | Decrease in print/proxy fulfillment and transfer agent services | - Gross margin for Q1 2024 was **75% of revenue**, down from 79% in Q1 2023[6](index=6&type=chunk) - The company recorded an operating loss of **$52,000**, compared to an operating income of $581,000 in Q1 2023, primarily due to lower revenue, partially offset by reduced operating expenses[6](index=6&type=chunk) - GAAP net loss was **$139,000**, or **($0.04) per diluted share**, compared to a net loss of $144,000, or ($0.04) per diluted share, in Q1 2023[6](index=6&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company presents non-GAAP financial measures, including Adjusted EBITDA of **$751,000**, Non-GAAP net income of **$321,000**, and Adjusted free cash flow of **$783,000**, to reflect core operating performance by excluding specific non-recurring items - The company includes non-GAAP measures to provide investors with a representation of core operating performance and to assess future prospects and underlying trends[7](index=7&type=chunk) Non-GAAP Measures Summary (Q1 2024 vs Q1 2023) | Non-GAAP Measure | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | EBITDA | $923,000 | $782,000 | | Adjusted EBITDA | $751,000 | $1,888,000 | | Non-GAAP Net Income | $321,000 | $1,271,000 | | Non-GAAP EPS (diluted) | $0.08 | $0.33 | | Adjusted Free Cash Flow | $783,000 | $739,000 | [EBITDA & Adjusted EBITDA Reconciliation](index=2&type=section&id=CALCULATION%20OF%20EBITDA%20%26%20ADJUSTED%20EBITDA) Q1 2024 GAAP Net Loss of **$139,000** was reconciled to an EBITDA of **$923,000**, with further adjustments leading to an Adjusted EBITDA of **$751,000**, a significant decrease from the prior year Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net income (loss)** | **$(139)** | **$(144)** | | Depreciation and amortization | 770 | 736 | | Interest expense (income) | 276 | 238 | | Income tax expense (benefit) | 16 | (48) | | **EBITDA** | **923** | **782** | | Acquisition and integration expenses | 65 | 234 | | Other non-recurring expenses | (170) | 535 | | Stock-based compensation expense | (67) | 337 | | **Adjusted EBITDA** | **$751** | **$1,888** | [Non-GAAP Net Income Reconciliation](index=2&type=section&id=CALCULATION%20OF%20NON-GAAP%20NET%20INCOME) Q1 2024 GAAP Net Loss of **$139,000** was adjusted for items like amortization and stock-based compensation, resulting in a Non-GAAP Net Income of **$321,000**, or **$0.08 per diluted share**, a decrease from the prior year Reconciliation of GAAP Net Loss to Non-GAAP Net Income (in thousands, except per share) | Line Item | Q1 2024 Amount | Q1 2024 Per Share | Q1 2023 Amount | Q1 2023 Per Share | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss)** | **$(139)** | **$(0.04)** | **$(144)** | **$(0.04)** | | Amortization of intangible assets | 685 | 0.18 | 685 | 0.18 | | Stock-based compensation | (67) | (0.01) | 337 | 0.09 | | Other unusual items | (105) | (0.03) | 769 | 0.20 | | Tax impact of adjustments | (108) | (0.03) | (376) | (0.10) | | Impact of discrete items | 55 | 0.01 | - | - | | **Non-GAAP net income** | **$321** | **$0.08** | **$1,271** | **$0.33** | [Free Cash Flow & Adjusted Free Cash Flow Reconciliation](index=3&type=section&id=CALCULATION%20OF%20FREE%20CASH%20FLOW%20AND%20ADJUSTED%20FREE%20CASH%20FLOW) In Q1 2024, net cash from operating activities significantly increased to **$986,000**, with **$261,000** used in investing and **$1.0 million** in financing activities, ending the quarter with **$5.4 million** in cash Calculation of Adjusted Free Cash Flow (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $986 | $272 | | Payments for fixed assets and capitalized software | (261) | (5) | | **Free cash flow** | **725** | **267** | | Cash paid for acquisition and integration items | 23 | 77 | | Cash paid for other unusual items | 35 | 395 | | **Adjusted free cash flow** | **$783** | **$739** | [Customer Metrics](index=2&type=section&id=Customer%20Metrics) The company's customer base expanded over the last twelve months, with total active customers growing to **12,093** and subscription customers increasing to **1,043**, partly driven by the Newswire acquisition - As of March 31, 2024, the company had **12,093 active customers** over the past twelve months, an increase from 10,052 as of March 31, 2023[10](index=10&type=chunk) - The number of active customers from the Newswire brand more than **doubled year-over-year**, increasing from 2,262 to 4,605[10](index=10&type=chunk) - The company had **1,043 active subscription customers** during the quarter, up from 1,001 in Q1 2023, with a subscription defined as a contract for one or more products for a minimum of one year[10](index=10&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2024, including Balance Sheets, Statements of Operations, and Statements of Cash Flows, providing a comprehensive overview of the company's financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2024, Issuer Direct reported total assets of **$64.4 million**, total liabilities of **$29.2 million**, and total stockholders' equity of **$35.2 million**, with cash and cash equivalents at **$5.4 million** Balance Sheet Summary (in thousands) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,399 | $5,714 | | Total current assets | $11,099 | $11,504 | | Goodwill | $21,927 | $21,927 | | **Total assets** | **$64,371** | **$65,152** | | Total current liabilities | $13,215 | $12,650 | | Long-term debt | $14,917 | $15,913 | | **Total liabilities** | **$29,191** | **$29,732** | | **Total stockholders' equity** | **$35,180** | **$35,420** | [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2024, the company reported **$7.0 million** in revenue, a gross profit of **$5.2 million**, an operating loss of **$52,000**, and a net loss of **$139,000**, resulting in a flat loss per share of **($0.04)** Statement of Operations Summary (in thousands, except per share) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $6,962 | $8,619 | | Gross profit | $5,241 | $6,790 | | Total operating costs and expenses | $5,293 | $6,209 | | **Operating (loss) income** | **$(52)** | **$581** | | **Net loss** | **$(139)** | **$(144)** | | **Loss per share – fully diluted** | **$(0.04)** | **$(0.04)** | [Consolidated Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2024, net cash from operating activities significantly increased to **$986,000**, with **$261,000** used in investing and **$1.0 million** in financing activities, ending the quarter with **$5.4 million** in cash Statement of Cash Flows Summary (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $986 | $272 | | Net cash (used in) provided by investing activities | $(261) | $345 | | Net cash used in financing activities | $(1,000) | $(2,100) | | **Net change in cash and cash equivalents** | **$(275)** | **$(1,483)** | | **Cash and cash equivalents – ending** | **$5,399** | **$3,349** | [Company Information & Forward-Looking Statements](index=4&type=section&id=Company%20Information%20%26%20Forward-Looking%20Statements) Issuer Direct, a communications and compliance company, provides solutions for PR and IR professionals, with its report containing forward-looking statements subject to risks and uncertainties, which the company is not obligated to update - Issuer Direct® is a leading communications and compliance company offering solutions like newswires, IR websites, and events technology to thousands of customers[18](index=18&type=chunk) - The report contains forward-looking statements based on current expectations, which are subject to risks and uncertainties that could cause actual results to differ materially[19](index=19&type=chunk)

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ FORM 10-K _____________________ ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Year Ended: December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___________to ___________ ISSUER DIRECT CORPORATION (Name of small business issuer in its charter) _____________________ (State or Other Jurisdic ...

"During the fourth quarter we continued our trend of achieving increases in key financial metrics on a year-over-year basis. Specifically, revenues, gross margins and Adjusted EBITDA were all up over the same quarter of the prior year, momentum we believe will continue through this year and beyond. Additionally, I am encouraged by the progress and investments we made at the end of the year in product innovation, which allowed us to release our Media Suite solution on schedule. We believe Media Suite will be ...