Issuer Direct (ISDR) - 2024 Q1 - Quarterly Results

Financial & Operational Highlights 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] - The company is optimistic about its new Media Suite subscription, believing it will attract more news distribution customers and boost overall subscription numbers[2] 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 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] - 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] - 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] Non-GAAP Financial Measures & Reconciliations 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] 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 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 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 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 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] - The number of active customers from the Newswire brand more than doubled year-over-year, increasing from 2,262 to 4,605[10] - 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] Consolidated Financial Statements 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 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 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 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 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] - 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]