ACCESS Newswire Inc.

Thank you for standing by, and welcome to the Issuer Direct Corporation First Quarter and 2022 Earnings Conference Call. Today's call will be conducted by the company's Founder and Chief Executive Officer, Brian Balburnie, and its Chief Financial Officer, Tim Petoniak. Before I turn the call over to Mr. Brian Balburnie, I'd I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships, and any other statement that may be construed as a prediction of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. Non-GAAP results will also be discussed on the call. The company believes that the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. With that said, Mr. Balbirnie?

Thank you, Operator, and good afternoon, everyone, and thank you for joining us today to discuss the company's first quarter 2022 results. Just a few minutes ago, we issued a press release announcing our results for the quarter, a copy of which is available in our newsroom for reference during today's call. I'm pleased with our first quarter results, which were up 6% year-over-year. We also drove margin improvements, which Tim will cover shortly, and increased our deferred revenues and bookings over the prior periods. AccessWire's double-digit growth continues, and compared to the market, we continue to outpace incremental growth compared to the big three news wires in Q1. During the call today, we will spend some time talking about our platform progress, total customers, and plans for the year, as well as some additional corporate initiatives. But before I turn the call over to Tim for his prepared remarks of the quarter, I want to provide an update on the company's recently announced repurchase plan. On March 5th of this year, the Board announced a $5 million repurchase program. Given the short periods between the announcement and the end of the quarter, we were only able to purchase 6,200 insurers of our common stock between $28 and $30 per share for a total proceeds of $182,000. As you would expect, we're in the market this month. and in fact have bought back another 9,000 shares for approximately $250,000 in April. We will continue to repurchase our common shares under the plan, subject to limitations of average daily volume. As I said in the past, we believe share repurchases are a good thing for good, profitable companies like us that generate cash and want to take advantage of share prices at or below certain levels. We remain confident in our business, our growth, and our cash flows generated from operations. Repurchasing is an ideal way to reward our shareholders And with that, I'll turn the call to Tim.

Thank you, Brian, and good afternoon, everyone. As Brian mentioned, 2022 is off to a good start, driven by both sides of the business. However, we are most encouraged by the continued growth in the Newswire business and subscription sales made during the quarter. The investment we are making in our sales and marketing team are paying off, and we intend to continue this while also increasing our investment in our products and technology. I will now highlight some of the results we achieved during the first quarter. Total revenue for the first quarter of 2022 was $5.3 million, an increase of $308,000, or 6%, compared to $5 million for the same period of 2021. Our communication business led the growth, increasing $196,000, or 6%, to $3.4 million, or 64% of total revenue. During Q1 of 2021, communication revenue also accounted for 64% of total revenue. The increase in revenue was driven by our AccessWire branded Newswire, which was partially offset by a decrease in revenue from our event and webcasting business. AccessWire revenue increased 16% over the first quarter of 2021 due to an increase in volume as we continue to benefit from our e-commerce platform and spend on digital marketing. Compliance revenue grew 6%, or $112,000 during the first quarter of 2022, compared to the same period of 2021. This increase was driven by revenue from our print and proxy fulfillment services due to an increase in projects, which was partially offset by a decrease in our transfer agent services due to less corporate actions and a decline in our legacy ARS business due to customer attrition. Switching over to gross margin, our overall gross margin increased 13% or $470,000 to $4.1 million. Gross margin percentage was 77% for the first quarter of 2022 compared to 72% for the same quarter last year. Gross margin from our communication business increased from 73% in Q1 of 2021 to 78% in Q1 of 2022 due to additional scale in our access wire business, as well as lower teleconferencing costs. Gross margin percentages from our compliance business improved from 71% to 75% for the quarter due to a decrease in amortization of our disclosure software, which was partially offset by additional costs attributed to our proxy fulfillment services business. Moving down to operating income. We posted operating income of $688,000 for the first quarter of 2022 compared to $707,000 during the first quarter of 2021. The decrease is primarily attributed to an increase in operating expenses due to our continued investment in our sales and marketing, product development, and corporate teams, and an increase in bad debt expense, which was partially offset by our previously discussed increase in gross margin. Sales and marketing costs increased 18% due to an increased headcount and costs associated with digital marketing. Product development costs increased 10% from Q1 of 2021 due to an increase in headcount with inside of the development team. General and admin costs increased 20% due to a one-time executive recruiting fee, an increase in stock hop expense, and an increase in bad debt expense. On a GAAP basis, we generated net income of $516,000 or 13 cents per diluted share during Q1 of 2022 compared to $545,000 or 14 cents per diluted share during Q1 of 2021. Looking at some non-GAAP metrics, we generated EBITDA of $850,000 for Q1 of 2022, a decrease of $142,000 or 14% compared to Q1 of 2021. As a percentage of revenue, EBITDA decreased to 16% for Q1 of 2022 compared to 20% of revenue during Q1 of 2021. Non-GAAP net income for Q1 of 2022 increased to $830,000 or $0.22 per diluted share compared to $687,000 or $0.18 per diluted share during Q1 of 2021. On the balance sheet, our deferred revenue balance, which is revenue we generally expect to recognize over the next 12 months, increased to $3.4 million as of March 31, 2022, compared to $3.1 million as of December 31, 2021, an 11% increase. The increase in deferred revenue can be attributed to the investment we are making in our sales and marketing team, as I discussed earlier in my remarks. On the cash flow statement, we generated cash flow from operations of $548,000 for Q1 of 2022 compared to $1.3 million during Q1 of 2021. The decrease in cash flow from the prior year is due to timing related to working capital. However, this is the 29th consecutive quarter of positive cash flow for the company. And I'll hand it back over to Brian, who will provide you some updates on the business, new products in the pipeline, and everything else that we have planned for the remainder of the year. Brian?