ACCESS Newswire Inc.

thank you for standing by and welcome to the issuer direct corporation second quarter 2022 earnings conference call today's call will be conducted by the company's founder and chief executive officer brian balberny and its chief financial officer tim petoniak before i turn the call over to mr brian balberny i'd like to read you the company's abbreviated safe harbor statements 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 statements 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 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. Good afternoon, everyone. Thank you for joining us today to discuss the company's second quarter 2022 results. At the market close, we issued a press release announcing our results for the quarter, a copy of which is available in our newsroom. During today's call, we will be referencing these results as well as discussing the second half of this year. Our second quarter results were up 2% year over year, reaching a new record high for quarterly revenues. We also drove margin improvements, increased our deferred revenues, and bookings over the prior periods, which Tim will cover shortly. AccessWire's double-digit growth continues, and compared to the market, we continue to outpace incremental growth compared to the bigger three news wires in the second quarter. During the call today, we will update you on our product mix, customer counts, and overall progress in our platform. But before I turn the call over to Tim for his prepared remarks for 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 plan. In the first quarter, we were able to repurchase 6,200 shares, or about $182,000. And in the second quarter, we were fully in the market and repurchased 163,000 shares for approximately $3.9 million, leaving just less than $1 million remaining at the end of the second quarter in the plan. We are continuing to repurchase our common shares under the plan with the remaining allotment, subject to limitations and plan totals. We expect to complete the plan early this month and are evaluating further repurchase plans in the near term. As I said in the past, we believe share repurchases are a good use of capital as part of our diversified capital allocation strategy. Long term, we remain confident in our business and our cash flows generated from operations. Repurchasing is an ideal way for us to reward our shareholders. And with that, I'll now turn the call to Tim.

Thank you, Brian, and good afternoon, everyone. As Brian mentioned, we were able to reach a new record high for quarterly revenue, as well as improve gross margins. This is primarily driven by our access by our news brand as revenue and gross margin improved for the three and six months ended June 30th of 2022. I will now highlight some of the financial results we achieved during the second quarter and first six months of 2022. During the second quarter of 2022, we achieved record quarterly revenue of $5.8 million. a two per cent increase from five point seven million in two of twenty twenty one for the six months ended june thirtieth of twenty twenty two total revenue was eleven point one million a four per cent increase from ten point seven million for the first half of twenty twenty one The increase for both periods was primarily driven by our communication revenue stream, which increased 5% and 6% during the three and six months ended June 30th of 2022, compared to the same periods of the prior year. During Q2 of 2022 and for the first six months of 2022, communication revenue accounted for 64% of total revenue. In the prior year, communication revenue was 61% and 63% of total revenue, respectively. The increase in communication revenue was driven by our AccessWire branded Newswire, which increased 16% for both the second quarter and first half of 2022 compared to the same periods of 2021. We also had increased revenue from our investor-relation websites and newsfeed products. These increases were offset by a decline in revenue from our events and webcasting business due to lower demand for these products. Revenue from our compliance business was down 4% for the second quarter and flat during the first half of 2022 compared to the same periods of 2021. A decline in revenue from our stock transfer services due to less corporate actions and a reduction in our legacy ARS services was partially offset by an increase in revenue from our print and proxy fulfillment services due to increased projects associated with annual meetings and special transactions. Changing gears to gross margin, our overall gross margin percentage improved 300 basis points and 400 basis points during the three and six months ended June 30th of 2022, compared to the same periods of the prior year. Gross margin percentage was 77% for both the second quarter of 2022 and the first half of 2022, compared to 74% and 73% for the same periods of last year. Gross margins from our communication business increased 5 percentage points for both the quarter and first half of 2022 due to lower teleconferencing and distribution costs, coupled with an increase in access wire revenue as a percentage of total communication revenue. Gross margin percentages for our compliance business decreased one percentage point for the three months ended June 30th of 2022 and increased one percentage point for the six months ended June 30th of 2022 compared to the same periods of the prior year. The decrease for the second quarter was due to higher percentage of revenue attributed to our lower margin print and proxy and fulfillment service business. Moving down to operating income. We posted operating income of $1.2 million for the second quarter of 2022 compared to $1.4 million during Q2 of 2021. For the six-month ended June 30th of 2022, operating income decreased to $1.8 million from $2.1 million during the first half of 2021. The decrease in operating income, despite an increase in revenue and gross margins, is due to an increase in our operating expenses, primarily due to our continued investment and expansion of our corporate sales and marketing teams. GA cost increased 24% and 22% for the three and six months ended June 30th of 2022, compared to the prior year, due to an increase in stock compensation and other corporate initiatives associated with the investments in our business. Sales and marketing costs increased 13% for the second quarter and 15% for the first half of 2022 compared to the same periods of 2021 due to our continued investment in sales and marketing initiatives with an increase in headcount, advertising, and digital marketing expense. Product development costs decreased 16% for the quarter and 3% for the first half of 2022 compared to the same periods of the prior year. This decrease is due to fewer consultants used on development projects during the current year, partially offset by costs capitalized in the prior year related to the development of our newsroom product. On a gap basis, during Q2 of 2022, we generated net income of $841,000, or $0.22 per diluted share, compared to $1.1 million, or $0.29 per diluted share, during Q2 of 2021. Net income was $1.4 million or $0.36 per diluted share for the first half of 2022 compared to net income of $1.7 million or $0.43 per diluted share for the first half of 2021. Looking at some non-GAAP metrics, EBITDA for the second quarter of 2022 was $1.3 million or 23% of revenue compared to $1.6 million or 29% of revenue during Q2 of 2021. For the first half of 2022, EBITDA was $2.2 million or 19% of revenue compared to $2.6 million, or 25% of revenue, during the first half of 2021. Non-GAAP net income was $1.1 million, or $0.29 per diluted share for Q2 of 2022, compared to $1.2 million, or $0.31 per diluted share, during Q2 of 2021. for the first half of 2022 non-gap net income was flat compared to the prior year at 1.9 million however increased one cent per diluted share due to shares repurchased through our 2022 buyback program switching over to the balance sheet and cash flow statement our deferred revenue balance which is revenue we expect to recognize primarily over the next 12 months increased to $3.5 million as of June 30, 2022, compared to $3.1 million as of December 31, 2021, an increase of 13%. On the cash flow statement, our cash flow from operations for the first half of 2022 was $1.6 million compared to $2.1 million in the prior year. This is the 30th consecutive quarter of positive cash flow for the company. I'll now hand it over to Brian, who will provide some updates on the business, our new products, and everything else we have planned for the remainder of the year. Brian?