ACCESS Newswire Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Issuer Direct Corporation fourth quarter and year-ended 2023 earnings conference call. My name is James Michael, and I am an 18-year veteran of the business, employee number two here at Issuer Direct, and today I'm charged with managing the compliance business that accounts for approximately 27% of our overall revenues last year. Like my fellow employees doing this in previous quarters, this is our way of ensuring our shareholders get to know all of us here at Issuer Direct. I am the ridiculously handsome, bald-bearded guy. It is my pleasure to introduce my mentor, the company's founder and chief executive officer, Brian Balberny, and our vice president of finance and controller, Steve Nur. Before I turn the call over to Mr. Balberny, I'd like to read you the company's abbreviated Safe Harbor statement. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial position, 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, the one, the only, Mr. Balbirnie.

The one and only, huh? Well, thanks, James. For those of you who don't know James, he is the practical joker of the office, if you can't tell. always has a story to tell, and conversely, is one of the most knowledgeable people in the industry and understands the world of compliance and public companies more than anybody I know. With that said, greetings, everyone, and thank you, James, for today's introduction. So happy you're able to do this for us today. Eighteen years has gone by so very quickly. The business would not be the same without you, sir. As we have said before, we will introduce a new employee each quarter. The first quarter earnings call on May 9th, we will hear from another amazing ISDR employee. Now let's talk about the quarter and year. We appreciate everyone joining us today to discuss our results for the period. Our press release, which is accessible on our newsroom, has just been released and provides key takeaways on our performance for the quarter and year end 2023. We are pleased with the fourth quarter results. Total revenue was up 6% year over year to 7.5 million, driven by our news distribution businesses, which both Steve and I will discuss throughout the call today. We also delivered on earnings for the quarter. Adjusted EBITDA was up 5% to 1.1 million from a million last year, and our subscription business also grew 5% for the quarter, and our average price per release in our core news business has held steady. I will talk more about why this is important a bit later. We have and continue to be bullish on our communications platform, led by our news distribution brands, AccessWire and Newswire, where we are gaining market share each month, customers, and further brand recognition. As we move forward strategically, we know we had to spend a good bit of time in the back half of 2023 fine-tuning the product set, as we now know, called MediaSuite, a true SaaS reoccurring subscription business, something I will spend some time talking about here today on the call. But before I talk about these accolades and what we expect for 2024, I want to highlight some nice wins and accomplishments in 2023. This year, we did work for brands like Delta, Bosch Health, Celsius, AutoZone, who trust us with their investor relations, earnings calls, and news distribution. When we consider our entire customer base, it's absolute pleasure to work with the 11,000-plus customers around the world. When we look back at our history and the growth of our business over the periods, I can't help but be satisfied with our accomplishments, proud of our teams and thankful to our shareholders, and because of AccessWire and our acquisition of Newswire, see prior year revenues up 42%. But that's behind us now, and we are focused this year and for several years on transforming our business, continuing to grow customers and revenues, and outpacing the industry in some important metrics. like year-over-year volumes in news distribution and outpacing industry annual growth rates, something we feel confident that we will and can do for years to come. As always, there's a lot more to talk about, so I will turn the call over to Steve to cover the fourth quarter and year-end results. Steve.

Thank you, Brian, and good afternoon, everyone. As Brian mentioned, quarterly and year-end results were primarily driven by our acquisition of Newswire and growth in our AccessWire news brand, which resulted in our press release revenue increasing 12% for the quarter and 75% for the full year. I will now highlight some of the financial results we achieved during the fourth quarter and full year ended 2023. During the fourth quarter of 2023, we achieved revenues of $7.5 million, 6% increase from $7.1 million in Q4 of 2022. For the full year, total revenue was $33.4 million, a 42% increase from $23.5 million in 2022. The increase in the quarter and year-to-date revenue was driven by both our communications and compliance revenue streams. On the communication side, the increase is primarily related to the acquisition of Newswire in November of 2022. We also achieved increased revenue in AccessWire, which increased 1% during the fourth quarter and 10% for the year compared to the same periods of the prior year. Partially offsetting these increases was a decrease in revenues from webcasting and events due to less demand of our virtual products, as well as a large conference which occurred last year but did not occur in the current year. During Q4 of 2023 and a full year of 2023, communications revenue accounted for 75% and 73% of total revenue, respectively. In the prior year, communication revenue was 78% and 69% of total revenue during both Q4 and full year of 2022. Revenue from our compliance business increased 20% for the fourth quarter and 24% during the full year compared to the same periods of 2022. The increase was primarily related to revenue from our print and proxy fulfillment services, due to an increase in both the number of projects and the average size of the projects, specifically a couple of large projects which occurred in the second quarter of 2023. We also experienced an increase in revenue from our transfer agent business due to an increase in market activity and corporate actions. Changing gears to gross margin, our overall gross margin percentage remained consistent at 74% and 76% for the fourth quarter and full year of 2023 compared to the same periods of the prior year. Gross margins from our communications business were also consistent for the fourth quarter of 2023 compared to the same period of the prior year. However, on a year-to-date basis decreased 1% primarily due to an increase in distribution costs as we continue to expand our reach and global footprint. Gross margins from our compliance business increased 4% for the fourth quarter and 3% for the full year of 2023 compared to the same periods of the prior year. This increase in gross margin percentage is primarily due to higher margins achieved on some of the larger print and proxy jobs, as well as the increase in transfer agent revenue. Moving down to operating income and loss, we posted operating loss of $105,000 for the fourth quarter of 2023, compared to operating income of $44,000 during the fourth quarter of 2022. The full year operating income increased to $2.8 million from $2.7 million in 2022. For both periods presented, operating income was impacted by an increase in operating expenses, primarily due to an increase in amortization expense attributed to intangible assets related to the Newswire acquisition. Additionally, we experienced increases in general and administrative expenses and product development expenses during both Q4 and the full year of 2023, as well as an increase in sales and marketing expenses for the full year of 2023. General and administrative expenses increased 11% for the quarter and 28% year to date. The increase during the quarter is primarily related to an increase in bad debt expense, and for the year-to-date period is primarily due to additional costs to operate Newswire, along with increased stock compensation expense, employee-related costs, and bad debt expense. Sales and marketing costs decreased 3% for the quarter and increased 39% for the full year compared to the same periods of 2022. These increases are due to incremental costs associated with operating the Newswire business, as well as our continued investment in advertising, digital marketing spend, and automation enhancements. Product development and costs increased 16% and 95% for the quarter and full year compared to the same period of 2022, which is directly attributed to the additional costs associated with operating Newswire and the addition of our new CTO. On a GAAP basis, we had a loss of $726,000, or 19 cents per diluted share, compared to a net loss of $109,000 or $0.03 per diluted share during Q4 of 2022. Then income for the full year of 2023 was $766,000 or $0.20 per diluted share compared to $1.9 million or $0.52 per diluted share in 2022. Looking at some non-GAAP metrics, EBITDA for the fourth quarter of 2023 was $234,000 or 3% of revenue compared to $589,000 or 8% of revenue during Q4 of 2022. For the full year of 2023, EBITDA was $5.4 million or 16% of revenue compared to $3.7 million or also 16% of revenue during 2022. Adjusted EBITDA for Q4 of 2023 was $1.1 million or 14% of revenue compared to $1 million or 14% of revenue during Q4 of 2022. For the full year of 2023, adjusted EBITDA was $7.7 million or 23% of revenue compared to 4.9 million or 21% of revenue for 2022. Non-GAAP net income was $575,000 or 15 cents per diluted share for Q4 of 2023 compared to $665,000 or 18 cents per diluted share during Q4 of 2022. For the full year of 2023, non-GAAP net income was 4.9 million or $1.28 per diluted share compared to 3.5 million or 95 cents per diluted share in 2022. Switching over to cash flow metrics, we just completed our 33rd consecutive quarter of positive cash flows from operations for the company. Cash flow from operations for Q4 of 2023 was $770,000, compared to just under $1 million for Q4 of 2022. For the full year of 2022, cash flow from operations was $3.1 million, compared to $4 million from the prior year. However, adjusted free cash flow was $687,000 for Q4 of 2023. compared to $2 million for Q4 of 2022, and $3.3 million for the full year of 2023, compared to $5.1 million in 2022. I will now turn the call back to Brian, who will provide some updates on the business, our new products, and everything else we have planned for 2024. Brian?