Mr. Shawn Peters reports

ISC REPORTS 2023 THIRD QUARTER FINANCIAL RESULTS

Information Services Corp. has released its financial results for the third quarter ended Sept. 30, 2023.

Capitalized terms that are used but not defined in this news release have the meaning ascribed to those terms in Management's Discussion & Analysis for the period ended September 30, 2023

2023 Third Quarter Highlights

Revenue was $54.6 million for the quarter, an increase of 12 per cent compared to the third quarter of 2022. The increase was due to continued customer and transaction growth in Services combined with fee increases implemented in Registry Operations in July 2023.

Net income was $4.2 million or $0.24 per basic share and $0.23 per diluted share compared to $7.8 million or $0.44 per basic share and $0.43 per diluted share in the third quarter of 2022. The reduction in net income during the quarter resulted from increased net finance expense due to increased interest rates, higher borrowings used to fund the Upfront Payment, interest accrued on the vendor concession liability to the Province of Saskatchewan and amortization related to the intangible asset associated with the right to operate the Saskatchewan Registries. This was partially offset by strong adjusted EBITDA contributions from Registry Operations and Services.

Net cash flow provided by operating activities was $14.6 million for the quarter, a 3 per cent reduction from $15.1 million in the prior year due to non-cash working capital changes in accounts receivable (due to higher revenue in the current year) and timing of income tax payments, partially offset by the growth of adjusted EBITDA in Registry Operations and Services.

Adjusted net income was $8.4 million or $0.47 per basic share and $0.46 per diluted share compared to $8.7 million or $0.49 per basic share and $0.48 per diluted share in the third quarter of 2022. The slight decrease for the quarter was driven by increased interest expense on long-term debt, largely offset by the strong performance of Registry Operations following fee adjustments introduced during the quarter and continued customer and transaction growth in Services.

Adjusted EBITDA was $19.2 million for the quarter compared to $17.0 million in 2022 primarily due to a higher contribution from Registry Operations driven by fee adjustments implemented during the quarter and continued customer and transaction growth in Services. This increase was partially offset by lower adjusted EBITDA in Technology Solutions and Corporate due to the timing of revenue recognition and continued investments in people and technology. Adjusted EBITDA margin was 35.2 per cent compared to 34.9 per cent in the third quarter of 2022.

Adjusted free cash flow for the quarter was $14.4 million, up 27 per cent compared to $11.4 million in the third quarter of 2022, primarily related to stronger results from operations in Registry Operations and Services during the quarter. This was partially offset by increased capital expenditures related to technology systems in Registry Operations and Services and increased interest expense due to higher interest rates and higher principal balance outstanding as a result of the borrowings to fund the Upfront Payment.

On July 5, 2023, the Company entered into an extension agreement (the extension agreement together with certain related ancillary agreements are collectively referred to as the "Extension Agreement") with the Province of Saskatchewan to extend the term of its exclusive MSA until 2053. The Extension Agreement extends ISC's exclusive right to manage and operate the Saskatchewan Registries. Under the Extension Agreement, ISC was granted the right to introduce and/or enhance fees on certain transactions with applicable fee adjustments that went into effect on July 29, 2023. The consideration to be paid includes the Upfront Payment, which was paid during the quarter, five annual cash payments of $30.0 million per year commencing in July 2024 and annual contingent payments potentially payable after 2033 if certain volume growth criteria are met.

In addition to entering into the Extension Agreement, the MSA was also amended and restated ("Amended and Restated MSA") to, among other things, implement certain incremental terms and conditions, the objectives of which are to enhance security features and protocols for the Saskatchewan Registries, contemplate emerging and future technology enhancements for the Saskatchewan Registries and the services provided pursuant to the Amended and Restated MSA, refresh and clarify governance practices and structure, adjust the registry fees chargeable by the Company, and provide flexibility for change over the life of the extended term.

In connection with the Extension Agreement, ISC entered into an Amended and Restated Credit Agreement with its syndicate of lenders in connection to its Credit Facility. The aggregate amount available under the Credit Facility has been increased from $150.0 million to $250.0 million and consists of ISC's existing $150.0 million revolving credit facility together with a new $100.0 million revolving credit facility. In addition, ISC maintains access to a $100.0 million accordion option, providing the flexibility to upsize the aggregate revolving credit facility up to $350.0 million. The Consolidated Net Funded Debt to EBITDA financial covenant was increased to provide additional balance sheet flexibility to ISC. The expiry date of the Credit Facility of September 2026 remained unchanged. During the quarter, the Company made total drawings of $150.7 million of which $150.0 million was used to fund the Upfront Payment required on the execution of the Extension Agreement while $0.7 million was used to fund transaction costs.

On July 27, 2023, ISC announced that it has expanded the lenders under the Company's Credit Facility to include the Bank of Montreal. The syndicated Credit Facility now includes RBC, CIBC and the BMO. The total amount available under the Credit Facility remained unchanged.

Financial Position as at September 30, 2023

Cash of $21.4 million compared to $34.5 million as of December 31, 2022.

Total debt of $187.2 million compared to $66.0 million as of December 31, 2022. The Company is focused on continuing sustainable growth and rapidly deleveraging towards a long-term net leverage target of 2.0x - 2.5x.

Subsequent Event

On October 31, 2023, ISC announced a new US$3.2 million (approximately CA$4.5 million) contract with the State of Michigan for a period of five years to be delivered through its Technology Solutions segment. This contract includes the delivery of a modern, online Uniform Commercial Code System using the Company's RegSys platform to support service improvement and efficiencies for the State of Michigan.

Commenting on ISC's results, Shawn Peters, President and CEO stated, "The big news of the quarter and year-to-date was our milestone announcement regarding the extension of the term of ISC's exclusive Master Service Agreement with the Province of Saskatchewan to manage and operate the Saskatchewan Registries until 2053. This Extension has been an important priority for us and immediately enhanced the Company's scale and financial profile." Peters continued, "With respect to our three segments, both Registry Operations and Services performed well in difficult economic conditions with Services proving once again to be our driver of organic growth. ISC continues to prove that it can produce sustained, positive performances regardless of economic conditions and although not currently recognized by the market, ISC's fundamentals remain stronger than ever, especially with the extension completed and a solid plan to de-lever the balance sheet in the near-term."

2023 Third Quarter Results of Operations

• Total revenue was $54.6 million, up 12 per cent compared to Q3 2022.
• Registry Operations segment revenue was $27.4 million, up compared to $25.0 million in Q3 2022:
  • Land Registry revenue was $17.8 million, up compared to $15.2 million in Q3 2022.
  • Personal Property Registry revenue was $3.0 million, flat compared to the same prior year period.
  • Corporate Registry revenue was $2.8 million, up compared to $2.6 million in Q3 2022.
  • Property Tax Assessment Services revenue in Registry Operations was $3.9 million, flat compared to the same prior year period.
• Services segment revenue was $25.6 million, up compared to $22.2 million in Q3 2022:
  • Regulatory Solutions revenue was $19.4 million, up compared to $16.3 million in Q3 2022.
  • Recovery Solutions revenue was $2.9 million, up compared to $2.4 million in Q3 2022.
  • Corporate Solutions revenue was $3.3 million, down compared to $3.5 million in Q3 2022.
• Technology Solutions revenue from third parties was $1.6 million, up from $1.5 million in Q3 2022.
• Consolidated expenses (all segments) were $43.3 million, up $6.4 million compared to $36.9 million in Q3 2022.
• Net income was $4.2 million or $0.24 per basic share and $0.23 per diluted share, down $3.6 million compared to $7.8 million or $0.44 per basic and $0.43 per diluted share for Q3 2022.

Outlook

The following section includes forward-looking information, including statements related to our strategy, future results, including revenue and adjusted EBITDA, segment performance, the industries in which we operate, economic activity, growth opportunities, investments, and business development opportunities. Refer to "Caution Regarding Forward-Looking Information" in Management's Discussion & Analysis for the three and nine months ended September 30, 2023.

For the balance of 2023, we expect continued organic growth in our Services segment, while the Registry Operations segment will continue to be a strong contributor to adjusted EBITDA and free cash flow generation. Our year-to-date results continue our history of positive quarter-after-quarter performance and stability; we expect that to continue.

We also expect to execute on our plan to de-lever the balance sheet to realize a long-term net leverage target of 2.0x - 2.5x; a plan which commenced immediately following the announcement of the Extension in July, as evidenced by our third quarter 2023 payment against our outstanding debt.

At the end of October, the Bank of Canada held interest rates at 5 per cent, noting that it was prepared to raise interest rates again if inflation remains high. We therefore expect economic conditions in Canada to remain in line with our expectations for the remainder of 2023. As a result, we expect volumes in the Saskatchewan Land Registry within Registry Operations to remain at current (seasonally adjusted) levels, as well as a continuing positive impact in the Regulatory and Recovery Solutions divisions in Services due to increased due diligence searches and Asset Recovery revenue, respectively. Overall, we believe our performance will remain strong for the balance of the year, being steady in our core products and services, well positioned with certain counter-cyclical businesses and ready to benefit positively from any improvements to market conditions in the future.

With the above factors in mind, we are pleased to reiterate our updated annual guidance provided in August 2023 with revenue for 2023 expected to be between $207.0 million and $212.0 million and adjusted EBITDA1 to be between $71.0 million and $76.0 million. Given the strength of the business to date, we expect revenue to be at the top end of our guidance range and adjusted EBITDA to be towards the lower end of the guidance range, as we continue to invest in people and technology to position ourselves for the growth ahead.

In summary, we are proud of the year-to-date work we have done in 2023 to realize our short-term objectives for the year while pursuing our long-term goals for growth. Although the capital markets are currently challenging, and are presently not recognizing ISC's extremely strong fundamentals, the Company is stronger than ever, especially with the Extension completed, a robust plan to de-lever in the near term and a management team focused on long-term growth.

1 Adjusted EBITDA is not recognized as a measure under IFRS and does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures reported by other companies; refer to section 8.8 "Non-IFRS financial measures" in the MD&A . Refer to section 2 "Consolidated Financial Analysis" in the MD&A for a reconciliation of historical adjusted EBITDA to net income.

Conference Call and Webcast

We will hold an investor conference call on Wednesday, November 8, 2023 at 11:00 a.m. ET to discuss the results. Those joining the call on a listen-only basis are encouraged to join the live audio webcast which will be available on our website. Participants who wish to ask a question on the live call may do so through the ISC website or by registering on-line.

Once registered, participants will receive the dial-in numbers and their unique PIN number. When dialing in, participants will input their PIN and be placed into the call. The audio file with a replay of the webcast will be available about 24 hours after the event on our website. We invite media to attend on a listen-only basis.

About ISC

Headquartered in Canada, ISC is a leading provider of registry and information management services for public data and records. Throughout our history, we have delivered value to our clients by providing solutions to manage, secure and administer information through our Registry Operations, Services and Technology Solutions segments. ISC is focused on sustaining its core business while pursuing new growth opportunities. The Class A Shares of ISC trade on the Toronto Stock Exchange under the symbol ISV.

We seek Safe Harbor.