Information Services Group Announces Fourth-Quarter 2021 Results
Information Services Group (ISG) reported record fourth-quarter GAAP revenues of $70 million, exceeding estimates. The firm achieved net income of $4 million and adjusted EBITDA of $10 million for the quarter. For the full year, ISG's revenue reached $278 million, with adjusted EPS at $0.44. The company declared a $0.03 first-quarter dividend and provided guidance for revenues between $69 million and $71 million. ISG's strong cash flow of $42 million and a year-end cash balance of $47.5 million underscores robust performance amid digital demand.
- Fourth-quarter revenues reached a record $70 million, up 5% year-over-year.
- Fourth-quarter adjusted EBITDA hit a record $10 million, up 11% from the previous year.
- Full-year revenues amounted to $278 million, marking a 12% increase.
- Operating income increased significantly to $25 million for the full year, up 173%.
- Fourth-quarter net income of $4 million is more than double the prior year's figure.
- Declared a first-quarter dividend of $0.03 per share.
- Currency translation negatively impacted fourth-quarter reported revenues by $0.7 million.
- ISG noted potential impacts on demand due to the ongoing effects of COVID-19 and geopolitical tensions.
-
Reports record fourth-quarter GAAP revenues of
, exceeding guidance$70 million -
Reports fourth-quarter net income of
, GAAP EPS of$4 million and adjusted EPS of$0.07 , all fourth-quarter records$0.10 -
Reports record fourth-quarter adjusted EBITDA of
, exceeding guidance$10 million -
Reports full-year revenue of
, operating income of$278 million , GAAP EPS of$25 million and adjusted EPS of$0.30 .44—all record highs$0 -
Delivers strong full-year operating cash flow of
, with year-end cash balance of$42 million $47.5 million -
Declares first-quarter dividend of
per share, payable$0.03 April 6 to record holders as ofMarch 21 -
Sets first-quarter 2022 guidance: revenues between
and$69 million and adjusted EBITDA of between$71 million and$9 million $10 million
“ISG delivered another outstanding financial performance in Q4, capping a historic 2021—our best year ever,” said
Connors said ISG sees market momentum continuing in 2022. ”Enterprises are powering through the headwinds of the ongoing pandemic, inflation and supply chain disruptions in their drive to go digital. We see many companies still in the early stages of their digital and cloud journeys ramping up investments and looking for a trusted partner like ISG to determine a future vision, lead rapid change, find the right ecosystem partners and realize value at scale. We are well-positioned to build on our momentum in 2022.”
Fourth-Quarter 2021 Results
Reported revenues for the fourth quarter were a record
ISG reported fourth-quarter operating income of
Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the fourth quarter was
Fourth-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) reached a record
Full-Year 2021 Results
ISG reported record full-year 2021 revenues of
ISG reported record full-year operating income of
Adjusted 2021 net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was
Full-year 2021 adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) reached a record
Other Financial and Operating Highlights
ISG generated
2022 First-Quarter Revenue and Adjusted EBITDA Guidance
“For the first quarter, ISG is targeting revenues of between
First-Quarter Dividend
The ISG Board of Directors declared a first-quarter dividend of
Conference Call
ISG has scheduled a call for
Forward-Looking Statements
This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions, are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries including without limitation: (1) failure to secure new engagements or loss of important clients; (2) ability to hire and retain enough qualified employees to support operations; (3) ability to maintain or increase billing and utilization rates; (4) management of growth; (5) success of expansion internationally; (6) competition; (7) ability to move the product mix into higher margin businesses; (8) general political and social conditions such as war, political unrest and terrorism; (9) healthcare and benefit cost management; (10) ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (11) currency fluctuations and exchange rate adjustments; (12) ability to successfully consummate or integrate strategic acquisitions; (13) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (14) engagements may be terminated, delayed or reduced in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the
Non-GAAP Financial Measures
ISG reports all financial information required in accordance with
ISG provides adjusted EBITDA (defined as net income plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, change in contingent consideration, acquisition-related costs, severance, integration and other expense and financing-related costs), adjusted net income (defined as net income plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, change in contingent consideration, acquisition-related costs, severance, integration and other expense, financing-related costs, and write-off of deferred financing costs, on a tax-adjusted basis), adjusted net income per diluted share and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior-periods local currency financial results using the same point in time exchange rates and then compare the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.
Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.
About ISG
ISG (
Condensed Consolidated Statement of Income and Comprehensive Income | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||
Revenues | $ |
69,569 |
|
$ |
66,389 |
|
$ |
277,832 |
|
$ |
249,128 |
|
||||
Operating expenses | ||||||||||||||||
Direct costs and expenses for advisors |
|
41,063 |
|
|
38,340 |
|
|
168,475 |
|
|
149,878 |
|
||||
Selling, general and administrative |
|
19,991 |
|
|
22,993 |
|
|
78,759 |
|
|
83,785 |
|
||||
Depreciation and amortization |
|
1,369 |
|
|
1,555 |
|
|
5,331 |
|
|
6,196 |
|
||||
Operating income |
|
7,146 |
|
|
3,501 |
|
|
25,267 |
|
|
9,269 |
|
||||
Interest income |
|
(54 |
) |
|
72 |
|
|
142 |
|
|
260 |
|
||||
Interest expense |
|
(548 |
) |
|
(673 |
) |
|
(2,342 |
) |
|
(3,563 |
) |
||||
Foreign currency transaction gain (loss) |
|
46 |
|
|
(112 |
) |
|
44 |
|
|
(98 |
) |
||||
Income before taxes |
|
6,590 |
|
|
2,788 |
|
|
23,111 |
|
|
5,868 |
|
||||
Income tax provision |
|
3,012 |
|
|
1,341 |
|
|
7,582 |
|
|
3,113 |
|
||||
Net income | $ |
3,578 |
|
$ |
1,447 |
|
$ |
15,529 |
|
$ |
2,755 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,988 |
|
|
48,072 |
|
|
48,638 |
|
|
47,717 |
|
||||
Diluted |
|
51,885 |
|
|
51,250 |
|
|
51,756 |
|
|
49,972 |
|
||||
Earnings per share: | ||||||||||||||||
Basic | $ |
0.07 |
|
$ |
0.03 |
|
$ |
0.32 |
|
$ |
0.06 |
|
||||
Diluted | $ |
0.07 |
|
$ |
0.03 |
|
$ |
0.30 |
|
$ |
0.06 |
|
|
||||||||||||||||
Reconciliation from GAAP to Non-GAAP |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net income | $ |
3,578 |
|
$ |
1,447 |
|
$ |
15,529 |
|
$ |
2,755 |
|
||||
Plus: | ||||||||||||||||
Interest expense (net of interest income) |
|
602 |
|
|
601 |
|
|
2,200 |
|
|
3,303 |
|
||||
Income taxes |
|
3,012 |
|
|
1,341 |
|
|
7,582 |
|
|
3,113 |
|
||||
Depreciation and amortization |
|
1,369 |
|
|
1,555 |
|
|
5,331 |
|
|
6,196 |
|
||||
Change in contingent consideration |
|
(12 |
) |
|
371 |
|
|
101 |
|
|
419 |
|
||||
Acquisition-related costs (1) |
|
254 |
|
|
406 |
|
|
240 |
|
|
756 |
|
||||
Severance, integration and other expense |
|
65 |
|
|
987 |
|
|
1,406 |
|
|
2,717 |
|
||||
Financing-related costs |
|
- |
|
|
- |
|
|
- |
|
|
92 |
|
||||
Foreign currency transaction (gain) loss |
|
(46 |
) |
|
112 |
|
|
(44 |
) |
|
98 |
|
||||
Non-cash stock compensation |
|
1,392 |
|
|
2,347 |
|
|
6,467 |
|
|
8,891 |
|
||||
Adjusted EBITDA | $ |
10,214 |
|
$ |
9,167 |
|
$ |
38,812 |
|
$ |
28,340 |
|
||||
Net income | $ |
3,578 |
|
$ |
1,447 |
|
$ |
15,529 |
|
$ |
2,755 |
|
||||
Plus: | ||||||||||||||||
Non-cash stock compensation |
|
1,392 |
|
|
2,347 |
|
|
6,467 |
|
|
8,891 |
|
||||
Intangible amortization |
|
642 |
|
|
914 |
|
|
2,643 |
|
|
3,532 |
|
||||
Change in contingent consideration |
|
(12 |
) |
|
371 |
|
|
101 |
|
|
419 |
|
||||
Acquisition-related costs (1) |
|
254 |
|
|
406 |
|
|
240 |
|
|
756 |
|
||||
Severance, integration and other expense |
|
65 |
|
|
987 |
|
|
1,406 |
|
|
2,717 |
|
||||
Financing-related costs |
|
- |
|
|
- |
|
|
- |
|
|
92 |
|
||||
Write-off of deferred financing costs |
|
- |
|
|
- |
|
|
- |
|
|
167 |
|
||||
Foreign currency transaction (gain) loss |
|
(46 |
) |
|
112 |
|
|
(44 |
) |
|
98 |
|
||||
Tax effect (2) |
|
(734 |
) |
|
(1,644 |
) |
|
(3,460 |
) |
|
(5,335 |
) |
||||
Adjusted net income | $ |
5,139 |
|
$ |
4,940 |
|
$ |
22,882 |
|
$ |
14,092 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,988 |
|
|
48,072 |
|
|
48,638 |
|
|
47,717 |
|
||||
Diluted |
|
51,885 |
|
|
51,250 |
|
|
51,756 |
|
|
49,972 |
|
||||
Adjusted earnings per share: | ||||||||||||||||
Basic | $ |
0.10 |
|
$ |
0.10 |
|
$ |
0.47 |
|
$ |
0.30 |
|
||||
Diluted | $ |
0.10 |
|
$ |
0.10 |
|
$ |
0.44 |
|
$ |
0.28 |
|
||||
(1) Consists of expenses from acquisition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities. |
||||||||||||||||
(2) Marginal tax rate of |
Selected Financial Data | ||||||||||||||||||||
Constant Currency Comparison | ||||||||||||||||||||
Three Months | Three Months | |||||||||||||||||||
Three Months | Constant | Ended | Three Months | Constant | Ended | |||||||||||||||
Ended | currency | Ended | currency | |||||||||||||||||
impact | Adjusted | impact | Adjusted | |||||||||||||||||
Revenue | $ |
69,569 |
$ |
(180 |
) |
$ |
69,389 |
$ |
66,389 |
$ |
(860 |
) |
$ |
65,529 |
||||||
Operating income | $ |
7,146 |
$ |
81 |
|
$ |
7,227 |
$ |
3,501 |
$ |
(235 |
) |
$ |
3,266 |
||||||
Adjusted EBITDA | $ |
10,214 |
$ |
37 |
|
$ |
10,251 |
$ |
9,167 |
$ |
(286 |
) |
$ |
8,881 |
||||||
Twelve Months | Twelve Months | |||||||||||||||||||
Twelve Months | Constant | Ended | Twelve Months | Constant | Ended | |||||||||||||||
Ended | currency | Ended | currency | |||||||||||||||||
impact | Adjusted | impact | Adjusted | |||||||||||||||||
Revenue | $ |
277,832 |
$ |
(4,226 |
) |
$ |
273,606 |
$ |
249,128 |
$ |
1,494 |
|
$ |
250,622 |
||||||
Operating income | $ |
25,267 |
$ |
(869 |
) |
$ |
24,398 |
$ |
9,269 |
$ |
506 |
|
$ |
9,775 |
||||||
Adjusted EBITDA | $ |
38,812 |
$ |
(973 |
) |
$ |
37,839 |
$ |
28,340 |
$ |
450 |
|
$ |
28,790 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220310005581/en/
Press Contact:
+1 203 517 3119
will.thoretz@isg-one.com
Investor Contact:
+1 203 517 3104
bert.alfonso@isg-one.com
Source:
FAQ
What were ISG's fourth-quarter revenues and earnings for 2021?
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