Information Services Group Announces Record Fourth-Quarter and Full-Year 2022 Results
Information Services Group (ISG) reported record fourth-quarter revenues of $74 million, exceeding guidance despite a $3.2 million negative FX impact. The company achieved a net income of $4 million and a GAAP EPS of $0.09. Full-year revenues reached $286 million, marking an 8% increase in constant currency. ISG declared a first-quarter dividend of $0.04 per share and amended its credit agreement, enhancing terms and extending maturity to February 2028. Guidance for Q1 2023 estimates revenues of $73-$75 million and adjusted EBITDA between $10-$11 million.
- Fourth-quarter revenues set a record at $74 million, up 7% year-over-year.
- Full-year revenues reached $286 million, up 8% in constant currency.
- Net income increased 27% to $20 million for the full year.
- Adjusted EBITDA was a record $43 million for the full year, reflecting an 11% rise.
- Currency translation negatively impacted revenues by $12.7 million for the full year.
- Operating income for the fourth quarter was flat compared to the prior year.
-
Reports fourth-quarter GAAP revenues of
, an all-time quarterly high, exceeding guidance and including a negative FX impact of$74 million $3.2 million -
Reports fourth-quarter net income of
, GAAP EPS of$4 million and adjusted EPS of$0.09 , all fourth-quarter records$0.13 -
Reports record fourth-quarter adjusted EBITDA of
, exceeding guidance$11 million -
Achieves record full-year results: GAAP revenues of
, up$286 million 8% in constant currency; operating income of , up$29 million 17% ; net income of , up$20 million 27% ; adjusted net income of , up$27 million 18% , GAAP EPS of , up$0.39 30% ; adjusted EPS of , up$0.53 20% ; adjusted EBITDA of , up$43 million 11% -
Declares first-quarter dividend of
per share, payable$0.04 March 31, 2023 , to shareholders of record as ofMarch 20, 2023 -
As previously announced, amends credit agreement to include more favorable terms, an extended maturity date, elimination of
of mandatory annual principal payments, and conversion to an all-revolving credit facility with$4.3 million of borrowing capacity$140 million -
Sets first-quarter guidance: revenues between
and$73 million and adjusted EBITDA between$75 million and$10 million $11 million
“ISG delivered our best quarterly and full-year performance in our 17-year history—on every key financial metric,” said
Some clients, especially those in industries and geographies facing the toughest market conditions, are turning to ISG to help them optimize their IT and operating environments, Connors said. “Clients trust ISG for our unmatched combination of data, insights, expertise, tools and solutions to help streamline their technology and operating environments, reinvest in continuous transformation and get the most out of the collaboration between people and technology,” he said.
Fourth-Quarter 2022 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”) was a record
Full-Year 2022 Results
Reported revenues for the full-year were a record
ISG reported record full-year operating income of
Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the full year was a record
Full-year adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) reached a record
Other Financial and Operating Highlights
ISG generated
During the fourth quarter, ISG paid dividends of
“Our strong operating results allowed us to return
Amended Credit Agreement
As previously announced, on
2023 First-Quarter Revenue and Adjusted EBITDA Guidance
“For the first quarter, ISG is targeting revenues of between
Quarterly 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, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense, on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, gross-debt-to-adjusted-EBITDA ratio 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 |
||||||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
Revenues | $ |
74,167 |
|
$ |
69,569 |
|
$ |
286,267 |
|
$ |
277,832 |
|
||||
Operating expenses | ||||||||||||||||
Direct costs and expenses for advisors |
|
44,539 |
|
|
41,063 |
|
|
169,650 |
|
|
168,475 |
|
||||
Selling, general and administrative |
|
20,963 |
|
|
19,991 |
|
|
81,769 |
|
|
78,759 |
|
||||
Depreciation and amortization |
|
1,496 |
|
|
1,369 |
|
|
5,368 |
|
|
5,331 |
|
||||
Operating income |
|
7,169 |
|
|
7,146 |
|
|
29,480 |
|
|
25,267 |
|
||||
Interest income |
|
63 |
|
|
(54 |
) |
|
189 |
|
|
142 |
|
||||
Interest expense |
|
(1,160 |
) |
|
(548 |
) |
|
(3,157 |
) |
|
(2,342 |
) |
||||
Foreign currency transaction gain (loss) |
|
(78 |
) |
|
46 |
|
|
170 |
|
|
44 |
|
||||
Income before taxes |
|
5,994 |
|
|
6,590 |
|
|
26,682 |
|
|
23,111 |
|
||||
Income tax provision |
|
1,711 |
|
|
3,012 |
|
|
6,956 |
|
|
7,582 |
|
||||
Net income | $ |
4,283 |
|
$ |
3,578 |
|
$ |
19,726 |
|
$ |
15,529 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,128 |
|
|
48,988 |
|
|
48,175 |
|
|
48,638 |
|
||||
Diluted |
|
49,769 |
|
|
51,885 |
|
|
50,420 |
|
|
51,756 |
|
||||
Earnings per share: | ||||||||||||||||
Basic | $ |
0.09 |
|
$ |
0.07 |
|
$ |
0.41 |
|
$ |
0.32 |
|
||||
Diluted | $ |
0.09 |
|
$ |
0.07 |
|
$ |
0.39 |
|
$ |
0.30 |
|
Reconciliation from GAAP to Non-GAAP | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
Net income | $ |
4,283 |
|
$ |
3,578 |
|
$ |
19,726 |
|
$ |
15,529 |
|
||||
Plus: | ||||||||||||||||
Interest expense (net of interest income) |
|
1,097 |
|
|
602 |
|
|
2,968 |
|
|
2,200 |
|
||||
Income taxes |
|
1,711 |
|
|
3,012 |
|
|
6,956 |
|
|
7,582 |
|
||||
Depreciation and amortization |
|
1,496 |
|
|
1,369 |
|
|
5,368 |
|
|
5,331 |
|
||||
Interest accretion associated with contingent consideration |
|
25 |
|
|
(12 |
) |
|
33 |
|
|
101 |
|
||||
Acquisition-related costs (1) |
|
241 |
|
|
254 |
|
|
282 |
|
|
240 |
|
||||
Severance, integration and other expense |
|
175 |
|
|
65 |
|
|
633 |
|
|
1,406 |
|
||||
Foreign currency transaction (gain) loss |
|
78 |
|
|
(46 |
) |
|
(170 |
) |
|
(44 |
) |
||||
Non-cash stock compensation |
|
2,028 |
|
|
1,392 |
|
|
7,460 |
|
|
6,467 |
|
||||
Adjusted EBITDA | $ |
11,134 |
|
$ |
10,214 |
|
$ |
43,256 |
|
$ |
38,812 |
|
||||
Net income | $ |
4,283 |
|
$ |
3,578 |
|
$ |
19,726 |
|
$ |
15,529 |
|
||||
Plus: | ||||||||||||||||
Non-cash stock compensation |
|
2,028 |
|
|
1,392 |
|
|
7,460 |
|
|
6,467 |
|
||||
Intangible amortization |
|
743 |
|
|
642 |
|
|
2,323 |
|
|
2,643 |
|
||||
Interest accretion associated with contingent consideration |
|
25 |
|
|
(12 |
) |
|
33 |
|
|
101 |
|
||||
Acquisition-related costs (1) |
|
241 |
|
|
254 |
|
|
282 |
|
|
240 |
|
||||
Severance, integration and other expense |
|
175 |
|
|
65 |
|
|
633 |
|
|
1,406 |
|
||||
Foreign currency transaction (gain) loss |
|
78 |
|
|
(46 |
) |
|
(170 |
) |
|
(44 |
) |
||||
Tax effect (2) |
|
(1,052 |
) |
|
(734 |
) |
|
(3,379 |
) |
|
(3,460 |
) |
||||
Adjusted net income | $ |
6,521 |
|
$ |
5,139 |
|
$ |
26,908 |
|
$ |
22,882 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
48,128 |
|
|
48,988 |
|
|
48,175 |
|
|
48,638 |
|
||||
Diluted |
|
49,769 |
|
|
51,885 |
|
|
50,420 |
|
|
51,756 |
|
||||
Adjusted earnings per share: | ||||||||||||||||
Basic | $ |
0.14 |
|
$ |
0.10 |
|
$ |
0.56 |
|
$ |
0.47 |
|
||||
Diluted | $ |
0.13 |
|
$ |
0.10 |
|
$ |
0.53 |
|
$ |
0.44 |
|
(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 Ended |
Constant currency impact |
Three Months Ended Adjusted |
Three Months Ended |
Constant currency impact |
Three Months Ended Adjusted |
||||||||||||||
Revenue | $ |
74,167 |
$ |
4,051 |
$ |
78,218 |
$ |
69,569 |
$ |
844 |
|
$ |
70,413 |
||||||
Operating income | $ |
7,169 |
$ |
244 |
$ |
7,413 |
$ |
7,146 |
$ |
240 |
|
$ |
7,386 |
||||||
Adjusted EBITDA | $ |
11,134 |
$ |
303 |
$ |
11,437 |
$ |
10,214 |
$ |
212 |
|
$ |
10,426 |
||||||
Twelve Months Ended |
Constant currency impact |
Twelve Months Ended Adjusted |
Twelve Months Ended |
Constant currency impact |
Twelve Months Ended Adjusted |
||||||||||||||
Revenue | $ |
286,267 |
$ |
11,795 |
$ |
298,062 |
$ |
277,832 |
$ |
(871 |
) |
$ |
276,961 |
||||||
Operating income | $ |
29,480 |
$ |
1,217 |
$ |
30,697 |
$ |
25,267 |
$ |
(460 |
) |
$ |
24,807 |
||||||
Adjusted EBITDA | $ |
43,256 |
$ |
1,383 |
$ |
44,639 |
$ |
38,812 |
$ |
(512 |
) |
$ |
38,300 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230309005568/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 are ISG's fourth-quarter 2022 financial results?
How did ISG perform in the full year 2022?
What is ISG's guidance for the first quarter of 2023?
What dividend did ISG declare for the first quarter of 2023?