Information Services Group Announces TPI Nine Months Performance and Results of Share Repurchase Plan
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TPI Delivers Solid Nine Months Results
ISG Implements Significant Share Repurchases; Announces Program to Buyback Additional Shares and/or Warrants
STAMFORD, Conn., Nov. 28 / -- Information Services Group (ISG) (AMEX:III.U)(AMEX:III)(AMEX:III.WS) announced nine months results for TPI, the largest sourcing advisory firm in the world. ISG completed the acquisition of TPI on November 16, 2007. ISG also announced today that the number of its outstanding common shares has been significantly reduced through its repurchase program as well as shareholder elections to convert shares for a prorated portion of ISG's trust account.
"The closing of our acquisition of TPI together with the significant reduction in the number of outstanding ISG shares puts the Company squarely on track to reach our objective to build a high-growth, industry-leading information services company," said Michael P. Connors, Chairman and CEO of ISG. "TPI's financial results are in line with our expectations with solid underlying top and bottom line growth."
TPI Delivers Solid Nine Months 2007 Performance
ISG said today that TPI reported revenues of $129.5 million for the first nine months of 2007, up $6.2 million or 5% from the prior year. During the first half of 2006, TPI concluded an extraordinarily large ($10.7 million) and unique IT renegotiation for its largest client. There was no equivalent counterpart to this transaction during the first half of 2007. Before the impact of this extraordinarily large and unique IT renegotiation, TPI revenues increased $16.9 million or 15% during the first nine months of 2007.
TPI experienced strong underlying demand for its sourcing services in all of its geographies during the first nine months of 2007. Areas of particular strength included strategy, benchmarking and assessment services, service management and governance support as well as consulting and analytics.
"I am pleased with TPI's strong revenue performance in the first nine months of this year," said Connors. "Our international operations continued to deliver robust growth -- up 19% -- and our revenues in North America were up 13% before the impact of the unique IT related renegotiation we concluded in 2006."
Net income for the first nine months of 2007 was $5.6 million, up 43%. Earnings before interest, taxes and depreciation and amortization (EBITDA, a non-GAAP measure) totaled $13.8 million, an increase of $2.6 million or 23% from last year. During the first nine months of 2007, depreciation and amortization, taxes and net interest expense totaled $1.6 million, $4.0 million and $2.6 million, respectively. First nine months 2006 net income totaled $3.9 million while depreciation and amortization, taxes and net interest expense totaled $1.8 million, $2.6 million and $2.8 million, respectively. EBITDA in the first nine months of 2006 included the benefit (approximately $2.3 million) of the extraordinarily large and unique IT renegotiation mentioned previously. Before the impact of this extraordinarily large and unique IT renegotiation, EBITDA for the first nine months of 2007 increased $4.4 million or 47% from prior year.
During the first nine months of 2007, TPI recorded $1.1 million in severance costs and $0.6 million in acquisition expenses related to the ISG transaction. During the first nine months of 2007, TPI invested $0.9 million to launch operations in Sweden, Japan and the public sector industry vertical in North America. These investments had no 2006 counterpart. In addition, first nine months of 2007 EBITDA included approximately $2.4 million of costs related to personnel who have exited or are expected to exit the business in connection with the acquisition.
"Underlying revenue growth continues to be very solid while we have grown EBITDA significantly, even after incurring deal-related severance and transactional costs as well as making investments in new international operations and the launch of our public sector vertical in the U.S." Mr. Connors added. "Demand for TPI services continues to be strong as we head into 2008."
Share Repurchase Program Continues; TPI Employees Purchase ISG Shares
ISG announced that it had repurchased 7,648,188 shares of its common stock from existing shareholders under the Company's previously announced $85 million share repurchase program. In addition, at the special meeting held on November 13, 2007, shareholders owning 4,484,180 shares of ISG's common stock elected to redeem those shares for a prorated portion of the Company's trust account. ISG also confirmed that 128 TPI employees had purchased 2,881,752 shares of newly issued common stock under the terms of previously signed subscription, non-competition and related agreements. These transactions were completed on November 16, 2007 and collectively resulted in a net reduction of 23% of ISG's 40,429,687 outstanding common shares.
Separately, ISG announced that its Board of Directors had amended its repurchase program such that $15 million remains available for repurchases of common stock and/or warrants.
"We believe that the actions already taken to reduce our share count together with our ongoing repurchase program will create significant shareholder value," said Mr. Connors.
About Information Services Group, Inc.
Information Services Group, Inc. (ISG) was founded in 2006 to build an industry-leading, high-growth, information-based services company by acquiring and growing businesses in advisory, data, business and media information services. In November 2007, the company acquired TPI, the largest sourcing advisory firm in the world. Based in Stamford, Conn., ISG has a proven leadership team with global experience in information-based services and a track record of creating significant value for shareowners, clients and employees. For more, visit www.informationsg.com.
About TPI
TPI, a unit of Information Services Group, Inc. (ISG), is the founder and innovator of the sourcing advisory industry, and the largest sourcing advisory firm in the world. We are expert at a broad range of business support functions and related research methodologies. Utilizing deep functional domain expertise and extensive practical experience, TPI's accomplished industry experts collaborate with organizations to help them advance their business operations through the best combination of outsourcing, offshoring, shared services and internal service optimization. For additional information, visit www.tpi.net.
FCMN Contact: pjjohnson@nyc.rr.com
Source: Information Services Group
CONTACT:
Press
Barry Holt
+1-203-517-3110
bholt@informationsg.com
Web site: www.informationsg.com
