Business Context and Reporting Period
Company: Information Services Group, Inc. (ISG)
Filing Type: Form 8-K (Current Report)
Date of Report: May 6, 2010
Reporting Period: First Quarter 2010 ended March 31, 2010
Business Overview: ISG provides information services and reports financial results in accordance with U.S. GAAP, supplemented by non-GAAP measures to enhance the evaluation of ongoing operating results.
Key Financial Metrics
The filing serves as a notification of the release of Q1 2010 earnings and does not contain specific numerical data for revenue, profit, cash flow, margins, debt, or liquidity within the text of the 8-K itself. These figures are contained in the attached press release (Exhibit 99.1).
Non-GAAP Measures Discussed:
- Adjusted EBITDA: Defined as net income plus income taxes, net interest income/(expense), depreciation, amortization of intangible assets from acquisitions, non-cash stock compensation, and non-cash impairment charges.
- Adjusted Net Income: Defined as net income plus amortization of intangible assets, non-cash stock compensation, and non-cash impairment charges (tax-adjusted).
- Constant Currency Basis: Selected financial data presented using foreign currency exchange rates as of November 30, 2009, to exclude the impact of currency translation on core operations.
Material Changes
The filing text does not provide specific quantitative comparisons to prior periods. It notes that certain prior period amounts have been reclassified to conform to current period presentation and definitions of non-GAAP measurements.
Guidance, Outlook, and Management Commentary
Management Commentary: Management believes non-GAAP measures provide useful information by excluding non-cash and special charges that may obscure the understanding of current financial performance and future prospects. These measures are used internally to evaluate business strategies and management performance.
Outlook and Events: ISG scheduled a teleconference call to discuss financial results on Friday, May 7, 2010, at 11:00 a.m. (EDT). Access details were provided via the company website.
Risks and Contingencies: The filing does not explicitly list new risks or contingencies in the text provided, though it references the exclusion of impairment charges for goodwill and intangible assets in its non-GAAP definitions.
Investor Verification Checklist
- Review the attached Press Release (Exhibit 99.1) for specific Q1 2010 revenue, net income, and cash flow figures.
- Verify the reconciliation tables between GAAP and non-GAAP measures (Adjusted EBITDA and Adjusted Net Income) in the full earnings release.
- Check the impact of foreign currency translation by comparing reported results with constant currency results.
- Confirm the details of the reclassifications made to prior period amounts to ensure accurate year-over-year comparisons.
- Listen to or review the transcript of the May 7, 2010, teleconference for management's forward-looking statements and guidance.