Business Context and Reporting Period
Company: Information Services Group, Inc. (ISG)
Filing Date: June 24, 2008
Reporting Period: 2007 Quarterly Proforma Results
Context: ISG completed the acquisition of TPI Advisory Services Americas, Inc. (TPI) on November 16, 2007. Prior to this, ISG was a special purpose acquisition company with no operations. TPI is deemed the accounting predecessor. This filing provides 2007 quarterly proforma statements of income assuming the acquisition occurred on January 1, 2007, to assist investors in evaluating financial performance.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it defines the non-GAAP measures used to evaluate performance:
- EBITDA: Defined as net income plus income taxes, net interest income/(expense), and depreciation and amortization of intangible assets resulting from acquisitions.
- Cash Earnings Per Share: Defined as net income plus amortization of intangible assets resulting from acquisitions and non-cash stock-based compensation.
Specific financial figures are contained in Exhibit 99.1, which is referenced but not included in the provided text.
Material Changes
The primary material change is the acquisition of TPI Advisory Services Americas, Inc. on November 16, 2007. This transaction transformed ISG from a special purpose acquisition company with no operations into an operating entity. The proforma results presented adjust for this change to show what 2007 performance would have looked like had the acquisition occurred at the beginning of the year.
Guidance, Outlook, and Management Commentary
Management Commentary: Management states that while GAAP results are reported, non-GAAP measures (EBITDA and Cash EPS) are provided to enhance the evaluation of ongoing operating results. These measures exclude non-cash and special charges that management believes obscure the understanding of core operations and future prospects. They are used internally to evaluate business strategies and management performance.
Guidance and Risks: The filing text does not contain specific forward-looking guidance, risk factors, or contingencies beyond the standard disclosure that non-GAAP measures should not be considered in isolation or as a substitute for GAAP results.
Investor Verification Checklist
- Review Exhibit 99.1 for the actual numerical values of the 2007 quarterly proforma statements of income.
- Verify the reconciliation between the reported non-GAAP measures (EBITDA, Cash EPS) and the most closely applicable GAAP measures.
- Confirm the specific impact of the TPI acquisition on the company's debt structure and liquidity, as these figures are not detailed in the summary text.
- Assess the comparability of the proforma results against the actual post-acquisition results for the fourth quarter of 2007.