ISG Revenues Revived Despite Write-Down

Information Services Group (ISG), the firm started by former VNU boss Michael Connors, has announced 2011 revenues of $184.4m, re-passing 2008 levels after two years in the doldrums. However the firm posted another large quarterly operating loss - $59.9m - for a goodwill write-down.

Q4 revenue rose 41% to $44.6m, from $31.6m in Q4 2010. The operating loss included a $61.7m non-cash charge for the 'impairment of goodwill' and 'indefinite life assets', and $0.9m in acquisition-related and restructuring costs. The firm has reported similar charges leading to large operating losses in other quarters in 2010 and 2009.

Q4 EBITDA - excluding acquisition-related and restructuring costs - totalled $5.9m compared with $3.3m in the fourth quarter of 2010, while adjusted EBITDA was $5.1m (from $1.0m in Q4 of 2010).

For the full year 2011, revenues were up 40% to $184.4m, compared with $132.0m in 2010. Excluding the non-cash impairment charge of $61.7m and $4.0m in acquisition-related and restructuring costs in 2011, and a non-cash impairment charge of $52.5m and $2.4m in acquisition-related costs in 2010, operating income for 2011 was up from $3.1m to $4.9m.

Connors started the group in 2007 with almost $260m in funds. His company's first acquisition was outsourcing advisory firm TPI, and this was followed last year by UK-based benchmarking and analytics firm Compass and public sector advisor STA Consulting. In January, ISG merged the three companies under the ISG brand, to offer marketing intelligence, insights and advisory services - including research, benchmarking and consulting.

Connors (pictured) comments: 'ISG delivered strong operating performance with double-digit growth in the fourth quarter. Demand is increasing due to the product and service offerings we have available for clients under the ISG brand. We now offer clients one source to drive operational excellence in their organizations.'

For 2012, ISG is predicting 6%-8% constant currency growth in revenues and 10%-15% constant currency growth in full year adjusted EBITDA. The firm plans to continue to use its free cash flow to re-pay debt, repurchase shares and seek 'tuck-in' acquisitions.

Web site: www.isg-one.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.