Exhibit 99.1
| News Release |
FOR IMMEDIATE RELEASE
Contacts: |
|
|
Media Relations: |
| Investor Relations: |
David Pendery |
| Andy Schulz |
+1 303 397 2468 |
| +1 303 397 2969 |
david.pendery@ihs.com |
| andy.schulz@ihs.com |
IHS Inc. Reports Strong Fourth Quarter and Full Year 2008 Results
Record fourth quarter EPS of $0.53 and Adjusted EPS of $0.58, up 33 percent and 23 percent, respectively; Record full year EPS of $1.57 and Adjusted EPS of $2.05, up 13 percent and 24 percent, respectively
ENGLEWOOD, Colo. (January 8, 2009) – IHS Inc. (NYSE: IHS), a leading global source of critical information and insight, today reported strong results for the fourth quarter and year ended November 30, 2008. Revenue for the fourth quarter of 2008 totaled $231 million, a 17 percent increase over fourth quarter 2007 revenue of $198 million. Net income for the fourth quarter of 2008 was $33.3 million, or $0.53 per diluted share, compared to fourth quarter 2007 net income of $25.1 million, or $0.40 per diluted share. Revenue for fiscal year 2008 totaled $844 million, up 23 percent over the prior year total of $688 million. Net income for the full year 2008 was $99.0 million, or $1.57 per diluted share, compared to full year 2007 net income of $83.8 million, or $1.39 per diluted share.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) totaled $64.0 million for the fourth quarter of 2008, up 26 percent from $51.0 million in the fourth quarter of 2007. Adjusted earnings per diluted share were $0.58 for the fourth quarter of 2008, an increase of 23 percent over the prior-year period. Adjusted EBITDA for fiscal year 2008 totaled $225 million, up 34 percent from $168 million in 2007. Adjusted EBITDA and adjusted earnings per share are non-GAAP (Generally Accepted Accounting Principles) financial measures used by management to measure operating performance. Please see the end of this release for more information about these non-GAAP measures.
“As a testament to the criticality of our information and insight to our customers, we continued to deliver great operating and financial results in an unprecedented economy,” said Jerre Stead, IHS chairman and chief executive officer. “We are focused on helping our customers navigate through this tough environment.”
1
Fourth-Quarter 2008 Details
Revenue for the fourth quarter of 2008 totaled $231 million, a 17 percent increase over fourth-quarter 2007 revenue of $198 million. Organic revenue growth in the fourth quarter of 2008 was eight percent overall and 12 percent for the subscription-based portion of the business, which represented 74 percent of total revenue. Acquisitions contributed 14 percent of the increase, while foreign-currency movements decreased revenue by five percent compared to last year’s fourth quarter. The company continued to grow its business overall in all three regions. The Americas (North and South America) segment increased its revenue during the fourth quarter by 21 percent, to $145 million, compared to $120 million in the prior year’s fourth quarter. The EMEA (Europe, Middle East and Africa) segment grew its fourth quarter revenue by eight percent, to $68.4 million, compared to $63.4 million in the prior year. The APAC (Asia Pacific) segment’s revenue increased by 23 percent, to $17.6 million, compared to $14.3 million in the fourth quarter of 2007.
Adjusted EBITDA for the fourth quarter of 2008 was $64.0 million, up 26 percent over the prior-year period. Operating income increased $10.3 million year-over-year to $45.7 million. Americas’ operating income was $45.6 million, up 16 percent over the prior-year quarter. EMEA’s operating income was up 42 percent to $15.6 million. APAC’s operating income was $6.2 million, up 45 percent over the prior-year amount.
Full Year 2008
Revenue for fiscal year 2008 totaled $844 million, up 23 percent over the prior year total of $688 million. Organic revenue growth was eight percent overall in 2008 after adjusting for a certain engineering standard released once every three years (seven percent unadjusted). For the subscription-based portion of the business, organic growth was 11%. Acquisitions added 16 percent, while foreign exchange movements offset the above by less than one percent for the full year. The Americas segment grew its revenue during fiscal year 2008 by 22 percent, to $521 million, compared to $428 million in the prior-year period. The EMEA segment grew its full year 2008 revenue by 25 percent, to $263 million, compared to $210 million in the prior year. The APAC segment increased its revenue by 19 percent, to $59.6 million, compared to $50.1 million in 2007.
Adjusted EBITDA for fiscal-year 2008 totaled $225 million, up 34 percent from $168 million in 2007. Operating income increased 15 percent year-over-year to $134 million, up from $117 million. Operating income for the year ended November 30, 2008, included the $12 million restructuring charge reported in the third quarter. The restructuring charge was primarily split between the Americas and EMEA segments. Inclusive of the restructuring charge, Americas’ operating income was $161 million, up 20 percent over the prior-year period (up 24 percent before the restructuring charge). EMEA grew its year-to-date 2008 operating income to $44.3 million, up 26 percent over 2007 (up 43 percent before the restructuring charge). APAC’s operating income was $18.1 million, up 44 percent over last year.
2
Net income for fiscal year 2008 increased 18 percent to $99.0 million, or $1.57 per diluted share, compared to prior-year net income of $83.8 million, or $1.39 per diluted share.
Cash Flows
IHS generated $189 million of cash flow from operations during the year ended November 30, 2008, as compared to last year’s $142 million.
Balance Sheet
IHS ended fiscal year 2008 with $31 million of cash and cash equivalents, and $96 million of debt.
“The business continues to perform well, with the sequential quarterly increase in our top-line organic growth rate a particularly positive highlight of the quarter,” stated Michael J. Sullivan, IHS executive vice president and chief financial officer. “Strong cash flow generation and available capacity under our credit facility are competitive advantages in the current economic climate.”
Share Repurchase Program
During the fourth quarter of 2008, IHS repurchased 527,829 shares of its common stock for approximately $25.0 million, or $47.36 per share. During fiscal 2008, IHS repurchased 1,199,595 shares of its common stock for approximately $65.5 million, or $54.64 per share.
Outlook (forward-looking statement)
For the year ending November 30, 2009, we expect:
· All-in revenue growth of 16 to 18 percent from a 2008 base of $844 million;
· All-in adjusted EBITDA growth of 21 to 24 percent from a 2008 base of $225 million;
· Depreciation and amortization expense to be in the range of $50-55 million;
· Net interest expense to approximate $1-2 million;
· Stock-based compensation expense to be in the range of $55-60 million;
· Effective tax rate to be approximately 29 to 30 percent; and
· Weighted average diluted shares to be approximately 64.2 million.
This above outlook assumes constant currencies and no further acquisitions, restructurings or unanticipated events. See discussion of adjusted EBITDA and non-GAAP financial measures at the end of this release.
As previously announced, IHS will hold a conference call to discuss fourth quarter and full year 2008 results on January 8, 2009, at 3:00 p.m. MST (5:00 p.m. EST). The conference call will be simultaneously webcast on the company’s website, www.ihs.com.
3
Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to the financial statements based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader’s understanding of our financial performance, but no non-GAAP measure should be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures, such as adjusted EBITDA and adjusted earnings per diluted share, are provided within the schedules attached to this release.
EBITDA is defined as net income plus or minus net interest plus income taxes, depreciation and amortization. Adjusted EBITDA includes our share of adjusted EBITDA from an unconsolidated joint venture and excludes non-cash items, gains and losses on sales of assets and investments and other items that management does not utilize in assessing our operating performance (as further described in the attached financial schedules). Adjusted earnings per diluted share exclude similar non-cash items as adjusted EBITDA. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure.
Management uses these non-GAAP measures in its operational and financial decision-making, believing that it is useful to eliminate certain items in order to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. As a result, internal management reports used during monthly operating reviews feature the adjusted EBITDA and adjusted earnings per diluted share metrics. Management also believes that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. EBITDA, adjusted EBITDA, and adjusted earnings per diluted share are also used by research analysts, investment bankers and lenders to assess our operating performance. For example, a measure similar to EBITDA is required by the lenders under our credit facility.
Because not all companies use identical calculations, our presentation of non-GAAP financial measures may not be comparable to other similarly-titled measures of other companies. However, these measures can still be useful in evaluating our performance against our peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures. For example, a company with greater GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, eliminating the effects of interest income and expense moderates the impact of a company’s capital structure on its performance.
All of the items included in the reconciliation from net income to adjusted EBITDA are either (i) non-cash items (e.g., depreciation and amortization) or (ii) items that management does not consider to be useful in assessing our operating performance (e.g., income taxes and gain on sale of assets). In the case of the non-cash items, management believes that investors can better assess our operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect our ability to generate free cash flow or invest in our business. For example, by eliminating depreciation and amortization from EBITDA, users can
4
compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, management believes that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.
IHS Forward-Looking Statements:
This release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and similar expressions. Although IHS and its management believe that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties—many of which are difficult to predict and generally beyond the control of IHS—that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified by IHS from time to time in its public filings. Other than as required by applicable law, IHS does not undertake any obligation to update or revise any forward-looking information or statements. Please consult our public filings at www.sec.gov or www.ihs.com.
About IHS Inc. (www.ihs.com)
IHS (NYSE: IHS) is a leading global source of critical information and insight, dedicated to providing the most complete and trusted data and expertise. IHS product and service solutions span four areas of information that encompass the most important concerns facing global business today: Energy, Product Lifecycle, Security and Environment. By focusing on customers first, IHS enables innovative and successful decision-making for customers ranging from governments and multinational companies to smaller companies and technical professionals in more than 180 countries. IHS is celebrating its 50th anniversary in 2009 and employs approximately 3,800 people in 20 countries.
IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2009 IHS Inc. All rights reserved.
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5
IHS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share amounts)
|
| November 30, |
| ||||
|
| 2008 |
| 2007 |
| ||
|
| (Unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 31,040 |
| $ | 148,484 |
|
Short-term investments |
| — |
| 10,518 |
| ||
Accounts receivable, net |
| 207,815 |
| 175,542 |
| ||
Deferred subscription costs |
| 35,948 |
| 35,910 |
| ||
Deferred income taxes |
| 28,801 |
| 17,681 |
| ||
Other |
| 14,213 |
| 14,112 |
| ||
Total current assets |
| 317,817 |
| 402,247 |
| ||
|
|
|
|
|
| ||
Non-current assets: |
|
|
|
|
| ||
Property and equipment, net |
| 59,578 |
| 58,756 |
| ||
Equity investments in joint venture |
| 56,139 |
| — |
| ||
Intangible assets, net |
| 285,902 |
| 206,359 |
| ||
Goodwill, net |
| 705,077 |
| 564,582 |
| ||
Prepaid pension asset |
| 8,768 |
| 91,116 |
| ||
Other |
| 2,899 |
| 747 |
| ||
Total non-current assets |
| 1,118,363 |
| 921,560 |
| ||
Total assets |
| $ | 1,436,180 |
| $ | 1,323,807 |
|
Liabilities and stockholders’ equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Short-term debt |
| $ | 96,020 |
| $ | 3,062 |
|
Accounts payable |
| 35,084 |
| 37,550 |
| ||
Accrued compensation |
| 39,083 |
| 37,014 |
| ||
Accrued royalties |
| 24,769 |
| 22,684 |
| ||
Other accrued expenses |
| 58,831 |
| 37,435 |
| ||
Income tax payable |
| 3,994 |
| 15,255 |
| ||
Deferred subscription revenue |
| 288,145 |
| 239,395 |
| ||
Total current liabilities |
| 545,926 |
| 392,395 |
| ||
|
|
|
|
|
| ||
Long-term debt |
| — |
| 37 |
| ||
Accrued pension liability |
| 6,778 |
| 11,965 |
| ||
Accrued post-retirement benefits |
| 8,852 |
| 10,203 |
| ||
Deferred income taxes |
| 65,749 |
| 60,461 |
| ||
Other liabilities |
| 7,820 |
| 7,619 |
| ||
|
|
|
|
|
| ||
Minority interests |
| — |
| 219 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Class A common stock, $0.01 par value per share, 80,000,000 shares authorized, 64,090,207 and 49,831,293 shares issued and 62,802,179 and 48,758,518 shares outstanding at November 30, 2008 and 2007, respectively |
| 641 |
| 498 |
| ||
Class B common stock, $0.01 par value per share, 13,750,000 shares authorized, issued and outstanding at November 30, 2007 |
| — |
| 138 |
| ||
Additional paid-in capital |
| 408,007 |
| 381,124 |
| ||
Treasury stock, at cost; 1,288,028 and 1,072,775 shares at November 30, 2008 and 2007, respectively |
| (64,632 | ) | (46,045 | ) | ||
Retained earnings |
| 584,219 |
| 483,804 |
| ||
Accumulated other comprehensive income (loss) |
| (127,180 | ) | 21,389 |
| ||
Total stockholders’ equity |
| 801,055 |
| 840,908 |
| ||
Total liabilities and stockholders’ equity |
| $ | 1,436,180 |
| $ | 1,323,807 |
|
6
IHS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
|
| Quarter Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
| (Unaudited) |
| ||||||||||
Revenue: |
|
|
|
|
|
|
|
|
| ||||
Products |
| $ | 197,994 |
| $ | 170,174 |
| $ | 722,311 |
| $ | 589,602 |
|
Services |
| 32,632 |
| 27,341 |
| 121,719 |
| 98,790 |
| ||||
Total revenue |
| 230,626 |
| 197,515 |
| 844,030 |
| 688,392 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Cost of revenue: |
|
|
|
|
|
|
|
|
| ||||
Products |
| 78,427 |
| 66,743 |
| 294,929 |
| 240,634 |
| ||||
Services |
| 20,623 |
| 19,275 |
| 77,802 |
| 61,924 |
| ||||
Total cost of revenue (includes stock-based compensation expense of $283; $303; $1,361 and $1,142 for the three months and years ended November 30, 2008 and 2007, respectively) |
| 99,050 |
| 86,018 |
| 372,731 |
| 302,558 |
| ||||
Selling, general and administrative (includes stock-based compensation expense of $6,259; $7,615; $38,611 and $29,299 for the three months and years ended November 30, 2008 and 2007, respectively) |
| 77,678 |
| 68,606 |
| 295,523 |
| 249,583 |
| ||||
Depreciation and amortization |
| 11,229 |
| 8,859 |
| 39,410 |
| 25,478 |
| ||||
Restructuring charge (credit) |
| (390 | ) | (154 | ) | 12,089 |
| (154 | ) | ||||
Gain on sales of assets, net |
| (209 | ) | (2 | ) | (328 | ) | (758 | ) | ||||
Net periodic pension and post-retirement expense (benefits) |
| (443 | ) | (303 | ) | (3,704 | ) | (668 | ) | ||||
Other expense (income), net |
| (1,960 | ) | (870 | ) | (5,202 | ) | (4,249 | ) | ||||
Total operating expenses |
| 184,955 |
| 162,154 |
| 710,519 |
| 571,790 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
| 45,671 |
| 35,361 |
| 133,511 |
| 116,602 |
| ||||
Interest income |
| 494 |
| 1,466 |
| 3,162 |
| 6,784 |
| ||||
Interest expense |
| (1,140 | ) | (412 | ) | (2,482 | ) | (720 | ) | ||||
Non-operating income, net |
| (646 | ) | 1,054 |
| 680 |
| 6,064 |
| ||||
Income from continuing operations before income taxes, minority interests and income from equity-method investment |
| 45,025 |
| 36,415 |
| 134,191 |
| 122,666 |
| ||||
Provision for income taxes |
| (12,903 | ) | (11,295 | ) | (38,512 | ) | (38,827 | ) | ||||
Income from continuing operations before minority interests and income from equity-method investment |
| 32,122 |
| 25,120 |
| 95,679 |
| 83,839 |
| ||||
Minority interests |
| 44 |
| (35 | ) | (13 | ) | (64 | ) | ||||
Income from equity-method investment |
| 1,114 |
| — |
| 3,327 |
| — |
| ||||
Net income |
| $ | 33,280 |
| $ | 25,085 |
| $ | 98,993 |
| $ | 83,775 |
|
Net income per share: |
|
|
|
|
|
|
|
|
| ||||
Basic (Class A and Class B common stock) |
| $ | 0.54 |
| $ | 0.41 |
| $ | 1.60 |
| $ | 1.41 |
|
Diluted (Class A and Class B common stock) |
| $ | 0.53 |
| $ | 0.40 |
| $ | 1.57 |
| $ | 1.39 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
| ||||
Basic (Class A and B common stock) |
| 62,168 |
| 61,749 |
| 62,063 |
| 59,463 |
| ||||
Diluted (Class A and Class B common stock) |
| 62,998 |
| 62,839 |
| 62,957 |
| 60,426 |
|
7
IHS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
| Year Ended November 30, |
| ||||
|
| 2008 |
| 2007 |
| ||
|
| (Unaudited) |
| ||||
Operating activities |
|
|
|
|
| ||
Net income |
| $ | 98,993 |
| $ | 83,775 |
|
Reconciliation of net income to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 39,410 |
| 25,478 |
| ||
Stock-based compensation expense |
| 39,972 |
| 30,441 |
| ||
Gain on sales of assets, net |
| (328 | ) | (758 | ) | ||
Impairment of assets |
| 323 |
| — |
| ||
Distributions from equity-method investment |
| 3,924 |
| — |
| ||
Non-cash net periodic pension and post-retirement benefits |
| (5,551 | ) | (3,975 | ) | ||
Undistributed earnings of equity method investments, net |
| (3,327 | ) | (31 | ) | ||
Minority interests |
| (202 | ) | (168 | ) | ||
Deferred income taxes |
| 4,833 |
| 1,614 |
| ||
Change in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable, net |
| (23,944 | ) | (5,545 | ) | ||
Other current assets |
| (1,314 | ) | (2,084 | ) | ||
Accounts payable |
| (4,789 | ) | (15,640 | ) | ||
Accrued expenses |
| 8,398 |
| 4,892 |
| ||
Income taxes |
| (3,627 | ) | 11,151 |
| ||
Deferred subscription revenue |
| 36,580 |
| 12,587 |
| ||
Other liabilities |
| (102 | ) | — |
| ||
Net cash provided by operating activities |
| 189,249 |
| 141,737 |
| ||
Investing activities |
|
|
|
|
| ||
Capital expenditures on property and equipment |
| (13,885 | ) | (11,890 | ) | ||
Acquisitions of businesses, net of cash acquired |
| (272,844 | ) | (114,626 | ) | ||
Intangible assets acquired |
| (4,000 | ) | — |
| ||
Change in other assets |
| (3,979 | ) | (1,285 | ) | ||
Settlements of forward contracts |
| (881 | ) | — |
| ||
Purchase of investments |
| — |
| (98,975 | ) | ||
Sales and maturities of investments |
| 10,500 |
| 90,483 |
| ||
Proceeds from sales of assets |
| 140 |
| 2,461 |
| ||
Net cash used in investing activities |
| (284,949 | ) | (133,832 | ) | ||
Financing activities |
|
|
|
|
| ||
Proceeds from borrowings |
| 160,000 |
| — |
| ||
Repayment of borrowings |
| (83,099 | ) | (537 | ) | ||
Tax benefit from equity compensation plans |
| 3,952 |
| 1,051 |
| ||
Repurchases of common stock |
| (84,362 | ) | (38,494 | ) | ||
Net cash used in financing activities |
| (3,509 | ) | (37,980 | ) | ||
Foreign exchange impact on cash balance |
| (18,235 | ) | (1,475 | ) | ||
Net decrease in cash and cash equivalents |
| (117,444 | ) | (31,550 | ) | ||
Cash and cash equivalents at the beginning of the period |
| 148,484 |
| 180,034 |
| ||
Cash and cash equivalents at the end of the period |
| $ | 31,040 |
| $ | 148,484 |
|
8
IHS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands)
IHS Inc.
|
| Three Months Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
| (Unaudited) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 33,280 |
| $ | 25,085 |
| $ | 98,993 |
| $ | 83,775 |
|
Interest income |
| (494 | ) | (1,466 | ) | (3,162 | ) | (6,784 | ) | ||||
Interest expense |
| 1,140 |
| 412 |
| 2,482 |
| 720 |
| ||||
Provision for income taxes |
| 12,903 |
| 11,295 |
| 38,512 |
| 38,827 |
| ||||
Depreciation and amortization |
| 11,229 |
| 8,859 |
| 39,410 |
| 25,478 |
| ||||
EBITDA |
| 58,058 |
| 44,185 |
| 176,235 |
| 142,016 |
| ||||
Stock-based compensation expense |
| 6,542 |
| 7,918 |
| 39,972 |
| 30,441 |
| ||||
Restructuring charge (credit) |
| (390 | ) | (154 | ) | 12,089 |
| (154 | ) | ||||
Gain on sales of assets, net |
| (209 | ) | (2 | ) | (328 | ) | (758 | ) | ||||
Non-cash net periodic pension and post-retirement benefits |
| (866 | ) | (987 | ) | (5,551 | ) | (3,975 | ) | ||||
Income from equity-method investment |
| (1,114 | ) | — |
| (3,327 | ) | — |
| ||||
50% of Lloyd’s-Register Fairplay’s adjusted EBITDA |
| 2,012 |
| — |
| 6,201 |
| — |
| ||||
Adjusted EBITDA |
| $ | 64,033 |
| $ | 50,960 |
| $ | 225,291 |
| $ | 167,570 |
|
Lloyd’s-Register Fairplay
|
| Three Months Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007(a) |
| 2008 |
| 2007(a) |
| ||||
|
| (Unaudited) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 2,831 |
| $ | — |
| $ | 8,667 |
| $ | — |
|
Interest expense, net |
| (44 | ) | — |
| (69 | ) | — |
| ||||
Provision for income taxes |
| 1,101 |
| — |
| 3,348 |
| — |
| ||||
Depreciation and amortization |
| 136 |
| — |
| 458 |
| — |
| ||||
EBITDA / Adjusted EBITDA |
| $ | 4,024 |
| $ | — |
| $ | 12,404 |
| $ | — |
|
50% of Adjusted EBITDA |
| $ | 2,012 |
| $ | — |
| $ | 6,201 |
| $ | — |
|
Summary Lloyd’s-Register Fairplay Adjusted F/S
|
| Three Months Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007(a) |
| 2008 |
| 2007(a) |
| ||||
|
| (Unaudited) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 9,184 |
| $ | — |
| $ | 29,013 |
| $ | — |
|
Operating expenses |
| (5,296 | ) | — |
| (17,057 | ) | — |
| ||||
Operating income |
| $ | 3,888 |
| — |
| $ | 11,956 |
| — |
| ||
Net income |
| $ | 2,831 |
| $ | — |
| $ | 8,667 |
| $ | — |
|
50% of net income |
| $ | 1,416 |
| $ | — |
| $ | 4,334 |
| $ | — |
|
Amortization expense for purchased intangibles |
| (419 | ) | — |
| (1,398 | ) | — |
| ||||
Tax benefit on amortization expense for purchased intangibles |
| 117 |
| — |
| 391 |
| — |
| ||||
Income from equity-method investment |
| $ | 1,114 |
| $ | — |
| $ | 3,327 |
| $ | — |
|
(a) Note: We acquired a 50% interest in Lloyd’s-Register Fairplay on March 3, 2008
9
IHS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands)
|
| Three Months Ended |
| ||||
|
| 2008 |
| 2007 |
| ||
|
| (Unaudited) |
| ||||
|
|
|
|
|
| ||
Americas |
| $ | 144,597 |
| $ | 119,886 |
|
EMEA |
| 68,435 |
| 63,361 |
| ||
APAC |
| 17,594 |
| 14,268 |
| ||
Corporate |
| — |
| — |
| ||
Revenue |
| $ | 230,626 |
| $ | 197,515 |
|
|
|
|
|
|
| ||
Americas |
| $ | 45,593 |
| $ | 39,439 |
|
EMEA |
| 15,553 |
| 10,965 |
| ||
APAC |
| 6,171 |
| 4,267 |
| ||
Corporate |
| (21,646 | ) | (19,310 | ) | ||
Operating income |
| $ | 45,671 |
| $ | 35,361 |
|
|
| Three Months Ended November 30, 2008 |
| |||||||||||||
|
| Americas |
| EMEA |
| APAC |
| Corporate |
| Total |
| |||||
|
| (Unaudited) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
| $ | 45,593 |
| $ | 15,553 |
| $ | 6,171 |
| $ | (21,646 | ) | $ | 45,671 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation expense |
| — |
| — |
| — |
| 6,542 |
| 6,542 |
| |||||
Depreciation and amortization |
| 7,407 |
| 2,989 |
| 31 |
| 802 |
| 11,229 |
| |||||
Restructuring charge (credit) |
| (15 | ) | (378 | ) | — |
| 3 |
| (390 | ) | |||||
Gain on sales of assets, net |
| — |
| (209 | ) | — |
| — |
| (209 | ) | |||||
Non-cash net periodic pension and post-retirement benefits |
| — |
| — |
| — |
| (866 | ) | (866 | ) | |||||
Minority interest |
| — |
| 44 |
| — |
| — |
| 44 |
| |||||
50% of Lloyd’s-Register Fairplay’s adjusted EBITDA |
| — |
| 2,012 |
| — |
| — |
| 2,012 |
| |||||
Adjusted EBITDA |
| $ | 52,985 |
| $ | 20,011 |
| $ | 6,202 |
| $ | (15,165 | ) | $ | 64,033 |
|
|
| Three Months Ended November 30, 2007 |
| |||||||||||||
|
| Americas |
| EMEA |
| APAC |
| Corporate |
| Total |
| |||||
|
| (Unaudited) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
| $ | 39,439 |
| $ | 10,965 |
| $ | 4,267 |
| $ | (19,310 | ) | $ | 35,361 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation expense |
| — |
| — |
| — |
| 7,918 |
| 7,918 |
| |||||
Depreciation and amortization |
| 4,897 |
| 3,309 |
| 38 |
| 615 |
| 8,859 |
| |||||
Restructuring charge |
| — |
| (154 | ) | — |
| — |
| (154 | ) | |||||
Gain on sales of assets, net |
| — |
| — |
| — |
| (2 | ) | (2 | ) | |||||
Non-cash net periodic pension and post-retirement benefits |
| — |
| — |
| — |
| (987 | ) | (987 | ) | |||||
Minority interest |
| — |
| (35 | ) | — |
| — |
| (35 | ) | |||||
Adjusted EBITDA |
| $ | 44,336 |
| $ | 14,085 |
| $ | 4,305 |
| $ | (11,766 | ) | $ | 50,960 |
|
10
IHS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands)
|
| Year Ended |
| ||||
|
| 2008 |
| 2007 |
| ||
|
| (Unaudited) |
| ||||
|
|
|
|
|
| ||
Americas |
| $ | 520,925 |
| $ | 428,025 |
|
EMEA |
| 263,457 |
| 210,299 |
| ||
APAC |
| 59,648 |
| 50,068 |
| ||
Corporate |
| — |
| — |
| ||
Revenue |
| $ | 844,030 |
| $ | 688,392 |
|
|
|
|
|
|
| ||
Americas |
| $ | 160,757 |
| $ | 133,785 |
|
EMEA |
| 44,258 |
| 35,200 |
| ||
APAC |
| 18,098 |
| 12,582 |
| ||
Corporate |
| (89,602 | ) | (64,965 | ) | ||
Operating income |
| $ | 133,511 |
| $ | 116,602 |
|
|
| Year Ended November 30, 2008 |
| |||||||||||||
|
| Americas |
| EMEA |
| APAC |
| Corporate |
| Total |
| |||||
|
| (Unaudited) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
| $ | 160,757 |
| $ | 44,258 |
| $ | 18,098 |
| $ | (89,602 | ) | $ | 133,511 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation expense |
| — |
| — |
| — |
| 39,972 |
| 39,972 |
| |||||
Depreciation and amortization |
| 23,187 |
| 12,997 |
| 132 |
| 3,094 |
| 39,410 |
| |||||
Restructuring charge |
| 5,732 |
| 5,945 |
| 24 |
| 388 |
| 12,089 |
| |||||
Gain on sales of assets, net |
| — |
| (328 | ) | — |
| — |
| (328 | ) | |||||
Non-cash net periodic pension and post-retirement benefits |
| — |
| — |
| — |
| (5,551 | ) | (5,551 | ) | |||||
Minority interest |
| — |
| (13 | ) | — |
| — |
| (13 | ) | |||||
50% of Lloyd’s-Register Fairplay’s adjusted EBITDA |
| — |
| 6,201 |
| — |
| — |
| 6,201 |
| |||||
Adjusted EBITDA |
| $ | 189,676 |
| $ | 69,060 |
| $ | 18,254 |
| $ | (51,699 | ) | $ | 225,291 |
|
|
| Year Ended November 30, 2007 |
| |||||||||||||
|
| Americas |
| EMEA |
| APAC |
| Corporate |
| Total |
| |||||
|
| (Unaudited) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
| $ | 133,785 |
| $ | 35,200 |
| $ | 12,582 |
| $ | (64,965 | ) | $ | 116,602 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation expense |
| — |
| — |
| — |
| 30,441 |
| 30,441 |
| |||||
Depreciation and amortization |
| 15,242 |
| 7,801 |
| 128 |
| 2,307 |
| 25,478 |
| |||||
Restructuring charge |
| — |
| (154 | ) | — |
| — |
| (154 | ) | |||||
Gain on sales of assets, net |
| — |
| — |
| — |
| (758 | ) | (758 | ) | |||||
Non-cash net periodic pension and post-retirement benefits |
| — |
| — |
| — |
| (3,975 | ) | (3,975 | ) | |||||
Minority interest |
| — |
| (64 | ) | — |
| — |
| (64 | ) | |||||
Adjusted EBITDA |
| $ | 149,027 |
| $ | 42,783 |
| $ | 12,710 |
| $ | (36,950 | ) | $ | 167,570 |
|
11
IHS INC.
SUPPLEMENTAL INFORMATION
(In thousands, except per-share amounts)
|
| Three Months Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
| (Unaudited) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||
Net cash provided by operating activities |
| $ | 51,149 |
| $ | 52,979 |
| $ | 189,249 |
| $ | 141,737 |
|
Capital expenditures on property and equipment |
| (5,730 | ) | (4,717 | ) | (13,885 | ) | (11,890 | ) | ||||
Free cash flow |
| $ | 45,419 |
| $ | 48,262 |
| $ | 175,364 |
| $ | 129,847 |
|
|
| Three Months Ended November 30, |
| Year Ended November 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
|
| (Unaudited) |
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings per diluted share |
| $ | 0.53 |
| $ | 0.40 |
| $ | 1.57 |
| $ | 1.39 |
|
Stock-based compensation expense |
| 0.07 |
| 0.08 |
| 0.40 |
| 0.32 |
| ||||
Restructuring charge (credit) |
| (0.01 | ) | — |
| 0.13 |
| — |
| ||||
Gain on sales of assets, net |
| — |
| — |
| — |
| (0.01 | ) | ||||
Non-cash net periodic pension and post-retirement benefits |
| (0.01 | ) | (0.01 | ) | (0.05 | ) | (0.04 | ) | ||||
Adjusted earnings per diluted share |
| $ | 0.58 |
| $ | 0.47 |
| $ | 2.05 |
| $ | 1.65 |
|
Note: amounts may not sum due to rounding.
12