Information Services (III) 10-Q 7 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 28, 2017
Document and Entity Information
Entity Registrant Name	Information Services Group Inc.
Entity Central Index Key	1,371,489
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,283,630
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 25,470	$ 34,485
Accounts and unbilled receivables, net of allowance of $476 and $494, respectively	69,986	64,662
Deferred tax asset		1,730
Prepaid expense and other current assets	4,644	5,374
Total current assets	100,100	106,251
Restricted cash	89	497
Furniture, fixtures and equipment, net	4,408	4,789
Goodwill	86,162	85,940
Intangible assets, net	30,334	35,113
Other assets	4,496	2,532
Total assets	225,589	235,122
Current liabilities
Accounts payable	8,055	9,724
Current maturities of long-term debt	7,126	5,546
Deferred revenue	9,197	9,112
Accrued expenses	22,128	27,971
Total current liabilities	46,506	52,353
Long-term debt, net of current maturities	112,577	116,485
Deferred tax liability		396
Other liabilities	6,772	7,476
Total liabilities	165,855	176,710
Commitments and contingencies (Note 6)
Redeemable non-controlling interest		1,376
Stockholders' equity
Preferred stock, $.001 par value; 10,000 shares authorized; none issued
Common stock, $.001 par value, 100,000 shares authorized; 44,467 shares issued and 43,177 outstanding at June 30, 2017 and 44,203 shares issued and 42,140 outstanding at December 31, 2016	44	44
Additional paid-in capital	227,309	228,692
Treasury stock (1,290 and 2,063 common shares, respectively, at cost)	(4,577)	(8,216)
Accumulated other comprehensive loss	(6,451)	(7,800)
Accumulated deficit	(156,591)	(155,684)
Total stockholders' equity	59,734	57,036
Total liabilities, redeemable non-controlling interest and stockholders’ equity	$ 225,589	$ 235,122

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowances (in dollars)	$ 476	$ 494
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	44,467	44,203
Common stock, shares outstanding	43,177	42,140
Treasury stock, shares	1,290	2,063

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenues	$ 68,038	$ 60,354	$ 134,593	$ 110,283
Operating expenses
Direct costs and expenses for advisors	40,253	36,106	80,939	67,474
Selling, general and administrative	23,380	19,104	45,105	35,815
Depreciation and amortization	3,859	1,927	6,822	3,645
Operating income	546	3,217	1,727	3,349
Interest income	34	2	79	24
Interest expense	(1,707)	(566)	(3,416)	(994)
Foreign currency transaction (loss) gain	(101)	244	(181)	(262)
(Loss) income before taxes	(1,228)	2,897	(1,791)	2,117
Income tax (benefit) provision	(923)	1,234	(915)	1,105
Net (loss) income	(305)	1,663	(876)	1,012
Net (loss) income attributable to non-controlling interest	(3)	51	32	99
Net (loss) income attributable to ISG	$ (302)	$ 1,612	$ (908)	$ 913
Weighted average shares outstanding:
Basic (in shares)	43,058	35,609	42,687	36,475
Diluted (in shares)	43,058	36,719	42,687	37,029
(Loss) earnings per share attributable to ISG:
Basic (in dollars per share)	$ (0.01)	$ 0.05	$ (0.02)	$ 0.03
Diluted (in dollars per share)	$ (0.01)	$ 0.04	$ (0.02)	$ 0.03
Comprehensive income:
Net (loss) income	$ (305)	$ 1,663	$ (876)	$ 1,012
Foreign currency translation, net of tax (expense) benefit of $(563), $456, $(929) and $66, respectively.	678	(745)	1,349	(109)
Comprehensive income	373	918	473	903
Comprehensive (loss) income attributable to non-controlling interest	(3)	51	32	99
Comprehensive income attributable to ISG	$ 376	$ 867	$ 441	$ 804

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Foreign currency translation, net of tax benefit (expense)	$ (563)	$ 456	$ (929)	$ 66

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net (loss) income	$ (876)	$ 1,012
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense	2,071	988
Amortization of intangible assets	4,751	2,657
Tax expense from stock issuances	289	14
Amortization of deferred financing costs	510	84
Loss on sublease	578
Stock-based compensation	3,510	3,315
Change in fair value of contingent consideration		(19)
Changes in accounts receivable allowance	251	186
Deferred tax benefit	(1,860)	(965)
Loss on disposal of fixed assets	14	1
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(5,526)	(874)
Prepaid expense and other assets	995	(1,046)
Accounts payable	(1,670)	913
Deferred revenue	21	(1,483)
Debt issuance costs	(38)	198
Accrued expenses	(1,345)	1,552
Net cash provided by operating activities	1,675	6,533
Cash flows from investing activities
Acquisitions, net of cash acquired	(889)	(1,862)
Restricted cash	408	61
Purchase of furniture, fixtures and equipment	(1,479)	(1,216)
Net cash used in investing activities	(1,960)	(3,017)
Cash flows from financing activities
Proceeds from debt		13,500
Principal payments on borrowings	(2,768)	(4,288)
Proceeds from issuance of ESPP shares	306	295
Payment of contingent consideration	(2,594)	(2,483)
Payment for acquisition of Experton	(542)
Payments related to tax withholding for stock-based compensation	(1,963)	(1,182)
Debt issuance costs		9
Tax expense from stock issuances		(14)
Equity securities repurchased	(2,729)	(11,047)
Net cash used in financing activities	(10,290)	(5,210)
Effect of exchange rate changes on cash	1,560	(60)
Net decrease in cash and cash equivalents	(9,015)	(1,754)
Cash and cash equivalents, beginning of period	34,485	17,835
Cash and cash equivalents, end of period	25,470	16,081
Noncash financing activities:
Issuance of treasury stock for vested restricted stock awards	$ 5,960	$ 3,839

DESCRIPTION OF ORGANIZATION AND

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS	6 Months Ended
	Jun. 30, 2017
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS	NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Information Services Group, Inc. (the “Company”, or “ISG”) was founded in 2006 with the strategic vision to become a high-growth, leading provider of information-based advisory services. In 2007, we consummated our initial public offering and completed the acquisition of TPI Advisory Services Americas, Inc. (“TPI”). In December 2016, we consummated our transformational acquisition of Alsbridge Holdings, Inc. (“Alsbridge”).

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2017
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTE 2—BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements as of June 30, 2017 and for the three and six months ended June 30, 2017 and 2016, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are considered necessary for a fair statement of the financial position of the Company as of June 30, 2017, the results of operations for the three and six months ended June 30, 2017 and 2016 and the cash flows for the six months ended June 30, 2017 and 2016. The condensed consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited consolidated financial statements. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2016, which are included in the Company’s 2016 Annual Report on Form 10-K filed with the SEC. Reclassification Certain prior years’ amounts have been reclassified to conform to the current year’s presentation, including reclassification to the Condensed Consolidated Statements of Cash Flows due to the adoption of the share-based payment accounting standard in the first quarter of 2017 as further described below under Note 3—Summary of Significant Accounting Policies: Recently Issued Accounting Pronouncements. This reclassification had no impact on our results of operations, financial position, or changes in shareholders’ equity.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the proportional performance method of accounting affect the amounts of revenues, expenses, unbilled receivables and deferred revenue. Numerous internal and external factors can affect estimates. Estimates are also used for, but not limited to: allowance for doubtful accounts, useful lives of furniture, fixtures and equipment, depreciation expense, contingent consideration, fair value assumptions in analyzing goodwill and intangible asset impairments, income taxes and deferred tax asset valuation, and the valuation of stock based compensation. Fair Value The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, accounts payable, other current liabilities, and accrued interest approximated their fair values at June 30, 2017 and December 31, 2016 due to the short-term nature of these instruments. Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: · Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; · Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and · Level 3 measurements include those that are unobservable and of a highly subjective measure. The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated: Basis of Fair Value Measurements June 30, 2017 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 5,533 $ — $ — $ 5,533 Total $ 5,533 $ — $ — $ 5,533 Liabilities: Contingent consideration (1) $ — $ — $ 3,665 $ 3,665 Total $ — $ — $ 3,665 $ 3,665 Basis of Fair Value Measurements December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 22 $ — $ — $ 22 Total $ 22 $ — $ — $ 22 Liabilities: Contingent consideration (1) $ — $ — $ 6,073 $ 6,073 Total $ — $ — $ 6,073 $ 6,073 (1) The short-term portion is included in “Accrued expenses.” The long-term portion is included in “Other liabilities.” The Company’s contingent consideration liability was $3.7 million and $6.1 million at June 30, 2017 and December 31, 2016, respectively. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and the likelihood of the Company making payments. These cash outflow projections have then been discounted using a rate ranging from 13.5% to 19.8%. The Company’s financial instruments include outstanding borrowings of $122.5 million at June 30, 2017 and $125.3 million at December 31, 2016, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy. The fair value of the Company's outstanding borrowings is approximately $122.4 million and $124.9 million at June 30, 2017 and December 31, 2016, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 2.00% to 4.80%. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions. The following table represents the change in the contingent consideration liability during the six months ended June 30, 2017 and 2016: Six Months Ended June 30, 2017 2016 Beginning Balance $ 6,073 $ 4,019 Payment of contingent consideration (3,245) (2,483) Acquisitions — 4,634 Change in fair value of contingent consideration — (19) Accretion of contingent consideration 739 152 Unrealized gain (loss) related to currency translation 98 (40) Ending Balance $ 3,665 $ 6,263 Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that outlines a single comprehensive model for entities to use in accounting for revenue. Under the guidance, revenue is recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard is effective for public entities with annual and interim reporting periods beginning after December 15, 2016. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for annual periods beginning after December 15, 2016. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective transition method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The guidance also requires significantly expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, which we are currently compiling. We have completed an initial assessment of the impact of the guidance on our existing revenue recognition policies. We currently anticipate that we will see the most impact in contracts which include variable consideration, Network Contingency, subscription services around Robotic Process Automation, and will be adopting the standard using the cumulative catch-up transition method of adoption on January 1, 2018. The Company is currently evaluating the impact of adoption of this guidance, including required disclosures, and based upon our current analysis, does not expect a significant impact on processes, systems or controls. We will continue to evaluate the impact of our pending adoption of this guidance to our consolidated financial statements and our preliminary assessments are subject to change. In November 2015, the FASB issued an accounting standards update to simplify the presentation of deferred income taxes on the balance sheet. The update requires that all deferred tax assets and liabilities be classified as noncurrent. The current guidance that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not impacted by this update. The provisions of the new standard are effective beginning January 1, 2017, for annual and interim periods and early adoption is permitted. The Company adopted this guidance on a prospective method; therefore, prior periods were not retrospectively adjusted. As a result of this adoption, $1.5 million of net current deferred tax assets are included in the net noncurrent deferred tax assets as of June 30, 2017. The adoption of this guidance in the first quarter of 2017 by the Company did not have a material impact on its results of operations. In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The guidance requires the use of a modified retrospective approach. The Company is evaluating the impact of the guidance on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, amended guidance related to employee share-based payment accounting. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allows an employer to repurchase more of an employee’s shares than previously allowed for tax withholding purposes without triggering liability accounting, allows a company to make a policy election to account for forfeitures as they occur, and eliminates the requirement that excess tax benefits be realized before companies can recognize them. The new guidance also requires excess tax benefits and tax shortfalls to be presented on the cash flow statement as an operating activity rather than as a financing activity, and clarifies that cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation are to be presented as a financing activity. This guidance is effective prospectively for annual reporting periods, and interim periods therein, beginning after December 15, 2016. We have adopted ASU 2016-09 effective January 1, 2017 on a prospective basis as permitted by the new standard. As a result of this adoption: · Tax expenses of $0.3 million were recognized on stock-based compensation expense were reflected as a component of the provision for income taxes for the six months ended June 30, 2017. · We elected to adopt the cash flow presentation of the excess tax benefits prospectively where these benefits are classified along with other income tax cash flows as operating cash flows. · We have elected to continue to estimate the number of stock-based awards expected to vest, rather than electing to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period. · We presented employee taxes paid as a financing activity on the Condensed Consolidated Statements of Cash Flows retrospectively, as such the comparable period within the Condensed Consolidated Statements of Cash Flows has been recast to reflect the adoption. The adoption of this guidance in the first quarter of 2017 by the Company did not have a material impact on its results of operations. In August 2016, the FASB issued new guidance intended to reduce diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investees. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires application using a retrospective transition method. The Company is evaluating the impact of the guidance on its consolidated financial statements and related disclosures. In November 2016, the FASB issued an accounting standard to requires that amounts generally described as restricted cash and restricted cash equivalents be presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. If different, a reconciliation of the cash balances reported in the cash flow statement and the balance sheet would need to be provided along with explanatory information. The guidance is effective on January 1, 2018. We have started an initial assessment of the impact of the guidance, and we do not expect it will have a material impact on our consolidated financial statements. In January 2017, the FASB issued an accounting standard that changes the GAAP definition of a business which can impact the accounting for asset purchases, acquisitions, goodwill impairment, and other assessments. The guidance is effective on January 1, 2018. We are currently evaluating the impact of this guidance on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standard that eliminates Step 2 of the goodwill impairment test, which required us to determine the implied fair value of goodwill by allocating the reporting unit's fair value to each of its assets and liabilities as if the reporting unit was acquired in a business acquisition. Instead, the updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. The updated guidance is effective beginning January 1, 2020, with early adoption permitted, and will be applied on a prospective basis. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE	6 Months Ended
	Jun. 30, 2017
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE	NOTE 4—NET INCOME PER COMMON SHARE Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would share in the net income of the Company. For the three and six months ended June 30, 2017, the effect of 34,374 stock appreciation rights (“SARs”) have not been considered in the diluted earnings per share, because the market price of the stock was less than the exercise price during the period in the computation, respectively. In addition, 1.2 million and 2.5 million restricted shares have not been considered in the diluted earnings per share calculation for the three and six months ended June 30, 2017, respectively, as the effect would be anti-dilutive. The following tables set forth the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic: Net (loss) income attributable to ISG $ (302) $ 1,612 $ (908) $ 913 Weighted average common shares 43,058 35,609 42,687 36,475 (Loss) earnings per share attributable to ISG $ (0.01) $ 0.05 $ (0.02) $ 0.03 Diluted: Net (loss) income attributable to ISG $ (302) $ 1,612 $ (908) $ 913 Interest expense of convertible debt, net of tax — 9 — 23 Net (loss) income attributable to ISG, as adjusted $ (302) $ 1,621 $ (908) $ 936 Basic weighted average common shares 43,058 35,609 42,687 36,475 Potential common shares — 1,110 — 554 Diluted weighted average common shares 43,058 36,719 42,687 37,029 Diluted (loss) earnings per share attributable to ISG $ (0.01) $ 0.04 $ (0.02) $ 0.03

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2017
INCOME TAXES
INCOME TAXES	NOTE 5—INCOME TAXES The Company’s effective tax rate for the three and six months ended June 30, 2017 was (75.2)% and (51.1)% based on pretax losses of $1.2 million and $1.8 million, respectively. The Company’s effective tax rate for the quarter was greater than the statutory rate primarily due to the impact of current year overall losses on the effective tax rate computation, and the impact of current quarter losses in jurisdictions where the Company is currently precluded from recording tax benefits. The effective tax rate was 42.6% and 52.2% for the three and six months ended June 30, 2016. The difference is primarily due to the impact of current quarter losses in jurisdictions where the Company is currently precluded from recording tax benefits for the three months ended June 30, 2017. As of June 30, 2017, the Company had total unrecognized tax benefits of approximately $3.1 million all of which would impact the Company’s effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax provision in its condensed consolidated statement of operations. As of June 30, 2017, the Company’s accrual of interest and penalties amounted to $1.1 million. The Company recorded no material year-to-date change in accrual of unrecognized tax benefits and associated interest and penalties.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2017
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 6—COMMITMENTS AND CONTINGENCIES The Company is subject to contingencies which arise through the ordinary course of business. All material liabilities of which management were aware are properly reflected in the financial statements at June 30, 2017 and December 31, 2016. Saugatuck Contingent Consideration As of June 30, 2017, the Company has recorded a liability of $0.6 million representing the estimated fair value of contingent consideration related to the acquisition of Saugatuck, of which $0.3 million is classified as current and included in accrued expenses on the consolidated balance sheet. The Company paid $0.5 million in April 2017 related to 2016 performance. Experton Contingent Consideration As of June 30, 2017, the Company has recorded a liability of $0.9 million representing the estimated fair value of contingent consideration related to the acquisition of Experton, of which $0.6 million is classified as current and included in accrued expenses on the consolidated balance sheet. The Company paid $0.1 million in July 2017 related to 2016 performance. TracePoint Contingent Consideration As of June 30, 2017, the Company has recorded a liability of $2.1 million representing the estimated fair value of contingent consideration related to the acquisition of TracePoint, of which $1.1 million is classified as current and included in accrued expenses on the consolidated balance sheet. The Company paid $2.1 million in April 2017 related to 2016 performance. Alsbridge Contingent Consideration As of June 30, 2017, the Company has recorded a liability of $0.1 million representing the estimated fair value of contingent consideration related to the acquisition of Alsbridge, that is classified as current and included in accrued expenses on the consolidated balance sheet. Severance Accrual The Company recorded $1.0 million of severance expense during the three months ended June 30, 2017. The charge was primarily related to contractual termination benefits, and was recorded in selling, general and administrative expenses. As of June 30, 2017, the remaining balance in accrued severance is $0.3 million.

REDEEMABLE NON-CONTROLLING INTE

REDEEMABLE NON-CONTROLLING INTEREST	6 Months Ended
	Jun. 30, 2017
REDEEMABLE NON-CONTROLLING INTEREST
REDEEMABLE NONCONTROLLING INTEREST	NOTE 7—REDEEMABLE NON-CONTROLLING INTEREST On May 2, 2017, the minority owner of ISG Italia S.p.A. exercised his put right to sell his 49% ownership interest to a subsidiary of ISG for approximately $0.9 million, and the transaction was consummated on the same day, such that as of May 2, 2017, ISG Italia S.p.A. is a wholly-owned indirect subsidiary of ISG. The following provides a summary of activity in the non-controlling interest account for the periods ended June 30, 2017 and 2016 relating to the acquisition of Convergent Technologies Partners: June 30, 2017 2016 Beginning balance $ 1,376 $ 939 Net income attributable to non-controlling interest 32 99 Accretion attributable to non-controlling interest (30) 38 Purchase of remaining non-controlling interest (1,377) — Impact of currency translation (1) — Ending balance $ — $ 1,076

SEGMENT AND GEOGRAPHICAL INFORM

SEGMENT AND GEOGRAPHICAL INFORMATION	6 Months Ended
	Jun. 30, 2017
SEGMENT AND GEOGRAPHICAL INFORMATION
SEGMENT AND GEOGRAPHICAL INFORMATION	NOTE 8—SEGMENT AND GEOGRAPHICAL INFORMATION The Company operates as one reportable segment consisting primarily of fact-based sourcing advisory services. The Company operates principally in the Americas, Europe and Asia Pacific. Geographical revenue information for the segment is as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Revenues Americas $ 39,952 $ 31,671 $ 81,057 $ 57,593 Europe 21,504 21,221 41,711 40,274 Asia Pacific 6,582 7,462 11,825 12,416 $ 68,038 $ 60,354 $ 134,593 $ 110,283 The segregation of revenues by geographic region is based upon the location of the legal entity performing the services. The Company does not measure or monitor gross profit or operating income by geography for the purposes of making operating decisions or allocating resources.

FINANCING ARRANGEMENTS AND LONG

FINANCING ARRANGEMENTS AND LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2017
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
FINANCING ARRANGEMENTS AND LONG-TERM DEBT	NOTE 9—FINANCING ARRANGEMENTS AND LONG-TERM DEBT On December 1, 2016, the Company entered into an amended and restated senior secured credit facility (the “2016 Credit Agreement”) comprised of a $110.0 million term facility and a $30.0 million revolving facility, amending and restating its senior secured credit facility originally entered into on May 3, 2013. The material terms of the 2016 Credit Agreement are as follows: · Each of the term loan facility and revolving credit facility has a maturity date of December 1, 2021 (the “Maturity Date”). · The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets. · The Company’s direct and indirect existing and future wholly-owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility. · At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar Rate, plus 1.0%), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin. The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio. Prior to the end of the first full quarter following the closing of the credit facility, the applicable margin shall be a percentage per annum equal to 2.5% for the term loans and the revolving loans maintained as Base Rate loans or 3.5% for the term loans and revolving loans maintained as Eurodollar loans. · The Term Loan is repayable in four consecutive quarterly installments of $1,375,000 each, commencing March 31, 2017, followed by eight consecutive quarterly installments in the amount of $2,062,500 each, commencing March 31, 2018, followed by seven consecutive quarterly installments of $2,750,000 each, commencing March 31, 2020 and a final payment of the remaining outstanding principal amount of the Term Loan on the Maturity Date. · Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100% of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100% of the net proceeds from issuances of debt and equity by the Company and its subsidiaries, and (iii) 100% of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries. · The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transaction with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business. In addition, the Company is required to comply with a total leverage ratio and fixed charge coverage ratio. · The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control. On February 10, 2017, as required by the 2016 Credit Agreement, the Company entered into an agreement to cap the interest rate at 4% on the LIBOR component of its borrowings under the term loan facility until December 31, 2019. This interest rate cap was not designated for hedging or speculative purposes. The expense related to this interest rate cap was not material. As of June 30, 2017, the total principal outstanding under the term loan facility and revolving credit facility was $107.3 million and $8.0 million, respectively. Compass Convertible Notes On January 4, 2011, as part of the consideration for the acquisition of Compass, we issued an aggregate of $6.3 million in convertible notes to Compass (the “Compass Notes”). The Compass Notes mature on January 4, 2018 and interest is payable on the outstanding principal amount, computed daily, at the rate of 3.875% per annum on January 31 of each calendar year and on the seventh anniversary of the date of the Compass Notes. The Compass Notes were subject to transfer restrictions until January 31, 2013. If the price of our common stock on the Nasdaq Global Market exceeds $4 per share for 60 consecutive trading days (the “Trigger Event”), the holder of the Compass Notes may convert all (but not less than all) of the outstanding principal amount of the Compass Notes into shares of our common stock at the rate of 1 share for every $4 in principal amount outstanding. After the Trigger Event, we may prepay all or any portion of the outstanding principal amount of the Compass Notes by giving the holder 30 days written notice. On March 21, 2014, the Trigger Event occurred. As a result, a holder of the Compass Notes may convert all (but not less than all) of the outstanding principal amount of the Compass Notes into shares of our common stock at the rate of 1 share for every $4 in principal amount outstanding. In addition, ISG may elect to prepay all or any portion of the outstanding principal amount of the Compass Notes by giving a holder 30 days written notice; however, such holder shall be given the opportunity to convert the outstanding principal amount into shares as described above. No holder of the Compass Notes has the option to require cash payment as a result of the Trigger Event, hence the Compass Notes are classified as non-current. In 2013 and 2016, we prepaid substantial portions of the outstanding principal amount of the Compass Notes. As of June 30, 2017, the total principal outstanding under the remaining Compass Notes was $0.2 million. Alsbridge Notes On December 1, 2016, as part of the merger consideration for the acquisition of Alsbridge, we issued an aggregate of $7.0 million in unsecured subordinated promissory notes (the “Alsbridge Notes”). The Alsbridge Notes mature on September 1, 2018 and interest accrues on the principal amount daily at a rate of 2.0% and is payable upon maturity. At any time, the Company may at its option prepay all or any portion of Alsbridge Notes. As of June 30, 2017, the total principal outstanding under the Alsbridge Notes was $7.0 million.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results may differ from those estimates. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the proportional performance method of accounting affect the amounts of revenues, expenses, unbilled receivables and deferred revenue. Numerous internal and external factors can affect estimates. Estimates are also used for, but not limited to: allowance for doubtful accounts, useful lives of furniture, fixtures and equipment, depreciation expense, contingent consideration, fair value assumptions in analyzing goodwill and intangible asset impairments, income taxes and deferred tax asset valuation, and the valuation of stock based compensation.
Fair Value	Fair Value The carrying value of the Company’s cash and cash equivalents, restricted cash, receivables, accounts payable, other current liabilities, and accrued interest approximated their fair values at June 30, 2017 and December 31, 2016 due to the short-term nature of these instruments. Fair value is the price that would be received upon a sale of an asset or paid upon a transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). Market participants can use market data or assumptions in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. Under the fair-value hierarchy: · Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; · Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and · Level 3 measurements include those that are unobservable and of a highly subjective measure. The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated: Basis of Fair Value Measurements June 30, 2017 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 5,533 $ — $ — $ 5,533 Total $ 5,533 $ — $ — $ 5,533 Liabilities: Contingent consideration (1) $ — $ — $ 3,665 $ 3,665 Total $ — $ — $ 3,665 $ 3,665 Basis of Fair Value Measurements December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 22 $ — $ — $ 22 Total $ 22 $ — $ — $ 22 Liabilities: Contingent consideration (1) $ — $ — $ 6,073 $ 6,073 Total $ — $ — $ 6,073 $ 6,073 (1) The short-term portion is included in “Accrued expenses.” The long-term portion is included in “Other liabilities.” The Company’s contingent consideration liability was $3.7 million and $6.1 million at June 30, 2017 and December 31, 2016, respectively. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and the likelihood of the Company making payments. These cash outflow projections have then been discounted using a rate ranging from 13.5% to 19.8%. The Company’s financial instruments include outstanding borrowings of $122.5 million at June 30, 2017 and $125.3 million at December 31, 2016, which are carried at amortized cost. The fair value of debt is classified within Level 3 of the fair value hierarchy. The fair value of the Company's outstanding borrowings is approximately $122.4 million and $124.9 million at June 30, 2017 and December 31, 2016, respectively. The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements. The incremental borrowing rate used to discount future cash flows ranged from 2.00% to 4.80%. The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions. The following table represents the change in the contingent consideration liability during the six months ended June 30, 2017 and 2016: Six Months Ended June 30, 2017 2016 Beginning Balance $ 6,073 $ 4,019 Payment of contingent consideration (3,245) (2,483) Acquisitions — 4,634 Change in fair value of contingent consideration — (19) Accretion of contingent consideration 739 152 Unrealized gain (loss) related to currency translation 98 (40) Ending Balance $ 3,665 $ 6,263
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that outlines a single comprehensive model for entities to use in accounting for revenue. Under the guidance, revenue is recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard is effective for public entities with annual and interim reporting periods beginning after December 15, 2016. On July 9, 2015, the FASB approved the deferral of the effective date of the new revenue guidance by one year to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for annual periods beginning after December 15, 2016. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective transition method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The guidance also requires significantly expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, which we are currently compiling. We have completed an initial assessment of the impact of the guidance on our existing revenue recognition policies. We currently anticipate that we will see the most impact in contracts which include variable consideration, Network Contingency, subscription services around Robotic Process Automation, and will be adopting the standard using the cumulative catch-up transition method of adoption on January 1, 2018. The Company is currently evaluating the impact of adoption of this guidance, including required disclosures, and based upon our current analysis, does not expect a significant impact on processes, systems or controls. We will continue to evaluate the impact of our pending adoption of this guidance to our consolidated financial statements and our preliminary assessments are subject to change. In November 2015, the FASB issued an accounting standards update to simplify the presentation of deferred income taxes on the balance sheet. The update requires that all deferred tax assets and liabilities be classified as noncurrent. The current guidance that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not impacted by this update. The provisions of the new standard are effective beginning January 1, 2017, for annual and interim periods and early adoption is permitted. The Company adopted this guidance on a prospective method; therefore, prior periods were not retrospectively adjusted. As a result of this adoption, $1.5 million of net current deferred tax assets are included in the net noncurrent deferred tax assets as of June 30, 2017. The adoption of this guidance in the first quarter of 2017 by the Company did not have a material impact on its results of operations. In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The guidance requires the use of a modified retrospective approach. The Company is evaluating the impact of the guidance on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, amended guidance related to employee share-based payment accounting. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, allows an employer to repurchase more of an employee’s shares than previously allowed for tax withholding purposes without triggering liability accounting, allows a company to make a policy election to account for forfeitures as they occur, and eliminates the requirement that excess tax benefits be realized before companies can recognize them. The new guidance also requires excess tax benefits and tax shortfalls to be presented on the cash flow statement as an operating activity rather than as a financing activity, and clarifies that cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation are to be presented as a financing activity. This guidance is effective prospectively for annual reporting periods, and interim periods therein, beginning after December 15, 2016. We have adopted ASU 2016-09 effective January 1, 2017 on a prospective basis as permitted by the new standard. As a result of this adoption: · Tax expenses of $0.3 million were recognized on stock-based compensation expense were reflected as a component of the provision for income taxes for the six months ended June 30, 2017. · We elected to adopt the cash flow presentation of the excess tax benefits prospectively where these benefits are classified along with other income tax cash flows as operating cash flows. · We have elected to continue to estimate the number of stock-based awards expected to vest, rather than electing to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period. · We presented employee taxes paid as a financing activity on the Condensed Consolidated Statements of Cash Flows retrospectively, as such the comparable period within the Condensed Consolidated Statements of Cash Flows has been recast to reflect the adoption. The adoption of this guidance in the first quarter of 2017 by the Company did not have a material impact on its results of operations. In August 2016, the FASB issued new guidance intended to reduce diversity in practice in how certain cash receipts and payments are classified in the statement of cash flows, including debt prepayment or extinguishment costs, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, and distributions from certain equity method investees. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires application using a retrospective transition method. The Company is evaluating the impact of the guidance on its consolidated financial statements and related disclosures. In November 2016, the FASB issued an accounting standard to requires that amounts generally described as restricted cash and restricted cash equivalents be presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. If different, a reconciliation of the cash balances reported in the cash flow statement and the balance sheet would need to be provided along with explanatory information. The guidance is effective on January 1, 2018. We have started an initial assessment of the impact of the guidance, and we do not expect it will have a material impact on our consolidated financial statements. In January 2017, the FASB issued an accounting standard that changes the GAAP definition of a business which can impact the accounting for asset purchases, acquisitions, goodwill impairment, and other assessments. The guidance is effective on January 1, 2018. We are currently evaluating the impact of this guidance on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standard that eliminates Step 2 of the goodwill impairment test, which required us to determine the implied fair value of goodwill by allocating the reporting unit's fair value to each of its assets and liabilities as if the reporting unit was acquired in a business acquisition. Instead, the updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit's fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. The updated guidance is effective beginning January 1, 2020, with early adoption permitted, and will be applied on a prospective basis. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of assets and liabilities measured at fair value on a recurring basis	Basis of Fair Value Measurements June 30, 2017 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 5,533 $ — $ — $ 5,533 Total $ 5,533 $ — $ — $ 5,533 Liabilities: Contingent consideration (1) $ — $ — $ 3,665 $ 3,665 Total $ — $ — $ 3,665 $ 3,665 Basis of Fair Value Measurements December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 22 $ — $ — $ 22 Total $ 22 $ — $ — $ 22 Liabilities: Contingent consideration (1) $ — $ — $ 6,073 $ 6,073 Total $ — $ — $ 6,073 $ 6,073 (1) The short-term portion is included in “Accrued expenses.” The long-term portion is included in “Other liabilities.”
Schedule of change in the contingent consideration liability	Six Months Ended June 30, 2017 2016 Beginning Balance $ 6,073 $ 4,019 Payment of contingent consideration (3,245) (2,483) Acquisitions — 4,634 Change in fair value of contingent consideration — (19) Accretion of contingent consideration 739 152 Unrealized gain (loss) related to currency translation 98 (40) Ending Balance $ 3,665 $ 6,263

NET INCOME PER COMMON SHARE (Ta

NET INCOME PER COMMON SHARE (Tables)	6 Months Ended
	Jun. 30, 2017
NET INCOME PER COMMON SHARE
Schedule of computation of basic and diluted earnings per share	Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic: Net (loss) income attributable to ISG $ (302) $ 1,612 $ (908) $ 913 Weighted average common shares 43,058 35,609 42,687 36,475 (Loss) earnings per share attributable to ISG $ (0.01) $ 0.05 $ (0.02) $ 0.03 Diluted: Net (loss) income attributable to ISG $ (302) $ 1,612 $ (908) $ 913 Interest expense of convertible debt, net of tax — 9 — 23 Net (loss) income attributable to ISG, as adjusted $ (302) $ 1,621 $ (908) $ 936 Basic weighted average common shares 43,058 35,609 42,687 36,475 Potential common shares — 1,110 — 554 Diluted weighted average common shares 43,058 36,719 42,687 37,029 Diluted (loss) earnings per share attributable to ISG $ (0.01) $ 0.04 $ (0.02) $ 0.03

REDEEMABLE NON-CONTROLLING IN19

REDEEMABLE NON-CONTROLLING INTEREST (Tables)	6 Months Ended
	Jun. 30, 2017
REDEEMABLE NON-CONTROLLING INTEREST
Schedules of summary of activity in the non-controlling interest	June 30, 2017 2016 Beginning balance $ 1,376 $ 939 Net income attributable to non-controlling interest 32 99 Accretion attributable to non-controlling interest (30) 38 Purchase of remaining non-controlling interest (1,377) — Impact of currency translation (1) — Ending balance $ — $ 1,076

SEGMENT AND GEOGRAPHICAL INFO20

SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2017
SEGMENT AND GEOGRAPHICAL INFORMATION
Schedule of geographical revenue information for the segment	Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Revenues Americas $ 39,952 $ 31,671 $ 81,057 $ 57,593 Europe 21,504 21,221 41,711 40,274 Asia Pacific 6,582 7,462 11,825 12,416 $ 68,038 $ 60,354 $ 134,593 $ 110,283

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Liabilities:
Long term debt	$ 122,500		$ 125,300
Change in the contingent consideration liability
Beginning Balance	6,073	$ 4,019
Payment of contingent consideration	(3,245)	(2,483)
Acquisitions		4,634
Change in fair value of contingent consideration		(19)
Accretion of contingent consideration	739	152
Unrealized gain (loss) related to currency translation	98	(40)
Ending Balance	$ 3,665	$ 6,263
Minimum
Liabilities:
Discounted rate of cash outflow projections (as a percent)	13.50%
Incremental borrowing rate used to discount future cash flows from financial instruments (as a percent)	2.00%
Maximum
Liabilities:
Discounted rate of cash outflow projections (as a percent)	19.80%
Incremental borrowing rate used to discount future cash flows from financial instruments (as a percent)	4.80%
Level 3
Liabilities:
Fair value of outstanding borrowing	$ 122,400		124,900
Recurring
Assets:
Cash equivalents	5,533		22
Total	5,533		22
Liabilities:
Contingent consideration	3,665		6,073
Total	3,665
Recurring | Level 1
Assets:
Cash equivalents	5,533		22
Total	5,533		22
Recurring | Level 3
Liabilities:
Contingent consideration	3,665		$ 6,073
Total	$ 3,665

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Recently Issued Accounting Pronouncements
Provision for income taxes	$ (923)	$ 1,234	$ (915)	$ 1,105
Deferred Tax Assets, Net, Current					$ 1,730
ASU 2015-17
Recently Issued Accounting Pronouncements
Deferred Tax Assets, Net, Current	(1,500)		(1,500)
Deferred Tax Assets, Net, Noncurrent	$ 1,500		1,500
ASU 2016-09
Recently Issued Accounting Pronouncements
Provision for income taxes			$ 300

NET INCOME PER COMMON SHARE - A

NET INCOME PER COMMON SHARE - Antidilutive Securities (Details) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Stock Appreciation Rights S A R S
Antidilutive securities
Securities considered antidilutive (in shares)	34,374	34,374
Restricted Stock
Antidilutive securities
Securities considered antidilutive (in shares)	1,200,000	2,500,000

NET INCOME PER COMMON SHARE - C

NET INCOME PER COMMON SHARE - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Basic:
Net (loss) income attributable to ISG	$ (302)	$ 1,612	$ (908)	$ 913
Weighted average common shares	43,058	35,609	42,687	36,475
(Loss) earnings per share attributable to ISG	$ (0.01)	$ 0.05	$ (0.02)	$ 0.03
Diluted:
Net (loss) income attributable to ISG	$ (302)	$ 1,612	$ (908)	$ 913
Interest expense of convertible debt, net of tax		9		23
Net (loss) income attributable to ISG, as adjusted	$ (302)	$ 1,621	$ (908)	$ 936
Basic Weighted Average Common shares	43,058	35,609	42,687	36,475
Potential common shares		1,110		554
Diluted weighted average common shares	43,058	36,719	42,687	37,029
Diluted (loss) earnings per share attributable to ISG	$ (0.01)	$ 0.04	$ (0.02)	$ 0.03

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
INCOME TAXES
Effective income tax rates (as a percent)	(75.20%)	42.60%	(51.10%)	52.20%
Pretax loss	$ 1,228	$ (2,897)	$ 1,791	$ (2,117)
Unrecognized tax benefits	3,100		3,100
Unrecognized tax benefits that would impact the company's effective tax rate	3,100		3,100
Interest and penalties accrued	$ 1,100		$ 1,100

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Apr. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Contingent Consideration
Contingent acquisition liability	$ 3,665	$ 3,665		$ 6,073	$ 6,263	$ 4,019
Severance Costs		300
Selling, general and administrative
Contingent Consideration
Severance Costs	1,000
Saugatuck Technology Inc.
Contingent Consideration
Contingent acquisition liability	600	600
Amount paid for contingent consideration			$ 500
Saugatuck Technology Inc. | Accrued expenses
Contingent Consideration
Contingent consideration classified as current	300	300
Experton Group
Contingent Consideration
Contingent acquisition liability	900	900
Amount expected to be paid in the second quarter of 2017 related to 2016 performance	100	100
Experton Group | Accrued expenses
Contingent Consideration
Contingent consideration classified as current	600	600
TracePoint
Contingent Consideration
Contingent acquisition liability	2,100	2,100
Amount paid for contingent consideration	2,100	2,100
TracePoint | Accrued expenses
Contingent Consideration
Contingent consideration classified as current	1,100	1,100
Alsbridge | Accrued expenses
Contingent Consideration
Contingent acquisition liability	$ 100	$ 100

REDEEMABLE NON-CONTROLLING IN27

REDEEMABLE NON-CONTROLLING INTEREST (Details) - USD ($) $ in Thousands	May 02, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net income attributable to non-controlling interest		$ (3)	$ 51	$ 32	$ 99
Convergent Technologies Partners SPA
Beginning balance				1,376	939
Net income attributable to non-controlling interest				32	99
Accretion attributable to non-controlling interest				(30)	38
Purchase of remaining no-ncontrolling interest				(1,377)
Impact of currency translation				$ (1)
Ending balance			$ 1,076		$ 1,076
ISG Italia S.p.A.
Ownership interest (as a percentage)	49.00%
Ownership interest	$ 900

SEGMENT AND GEOGRAPHICAL INFO28

SEGMENT AND GEOGRAPHICAL INFORMATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)segment	Jun. 30, 2016USD ($)
Segment and geographical information
Number of segments | segment			1
Revenues	$ 68,038	$ 60,354	$ 134,593	$ 110,283
Americas
Segment and geographical information
Revenues	39,952	31,671	81,057	57,593
Europe
Segment and geographical information
Revenues	21,504	21,221	41,711	40,274
Asia Pacific
Segment and geographical information
Revenues	$ 6,582	$ 7,462	$ 11,825	$ 12,416

FINANCING ARRANGEMENTS AND LO29

FINANCING ARRANGEMENTS AND LONG-TERM DEBT - Narrative (Details) - Credit Agreement 2016	Mar. 31, 2020USD ($)installment	Mar. 31, 2018USD ($)installment	Mar. 31, 2017USD ($)installment	Jun. 30, 2017USD ($)	Dec. 01, 2016USD ($)
Base Rate
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Interest rate basis				Base Rate
Eurodollar
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Interest rate basis				Eurodollar Rate
Applicable margin (as a percent)				1.00%
Prime Rate
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Interest rate basis				prime rate
Federal Funds Rate
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Interest rate basis				Federal Funds Rate
Applicable margin (as a percent)				0.50%
Secured Debt
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Maximum borrowing capacity under senior secured credit facility					$ 110,000,000
Outstanding borrowings				$ 107,300,000
Number of quarterly installments | installment			4
Periodic repayment			$ 1,375,000
Percentage of proceeds from asset sales used for mandatory repayments of the debt				100.00%
Percentage of net proceeds from issuances of debt and equity used for mandatory repayments of the debt				100.00%
Percentage of net proceeds from insurance recovery and condemnation events used for mandatory repayments of the debt				100.00%
Secured Debt | Scenario Forecast
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Number of quarterly installments | installment	7	8
Periodic repayment	$ 2,750,000	$ 2,062,500
Secured Debt | London Interbank Offered Rate L I B O R
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Interest rate basis				LIBOR
Secured Debt | Base Rate
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Applicable margin (as a percent)				2.50%
Revolving Credit Facility
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Maximum borrowing capacity under senior secured credit facility					$ 30,000,000
Outstanding borrowings				$ 8,000,000
Revolving Credit Facility | Eurodollar
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Applicable margin (as a percent)				3.50%
Maximum | Secured Debt | London Interbank Offered Rate L I B O R
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Applicable margin (as a percent)				4.00%

FINANCING ARRANGEMENTS AND LO30

FINANCING ARRANGEMENTS AND LONG-TERM DEBT - Compass Convertible Notes (Details) $ / shares in Units, $ in Thousands	Jan. 04, 2011USD ($)$ / shares	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Issuance of debt		$ 13,500
Amount outstanding			$ 122,500	$ 125,300
C C G H Limited | Convertible Notes Payable
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Issuance of debt	$ 6,300
Rate of interest (as a percent)	3.875%
Trigger event condition related to number of consecutive trading days on which market price of common stock exceeds $4 per share on the Nasdaq Global Market	60 days
Conversion rate	0.25
Written notice period after trigger event, that company need to serve for prepayment of all or portion of the outstanding principal amount of the Notes	30 days
Amount outstanding			200
Alsbridge | Note payable
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Rate of interest (as a percent)				2.00%
Amount outstanding			$ 7,000
Debt, face amount				$ 7,000
Minimum | C C G H Limited | Convertible Notes Payable
FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Trigger Event condition related to minimum market price of common stock on the Nasdaq Global market (in dollars per share) | $ / shares	$ 4