IHS Inc. (IHS)

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IHS Inc. (IHS)

F4Q08 Earnings Call

January 8, 2009 5:00 pm ET

Executives

Andy Schulz – Senior Director, Investor Relations

Jerre L. Stead - Chairman of the Board & Chief Executive Officer

Michael J. Sullivan - Chief Financial Officer & Executive Vice President

Jeff Tarr – President and Chief Operating Officer

Analysts

John Neff -William Blair & Company, L.L.C.

Anurag Rana – Keybanc Capital Markets

Presentation

Operator

Welcome to the quarter 4 IHS Inc. earnings conference call. My name is Wayne and I will be your operator for today. At this time all participants are in listen only mode. We will conduct a question-and-answer session toward the end of this conference. (Operator Instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Andy Schulz, Senior Director of Investor Relations.

Andy Schulz

Thank you for joining us for the IHS fourth quarter and full year 2008 earnings conference call. If you do not have the news release we issued today you will find a copy on our website at www.IHS.com.

Some of our comments and discussions on the quarter are based on non-GAAP measures. Our non-GAAP or adjusted numbers exclude stock-based compensation and other non-cash charges, net pension income, restructuring charges, gains and losses on sales of assets and other items. Our earnings release includes both our GAAP based income statement and statement of cash flows and reconciliations to the non-GAAP measures discussed during this call

These reconciliation schedules can also be found on our website. The non-GAAP results are a supplement to the GAAP financial statements. IHS believes this non-GAAP presentation and the elimination of these items is useful in order to focus on what we deem to be a more reliable indicator of ongoing operating performance. As a reminder this conference call is being recorded and webcast and is the copyright and property of IHS.

Any rebroadcasts of this information in whole or in part without the prior written consent of IHS are prohibited. The agenda for today’s call is as follows, Jerre Stead, our Chairman & CEO will provide an overview of the year and update you on our strategies including current developments regarding our integration of Global Insight; Mike Sullivan, our Executive Vice President and CFO will review the fourth quarter and full year financial results and provide an update to our outlook for fiscal 2009.

After formal comments we’ll then open the call for Q&A at which time we will be joined by Jeff Tarr, President and COO of IHS. Please keep in mind that this conference call especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ and vary materially from expectations can be found in IHS’s filings with the SEC and on the IHS website.

With that it is my pleasure to turn the call over to Jerre Stead, IHS chairman and CEO.

Jerre L. Stead

Good afternoon and happy new year to all of our investors and colleagues. Our world has certainly seen an extraordinary several months making me feel very fortunate to be here today to review the fourth quarter and full year performance of IHS, a company which has continued to deliver strong results and to create and capitalize on ever increasing opportunities for profitable growth.

On December 1st IHS kicked off its 50th anniversary year. We are building upon a strong and storied history and are very excited about the prospect of the next 50 years. We have a lot to share with you today. I’ll begin by touching briefly on our outstanding fourth quarter results, talk about what we’re doing to drive continued success in our business, followed by an update on our strategies and the progress of integration of IHS Global Insight.

First our financial results, revenue for the fourth quarter was $231 million up 17% over last year. Adjusted EBITDA increased 26% and 200 basis points to a record $64 million. Adjusted earnings per diluted share were $0.58 an increase of 23% over last year and we generated $45 million of free cash flow during the recently completed quarter. Mike will discuss our financial results in more detail.

I want to recognize the great results delivered by my IHS colleagues especially in light of the current economic climate. I thank each of you for your continued diligence in delighting customers and delivering superior performance to IHS share owners. These are very challenging times for businesses everywhere. However it is precisely in this environment that many positive features of our business model really shine. You’ve heard us discuss them before.

These attributes include critical information and insight offerings which are fundamental to the core processes of our customers, a leading position in attracted markets, an environment where no single competitor can match the depth and breadth of our offerings, a nearly 75% subscription based revenue model delivering recurring revenue and generating high levels of cash flow, a diversified and global customer base, a scalable business model with significant remaining operating leverage, clear focused strategies driving continued profitable growth and an outstanding experienced management team.

These corporate characteristics put IHS in the unique position to perform well despite the current market. Case in point we are now five weeks into our 2009 fiscal year and we continue to see solid renewals of our subscription based products. Before I move away from our key corporate characteristics this is a good time for me to once again dispel a misperception about IHS which is that there is a strong correlation between the price of oil and the performance of IHS.

Read the rest of this transcript for free on seekingalpha.com