IHS Inc. (IHS)
F2Q08 Earnings Call
June 18, 2008 5:00 pm ET
Andy Schulz – Senior Director of Investor Relations
Jerre L. Stead - Chief Executive Officer and Chairman
Michael J. Sullivan - Chief Financial Officer
Ron Mobed - Co-President and Co-Chief Operating Officer
Jeffrey R. Tarr - Co-President and Co-Chief Operating Officer
Peter Appert - Goldman Sachs
John Neff - William Blair & Company
Patrick Burton - Citigroup
Previous Statements by IHS
» IHS Inc. F3Q09 (Qtr End 08/31/09) Earnings Call Transcript
» IHS, Inc. F4Q08 (Qtr End 11/30/2008) Earnings Call Transcript
» IHS Inc. F3Q08 (Qtr End 08/31/08) Earnings Call Transcript
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, excludes stock-based compensation and other non-cash items, gains and losses on sales of assets and other items. Our earnings release includes both 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 copyrighted property of IHS. Any rebroadcast of this information in whole, or in part, without the prior written consent of IHS is prohibited.
The agenda for today’s call is as follows: Jerre Stead, our Chairman and CEO, will provide highlights of the quarter and review our strategies. Mike Sullivan, our Executive Vice President and CFO, will review the second quarter and year-to-date financial results and provide an update to our outlook for fiscal 2008. After formal comments, we’ll then open the call for Q&A, at which time we will be joined by Ron Mobed and Jeff Tarr, Co-Presidents and Co-COOs 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
Welcome to all of our investors and IHS colleagues on this call or the webcast. The second quarter of 2008 was a continuation of the strong operating and financial performance we have delivered since going public two and a half years ago. In particular, we achieved record results for revenue and adjusted EBITDA in the second quarter. I want to thank all of our colleagues for their continued hard work in delighting our customers and delivering these outstanding results for our shareowners.
Let me begin by reviewing the highlights of the quarter, first our financial results. Revenue for the second quarter was $207 million, up 34% over last year and surpassing the $200 million quarterly mark for the first time. Adjusted EBITDA increased 49%, and 260 basis points, to a record $53.0 million.
Adjusted earnings per diluted share were $0.46, an increase of 25% over last year, and we generated a record $60.0 million of free cash flow during the recently completed quarter.
We accomplished all of this while we continued to drive the business forward to achieve our vision to be the source for critical information and insight. When information and insight is mission critical to our customers achieving their business goals, we are the source they trust, rely on, and come to first. Specifically, we continue to improve our global leadership position for information and insight across four targeted domains: Energy, Product Lifecycle, Security, and Environment.
As we have stated before, our strategies to drive profitable growth are directly linked to four objectives that include committed annual targets for customer delight, colleague success, profitable top and bottom line growth, and share owner success as measured by margin improvement relative to our peer group. Consistent implementation of our strategies for profitable growth continues to create value for all of our stakeholders.
Now I will comment on our progress. Our first strategy is to put customers first in everything we do. One of the action plans for development in our customers-first initiative is new product development, and one of our IHS values is innovation. Our new commercialization process draws on these two important concepts to ensure that we successfully partner with our customers to develop the new products and services they require and to do so as quickly as possible.
One of the programs we launched in Q2 to help us with this effort is called IHS Innovate, which has been successful in capturing the knowledge and ideas of our IHS colleagues around the world. Since IHS Innovate launched nearly three months ago, colleagues around the globe have contributed hundreds of unique and innovative ideas.
We aggregate these ideas each month and follow up with internal domain experts for evaluation. Once submitted, the very best ideas become a starting point to test new product concepts with customers to determine which ones make sense for us to take to market. IHS Innovate is just one of the many ways we are working to bring the customer perspective into our new product development process.