IHS CEO Discusses F1Q12 Results - Earnings Call Transcript

IHS Inc. ( IHS)

F1Q12 Earnings Call

March 22, 2012 8:00 a.m. ET


Andy Schultz - VP IR

Jerre Stead - CEO

Scott Key - President and COO

Richard Walker - EVP and CFO


Eric Boyer - Wells Fargo

Brian Karimzad - Goldman Sachs

Suzi Stein - Morgan Stanley

Peter Appert - Piper Jaffray

Michael Meltz - JPMorgan

Gary Krishnan - Credit Suisse

Bill Warmington - Raymond James

Daniel Leben - Robert W. Baird

Robert Riggs - William Blair



Good day, ladies and gentlemen, and welcome to the First Quarter 2012 IHS Inc. Earnings Conference Call. My name is Kim and I'll be your coordinator for today. (Operator Instructions) As a reminder, this call is being recorded.

I will now turn the call over to your host for today's conference, Mr. Andy Schultz, Vice President Investor Relations. Please proceed, sir.

Andy Schultz

Thank you, Kim. Good morning and thank you for joining us for the IHS first quarter 2012 earnings conference call. We issued two news releases and a supplemental presentation earlier this morning. If you do not have the releases and presentation we issued today, you will find copies of them on our website at 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 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 copyrighted property of IHS. Any rebroadcast of this information, in whole or in part, without the prior written consent of IHS is prohibited.

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?

Jerre Stead

Thank you, Andy, and good morning, everyone. Welcome to all of our investors and to our IHS colleagues, especially our new colleagues from Displaybank, CAPS Expert and IMS Research. There's much to share with you today, so let's get to it.

I'll start with the quarterly financial highlights. Revenue was up 17% in the first quarter. Adjusted EBITDA increased by 20%, second highest EBITDA quarter in history. And notably our adjusted EBITDA margin was 30.2%. As these metrics suggest, we are indeed tracking to our full year guidance, which we are also increasing today.

This reflects our continued view of strong performance this year. We have issued a short supplemental deck to further illustrate key elements of our revenue and profit delivery on a historical quarterly and annual basis. Scott Key, our President and Chief Operating Officer, and Richard Walker, our Executive VP and CFO, will provide more details shortly.

My many thanks to my colleagues for their hard work, diligence and performance as we are investing at the highest levels in our history. We're deploying new systems, implementing new processes and putting in place the right teams and structures as the foundation to a very bright future.

The great work our team is doing today is all about two things, delighting customers and enabling our ability to deliver sustainable, profitable growth well into the future. I believe that two to three years from now, we will look back at what we accomplished in 2012 and consider this time period as the most notable period in our company's history. For sure, the last 90 days has been a great example of this activity.

Many of the scalable platforms we have been diligently building over the past few years are being implemented and utilized across the company. Consider, this is the first time our sales force started the year with the sales force automation tool for their use. Sales force productivity gains will be realized over the next year as our colleagues gain experience with the system and learn how to optimize it.

About 40% of our business is now being processed through our Vanguard system. Given that the Vanguard project was originally conceived in 2007, we're now more than 80% of the way for its completing the foundational implementation. Perhaps most notably, IHS Connect Oil and Gas, our new workflow platform for the energy vertical market was launched January 23 and has been very positively received by our users. Designed for the strategy, planning and analysis professional, IHS Connect Oil and Gas represents the tip of the spear for new products and product enhancements that are being introduced throughout 2012.

These are important milestones for delighting customers and enabling our ability to deliver sustainable, profitable growth over the long term and there's much, much more to come in 2012.

We’re making great progress on our two major infrastructure projects, Vanguard, Newton. Our current plan calls for substantially all of our finance and lead-through cash systems to be migrated over to Vanguard by the end of 2012. This is a very important enabler to all aspects of our business and performance and future growth.

Project Newton addresses the issue of our multiple data centers and content management and delivery systems. We are making excellent progress as we eliminate redundant activities and shut down legacy data centers. These efforts are providing the path to building our capacity, lowering our incremental cost and improving our delivery systems and quality.

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

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