IHS Inc. IHS, the leading global source of information and analytics, today reported results for the second quarter ended May 31, 2016.
- Revenue of $588 million, up 6 percent from the prior-year period
- Total organic revenue growth of 2 percent when normalized for CERAWeek timing; reported organic revenue growth of negative 1 percent, with 1 percent subscription organic revenue growth
- Net income of $50 million and diluted earnings per share (EPS) of $0.74
- Adjusted EBITDA of $201 million and Adjusted earnings per diluted share (Adjusted EPS) of $1.60
- Cash flow from operations of $177 million; free cash flow of $148 million
Adjusted EBITDA, Adjusted EPS, and free cash flow are non-GAAP financial measures used by management to measure operating performance. These terms are defined elsewhere in this release. Please see schedules appearing later in this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.
Second Quarter and Year-to-Date 2016 Financial Performance |
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Three months ended May 31, | Change | Six months ended May 31, | Change | ||||||||||||||||||||||||||||
(in thousands, except |
2016 | 2015 | $ | % | 2016 | 2015 | $ | % | |||||||||||||||||||||||
Revenue | $ | 587,969 | $ | 556,940 | $ | 31,029 | 6 | % | $ | 1,136,415 | $ | 1,070,816 | $ | 65,599 | 6 | % | |||||||||||||||
Net income | $ | 50,102 | $ | 50,952 | $ | (850 | ) | (2 | )% | $ | 95,146 | $ | 90,472 | $ | 4,674 | 5 | % | ||||||||||||||
Adjusted EBITDA | $ | 200,798 | $ | 170,962 | $ | 29,836 | 17 | % | $ | 380,406 | $ | 330,260 | $ | 50,146 | 15 | % | |||||||||||||||
GAAP EPS | $ | 0.74 | $ | 0.74 | $ | — | — | % | $ | 1.40 | $ | 1.31 | $ | 0.09 | 7 | % | |||||||||||||||
Adjusted EPS | $ | 1.60 | $ | 1.38 | $ | 0.22 | 16 | % | $ | 2.99 | $ | 2.65 | $ | 0.34 | 13 | % | |||||||||||||||
Cash flow from operations | $ | 176,666 | $ | 146,246 | $ | 30,420 | 21 | % | $ | 328,568 | $ | 334,284 | $ | (5,716 | ) | (2 | )% | ||||||||||||||
Free cash flow | $ | 148,496 | $ | 116,020 | $ | 32,476 | 28 | % | $ | 275,908 | $ | 265,246 | $ | 10,662 | 4 | % | |||||||||||||||
"I am very pleased with how well we are managing the business given the headwinds in Energy," said Jerre Stead, IHS chairman and chief executive officer. "We are protecting our shareholders' returns during this tough operating environment through strong non-energy revenue growth and a focus on margin expansion."
"Our non-energy revenue growth continued to perform exceptionally well in Q2, and we are particularly excited about our Transportation segment due to the numerous growth drivers within our Automotive business," said Todd Hyatt, IHS chief financial officer.
Second Quarter and Year-to-Date 2016 Revenue Performance
Second quarter 2016 revenue increased 6 percent compared to the second quarter of 2015, and year-to-date 2016 revenue also increased 6 percent compared to the same period of 2015. The following table provides additional revenue information by transaction type.
Three months ended May 31, | Percent change | Six months ended May 31, | Percent change | ||||||||||||||||||||||||||
(in thousands, except |
2016 | 2015 | Total | Organic | 2016 | 2015 | Total | Organic | |||||||||||||||||||||
Subscription revenue | $ | 462,042 | $ | 441,718 | 5 | % | 1 | % | $ | 905,201 | $ | 870,982 | 4 | % | 1 | % | |||||||||||||
Non-subscription revenue | 125,927 | 115,222 | 9 | % | (6 | )% | 231,214 | 199,834 | 16 | % | 2 | % | |||||||||||||||||
Total revenue | $ | 587,969 | $ | 556,940 | 6 | % | (1 | )% | $ | 1,136,415 | $ | 1,070,816 | 6 | % | 1 | % | |||||||||||||
The components of revenue growth are described below by segment and in total.
Change in revenue | |||||||||||||||||||
Second quarter 2016 vs. second quarter 2015 | Year-to-date 2016 vs. year-to-date 2015 | ||||||||||||||||||
(All amounts represent percentage points) | Organic | Acquisitive |
Foreign
Currency |
Organic | Acquisitive |
Foreign
Currency |
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Resources | (13 | )% | 9 | % | (1 | )% | (8 | )% | 6 | % | (1 | )% | |||||||
Transportation | 12 | % | 9 | % | — | % | 11 | % | 7 | % | (1 | )% | |||||||
Consolidated Markets & Solutions | 2 | % | 2 | % | (1 | )% | 3 | % | 5 | % | (2 | )% | |||||||
Total | (1 | )% | 7 | % | (1 | )% | 1 | % | 6 | % | (1 | )% | |||||||
Second Quarter and Year-to-Date 2016 Segment Performance
Segment results were as follows:
- Resources. Second quarter revenue for Resources decreased $14 million, or 6 percent, to $221 million, and included negative 8 percent organic growth for the subscription-based business. Excluding the effect of the timing shift in our IHS Energy CERAWeek event, which generated approximately $14 million in revenue for the first quarter of 2016 but was held in our second quarter last year, total Resources revenue was unchanged for the second quarter of 2016 compared to the second quarter of 2015. Second quarter Adjusted EBITDA for Resources increased $4 million, or 4 percent, to $94 million. Second quarter operating income for Resources decreased $2 million, or 4 percent, to $62 million.
Year-to-date revenue for Resources decreased $15 million, or 3 percent, to $437 million. Year-to-date Adjusted EBITDA for Resources increased $6 million, or 3 percent, to $181 million. Year-to-date operating income for Resources increased $1 million, or 1 percent, to $121 million.
- Transportation. Second quarter revenue for Transportation increased $41 million, or 21 percent, to $231 million, and included 10 percent organic growth for the subscription-based business. Second quarter Adjusted EBITDA for Transportation increased $21 million, or 31 percent, to $91 million. Second quarter operating income for Transportation increased $13 million, or 27 percent, to $61 million.
Year-to-date revenue for Transportation increased $65 million, or 18 percent, to $431 million. Year-to-date Adjusted EBITDA for Transportation increased $32 million, or 25 percent, to $164 million. Year-to-date operating income for Transportation increased $15 million, or 17 percent, to $104 million.
- Consolidated Markets & Solutions (CMS). Second quarter revenue for CMS increased $4 million, or 3 percent, to $136 million, and included 3 percent organic growth for the subscription-based business. Second quarter Adjusted EBITDA for CMS increased $7 million, or 27 percent, to $31 million. Second quarter operating income for CMS increased $9 million, or 92 percent, to $19 million.
Year-to-date revenue for CMS increased $16 million, or 6 percent, to $269 million. Year-to-date Adjusted EBITDA for CMS increased $15 million, or 33 percent, to $58 million. Year-to-date operating income for CMS increased $19 million, or 120 percent, to $34 million.
Outlook (forward-looking statement)
For the year ending November 30, 2016, IHS expects:
- Revenue at the lower end of the previously provided range of $2.30 billion to $2.38 billion, including flat total organic growth;
- Adjusted EBITDA at the mid to upper end of the previously provided range of $770 million to $800 million; and
- Adjusted EPS at the mid to upper end of the previously provided range of $6.00 to $6.30 per diluted share.
The above outlook assumes no further currency movements, acquisitions, divestitures, pension mark-to-market adjustments or unanticipated events. See discussion of non-GAAP financial measures at the end of this release.
As previously announced, IHS will hold a conference call to discuss second quarter 2016 results on June 28, 2016, at 8:00 a.m. EDT. The conference call will be simultaneously webcast on the company's website: www.ihs.com.
Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to our financial statements based on U.S. generally accepted accounting principles (GAAP). Non-GAAP financial information is provided to enhance the reader's understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP and non-GAAP measures should not 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 EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash flow are provided within the schedules attached to this release.
We use non-GAAP measures in our operational and financial decision-making, believing that it is useful to exclude certain items in order to focus on what we deem 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, Adjusted net income, Adjusted EPS, and free cash flow metrics. We also believe 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.
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 we believe the measures provide users with valuable insight into key components of GAAP financial disclosures.
About IHS Inc. (www.ihs.com)
IHS Inc. IHS is the leading source of information, insight and analytics in critical areas that shape today's business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 33 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners.
©
2016 IHS Inc. All rights reserved.
Where To Find Additional Information
In connection with the proposed transaction, on June 6, 2016 Markit filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form F-4 that includes a joint proxy statement of IHS and Markit. IHS and Markit may also file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document which IHS or Markit may file with the SEC. INVESTORS AND SECURITY HOLDERS OF IHS and MARKIT ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of these materials and other documents filed with the SEC by IHS and Markit through the web site maintained by the SEC at www.sec.gov or by contacting the investor relations department of IHS and Markit at the following:
IHS | MARKIT | |||||||||||||
15 Inverness Way East | 4th Floor, Ropemaker Place, | |||||||||||||
Englewood, CO 80112 | 25 Ropemaker Street, London England EC2Y 9LY | |||||||||||||
Attention: Investor Relations | Attention: Investor Relations | |||||||||||||
+1 303-397-2969 | +44 20 7260 2000 | |||||||||||||
Participants in the Solicitation
IHS, Markit, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding IHS's directors and executive officers, and their direct or indirect interests in the transaction, by security holdings or otherwise, is contained in IHS's Form 10-K for the year ended November 30, 2015 and its proxy statement filed on February 24, 2016, which are filed with the SEC. Information regarding the directors and executive officers of Markit, and their direct or indirect interests in the transaction, by security holdings or otherwise, is contained in Markit's 20-F for the year ended December 31, 2015, and Markit's proxy statement filed on Form 6-K on March 27, 2015, which are filed with the SEC. A more complete description is available in the registration statement on Form F-4 and the joint proxy statement/prospectus.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the proposed transaction or to make or take any filing or other action required to consummate such transaction on a timely matter or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining shareholder or stockholder (as applicable) and regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined company's operations and other conditions to the completion of the merger, (ii) the ability of IHS and Markit to integrate the business successfully and to achieve anticipated synergies, risks and costs, (iii) potential litigation relating to the proposed transaction that could be instituted against IHS, Markit or their respective directors, (iv) the risk that disruptions from the proposed transaction will harm IHS's and Markit's business, including current plans and operations, (v) the ability of IHS or Markit to retain and hire key personnel, (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, (vii) continued availability of capital and financing and rating agency actions, (viii) legislative, regulatory and economic developments, (ix) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect IHS's and/or Markit's financial performance, (x) certain restrictions during the pendency of the merger that may impact IHS's or Markit's ability to pursue certain business opportunities or strategic transactions and (xi) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management's response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the joint proxy statement/prospectus included in the registration statement on Form F-4 filed with the SEC in connection with the proposed merger. While the list of factors presented here is, and the list of factors presented in the registration statement on Form F-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on IHS's or Markit's consolidated financial condition, results of operations, credit rating or liquidity. Neither IHS nor Markit assumes any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
IHS INC. |
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As of | As of | ||||||||
May 31, 2016 | November 30, 2015 | ||||||||
(Unaudited) | (Audited) | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 345,540 | $ | 291,580 | |||||
Accounts receivable, net | 378,026 | 355,913 | |||||||
Income tax receivable | 7,737 | 4,585 | |||||||
Deferred subscription costs | 62,481 | 52,752 | |||||||
Assets held for sale | — | 193,377 | |||||||
Other | 69,575 | 57,135 | |||||||
Total current assets | 863,359 | 955,342 | |||||||
Non-current assets: | |||||||||
Property and equipment, net | 318,451 | 314,366 | |||||||
Intangible assets, net | 1,320,421 | 1,014,691 | |||||||
Goodwill | 4,081,083 | 3,287,459 | |||||||
Deferred income taxes | 6,630 | 6,630 | |||||||
Other | 26,248 | 22,593 | |||||||
Total non-current assets | 5,752,833 | 4,645,739 | |||||||
Total assets | $ | 6,616,192 | $ | 5,601,081 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Short-term debt | $ | 473,796 | $ | 36,019 | |||||
Accounts payable | 45,399 | 59,180 | |||||||
Accrued compensation | 69,512 | 105,477 | |||||||
Accrued royalties | 34,810 | 33,306 | |||||||
Other accrued expenses | 131,271 | 118,217 | |||||||
Income tax payable | 45,498 | 23,339 | |||||||
Deferred revenue | 649,794 | 552,498 | |||||||
Liabilities held for sale | — | 32,097 | |||||||
Total current liabilities | 1,450,080 | 960,133 | |||||||
Long-term debt | 2,487,524 | 2,095,183 | |||||||
Accrued pension and postretirement liability | 25,902 | 26,745 | |||||||
Deferred income taxes | 329,838 | 259,524 | |||||||
Other liabilities | 66,906 | 58,619 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity: | |||||||||
Class A common stock, $0.01 par value per share, 160,000,000
shares authorized, |
711 | 703 | |||||||
Additional paid-in capital | 1,104,593 | 1,053,141 | |||||||
Treasury stock, at cost: 3,665,459 and 2,763,822 shares at May 31,
2016 and |
(417,199 | ) | (317,016 | ) | |||||
Retained earnings | 1,750,408 | 1,655,262 | |||||||
Accumulated other comprehensive loss | (182,571 | ) | (191,213 | ) | |||||
Total stockholders' equity | 2,255,942 | 2,200,877 | |||||||
Total liabilities and stockholders' equity | $ | 6,616,192 | $ | 5,601,081 | |||||
IHS INC. |
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Three months ended May 31, | Six months ended May 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Revenue | $ | 587,969 | $ | 556,940 | $ | 1,136,415 | $ | 1,070,816 | |||||||||
Operating expenses: | |||||||||||||||||
Cost of revenue (includes stock-based compensation expense of
$1,426; $1,444; $2,715; and $2,858 for the three and six months
ended |
212,287 | 214,858 | 423,082 | 415,203 | |||||||||||||
Selling, general and administrative (includes stock-based
compensation |
206,927 | 202,660 | 393,442 | 389,108 | |||||||||||||
Depreciation and amortization | 64,294 | 53,803 | 124,809 | 104,685 | |||||||||||||
Restructuring charges | 7,639 | 6,720 | 13,342 | 20,141 | |||||||||||||
Acquisition-related costs | 11,561 | 301 | 15,343 | 477 | |||||||||||||
Net periodic pension and postretirement expense | 406 | 497 | 813 | 993 | |||||||||||||
Other expense (income), net | (355 | ) | 1,932 | 862 | 1,094 | ||||||||||||
Total operating expenses |
502,759 | 480,771 | 971,693 | 931,701 | |||||||||||||
Operating income | 85,210 | 76,169 | 164,722 | 139,115 | |||||||||||||
Interest income | 281 | 180 | 545 | 340 | |||||||||||||
Interest expense | (27,237 | ) | (17,454 | ) | (55,377 | ) | (34,448 | ) | |||||||||
Non-operating expense, net | (26,956 | ) | (17,274 | ) | (54,832 | ) | (34,108 | ) | |||||||||
Income from continuing operations before income taxes | 58,254 | 58,895 | 109,890 | 105,007 | |||||||||||||
Provision for income taxes | (13,406 | ) | (12,222 | ) | (23,815 | ) | (20,384 | ) | |||||||||
Income from continuing operations | 44,848 | 46,673 | 86,075 | 84,623 | |||||||||||||
Income from discontinued operations, net | 5,254 | 4,279 | 9,071 | 5,849 | |||||||||||||
Net income | $ | 50,102 | $ | 50,952 | $ | 95,146 | $ | 90,472 | |||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.66 | $ | 0.68 | $ | 1.28 | $ | 1.23 | |||||||||
Income from discontinued operations, net | 0.08 | 0.06 | 0.13 | 0.09 | |||||||||||||
Net income | $ | 0.74 | $ | 0.74 | $ | 1.41 | $ | 1.32 | |||||||||
Weighted average shares used in computing basic earnings per share | 67,574 | 68,802 | 67,501 | 68,752 | |||||||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.66 | $ | 0.68 | $ | 1.27 | $ | 1.22 | |||||||||
Income from discontinued operations, net | 0.08 | 0.06 | 0.13 | 0.08 | |||||||||||||
Net income | $ | 0.74 | $ | 0.74 | $ | 1.40 | $ | 1.31 | |||||||||
Weighted average shares used in computing diluted earnings per share | 67,808 | 69,111 | 67,974 | 69,258 | |||||||||||||
IHS INC. |
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Six months ended May 31, | |||||||||
2016 | 2015 | ||||||||
Operating activities: | |||||||||
Net income | $ | 95,146 | $ | 90,472 | |||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 124,809 | 114,829 | |||||||
Stock-based compensation expense | 64,439 | 67,834 | |||||||
Gain on sale of assets | (43,255 | ) | — | ||||||
Impairment of assets | — | 1,243 | |||||||
Excess tax benefit from stock-based compensation | (60 | ) | (5,193 | ) | |||||
Net periodic pension and postretirement expense | 813 | 993 | |||||||
Pension and postretirement contributions | (1,656 | ) | (2,285 | ) | |||||
Deferred income taxes | 25,609 | (3,944 | ) | ||||||
Change in assets and liabilities: | |||||||||
Accounts receivable, net | 13,036 | 67,628 | |||||||
Other current assets | (28,829 | ) | (29,725 | ) | |||||
Accounts payable | (19,873 | ) | (7,002 | ) | |||||
Accrued expenses | (15,598 | ) | (53,476 | ) | |||||
Income tax | 24,839 | 20,242 | |||||||
Deferred revenue | 80,764 | 70,140 | |||||||
Other liabilities | 8,384 | 2,528 | |||||||
Net cash provided by operating activities | 328,568 | 334,284 | |||||||
Investing activities: | |||||||||
Capital expenditures on property and equipment | (52,660 | ) | (69,038 | ) | |||||
Acquisitions of businesses, net of cash acquired | (1,113,440 | ) | (369,908 | ) | |||||
Proceeds from sale of assets | 190,215 | — | |||||||
Change in other assets | 4,272 | (339 | ) | ||||||
Settlements of forward contracts | (4,148 | ) | 2,419 | ||||||
Net cash used in investing activities | (975,761 | ) | (436,866 | ) | |||||
Financing activities: | |||||||||
Proceeds from borrowings | 1,100,000 | 440,000 | |||||||
Repayment of borrowings | (269,882 | ) | (153,263 | ) | |||||
Payment of debt issuance costs | (15,430 | ) | — | ||||||
Excess tax benefit from stock-based compensation | 60 | 5,193 | |||||||
Repurchases of common stock | (106,015 | ) | (105,247 | ) | |||||
Net cash provided by financing activities | 708,733 | 186,683 | |||||||
Foreign exchange impact on cash balance | (9,148 | ) | (11,378 | ) | |||||
Net increase in cash and cash equivalents | 52,392 | 72,723 | |||||||
Cash and cash equivalents at the beginning of the period | 293,148 | 153,156 | |||||||
Cash and cash equivalents at the end of the period | $ | 345,540 | $ | 225,879 | |||||
IHS INC. |
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Three months ended May 31, | Percent change | Six months ended May 31, | Percent change | |||||||||||||||||||||||||||
2016 | 2015 | Total | Organic | 2016 | 2015 | Total | Organic | |||||||||||||||||||||||
Subscription revenue by segment: | ||||||||||||||||||||||||||||||
Resources | $ | 190,729 | $ | 188,824 | 1 | % | (8 | )% | $ | 371,407 | $ | 378,817 | (2 | )% | (7 | )% | ||||||||||||||
Transportation | 155,216 | 141,031 | 10 | % | 10 | % | 303,638 | 277,354 | 9 | % | 10 | % | ||||||||||||||||||
CMS | 116,097 | 111,863 | 4 | % | 3 | % | 230,156 | 214,811 | 7 | % | 4 | % | ||||||||||||||||||
Total subscription revenue | $ | 462,042 | $ | 441,718 | 5 | % | 1 | % | $ | 905,201 | $ | 870,982 | 4 | % | 1 | % | ||||||||||||||
Non-subscription revenue by segment: | ||||||||||||||||||||||||||||||
Resources | $ | 30,395 | $ | 45,849 | (34 | )% | (36 | )% | * | $ | 65,639 | $ | 73,425 | (11 | )% | (12 | )% | |||||||||||||
Transportation | $ | 75,706 | $ | 49,261 | 54 | % | 19 | % | 126,960 | 88,654 | 43 | % | 14 | % | ||||||||||||||||
CMS | $ | 19,826 | $ | 20,112 | (1 | )% | (1 | )% | 38,615 | 37,755 | 2 | % | 1 | % | ||||||||||||||||
Total non-subscription revenue | $ | 125,927 | $ | 115,222 | 9 | % | (6 | )% | * | $ | 231,214 | $ | 199,834 | 16 | % | 2 | % | |||||||||||||
Total revenue by segment: | ||||||||||||||||||||||||||||||
Resources | $ | 221,124 | $ | 234,673 | (6 | )% | (13 | )% | * | $ | 437,046 | $ | 452,242 | (3 | )% | (8 | )% | |||||||||||||
Transportation | 230,922 | 190,292 | 21 | % | 12 | % | 430,598 | 366,008 | 18 | % | 11 | % | ||||||||||||||||||
CMS | 135,923 | 131,975 | 3 | % | 2 | % | 268,771 | 252,566 | 6 | % | 3 | % | ||||||||||||||||||
Total revenue | $ | 587,969 | $ | 556,940 | 6 | % | (1 | )% | * | $ | 1,136,415 | $ | 1,070,816 | 6 | % | 1 | % | |||||||||||||
Revenue by region: | ||||||||||||||||||||||||||||||
Americas | $ | 410,955 | $ | 375,880 | 9 | % | (1 | )% | $ | 787,090 | $ | 716,710 | 10 | % | 2 | % | ||||||||||||||
EMEA | 119,189 | 128,902 | (8 | )% | (6 | )% | 238,030 | 249,545 | (5 | )% | (3 | )% | ||||||||||||||||||
APAC | 57,825 | 52,158 | 11 | % | 11 | % | 111,295 | 104,561 | 6 | % | 7 | % | ||||||||||||||||||
Total revenue | $ | 587,969 | $ | 556,940 | 6 | % | (1 | )% | $ | 1,136,415 | $ | 1,070,816 | 6 | % | 1 | % | ||||||||||||||
* Excluding the effect of the CERAWeek timing shift from the
second quarter of 2015 to the first quarter of 2016 results in the
following organic |
||||||||||||||||||||||||||||||
Resources non-subscription organic revenue growth | (5 | )% | ||||||||||||||||||||||||||||
Total non-subscription organic revenue growth | 6 | % | ||||||||||||||||||||||||||||
Resources total organic revenue growth | (7 | )% | ||||||||||||||||||||||||||||
Total organic revenue growth | 2 | % | ||||||||||||||||||||||||||||
IHS INC. |
|||||||||||||||||
Three months ended May 31, | Six months ended May 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net income | $ | 50,102 | $ | 50,952 | $ | 95,146 | $ | 90,472 | |||||||||
Interest income | (281 | ) | (180 | ) | (545 | ) | (340 | ) | |||||||||
Interest expense | 27,237 | 17,454 | 55,377 | 34,448 | |||||||||||||
Provision for income taxes | 13,406 | 12,222 | 23,815 | 20,384 | |||||||||||||
Depreciation | 24,452 | 21,048 | 47,988 | 40,845 | |||||||||||||
Amortization related to acquired intangible assets | 39,842 | 32,755 | 76,821 | 63,840 | |||||||||||||
EBITDA (1)(6) | $ | 154,758 | $ | 134,251 | $ | 298,602 | $ | 249,649 | |||||||||
Stock-based compensation expense | 32,094 | 32,726 | 62,190 | 64,599 | |||||||||||||
Restructuring charges | 7,639 | 6,720 | 13,342 | 20,141 | |||||||||||||
Acquisition-related costs | 11,561 | 301 | 15,343 | 477 | |||||||||||||
Impairment of assets | — | 1,243 | — | 1,243 | |||||||||||||
Income from discontinued operations, net | (5,254 | ) | (4,279 | ) | (9,071 | ) | (5,849 | ) | |||||||||
Adjusted EBITDA (2)(6) | $ | 200,798 | $ | 170,962 | $ | 380,406 | $ | 330,260 | |||||||||
Three months ended May 31, | Six months ended May 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net income | $ | 50,102 | $ | 50,952 | $ | 95,146 | $ | 90,472 | |||||||||
Stock-based compensation expense | 32,094 | 32,726 | 62,190 | 64,599 | |||||||||||||
Amortization related to acquired intangible assets | 39,842 | 32,755 | 76,821 | 63,840 | |||||||||||||
Restructuring charges | 7,639 | 6,720 | 13,342 | 20,141 | |||||||||||||
Acquisition-related costs | 11,561 | 301 | 15,343 | 477 | |||||||||||||
Acquisition financing fees | — | — | 4,973 | — | |||||||||||||
Impairment of assets | — | 1,243 | — | 1,243 | |||||||||||||
Income from discontinued operations, net | (5,254 | ) | (4,279 | ) | (9,071 | ) | (5,849 | ) | |||||||||
Income tax effect on adjusting items | (27,681 | ) | (25,267 | ) | (55,174 | ) | (51,538 | ) | |||||||||
Adjusted net income (3) | $ | 108,303 | $ | 95,151 | $ | 203,570 | $ | 183,385 | |||||||||
Adjusted EPS (4)(6) | $ | 1.60 | $ | 1.38 | $ | 2.99 | $ | 2.65 | |||||||||
Weighted average shares used in computing Adjusted EPS | 67,808 | 69,111 | 67,974 | 69,258 | |||||||||||||
Three months ended May 31, | Six months ended May 31, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net cash provided by operating activities | $ | 176,666 | $ | 146,246 | $ | 328,568 | $ | 334,284 | |||||||||
Capital expenditures on property and equipment | (28,170 | ) | (30,226 | ) | (52,660 | ) | (69,038 | ) | |||||||||
Free cash flow (5)(6) | $ | 148,496 | $ | 116,020 | $ | 275,908 | $ | 265,246 | |||||||||
IHS INC. |
|||||||||||||||||||||
Three months ended May 31, 2016 | |||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Total | |||||||||||||||||
Operating income | $ | 61,873 | $ | 60,540 | $ | 18,581 | $ | (55,784 | ) | $ | 85,210 | ||||||||||
Adjustments: | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 32,094 | 32,094 | ||||||||||||||||
Depreciation and amortization | 26,153 | 27,885 | 10,169 | 87 | 64,294 | ||||||||||||||||
Restructuring charges | 4,539 | 781 | 2,028 | 291 | 7,639 | ||||||||||||||||
Acquisition-related costs | 1,085 | 1,484 | (11 | ) | 9,003 | 11,561 | |||||||||||||||
Adjusted EBITDA | $ | 93,650 | $ | 90,690 | $ | 30,767 | $ | (14,309 | ) | $ | 200,798 | ||||||||||
Adjusted EBITDA as a percentage of revenue | 42.4 | % | 39.3 | % | 22.6 | % | 34.2 | % | |||||||||||||
Three months ended May 31, 2015 | |||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Total | |||||||||||||||||
Operating income | $ | 64,186 | $ | 47,833 | $ | 9,666 | $ | (45,516 | ) | $ | 76,169 | ||||||||||
Adjustments: | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 32,726 | 32,726 | ||||||||||||||||
Depreciation and amortization | 21,844 | 20,412 | 11,498 | 49 | 53,803 | ||||||||||||||||
Restructuring charges | 3,897 | 1,055 | 1,768 | — | 6,720 | ||||||||||||||||
Acquisition-related costs | — | — | — | 301 | 301 | ||||||||||||||||
Impairment of assets | — | — | 1,243 | — | 1,243 | ||||||||||||||||
Adjusted EBITDA | $ | 89,927 | $ | 69,300 | $ | 24,175 | $ | (12,440 | ) | $ | 170,962 | ||||||||||
Adjusted EBITDA as a percentage of revenue | 38.3 | % | 36.4 | % | 18.3 | % | 30.7 | % | |||||||||||||
Six months ended May 31, 2016 | |||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Total | |||||||||||||||||
Operating income | $ | 121,254 | $ | 103,595 | $ | 34,248 | $ | (94,375 | ) | $ | 164,722 | ||||||||||
Adjustments: | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 62,190 | 62,190 | ||||||||||||||||
Depreciation and amortization | 50,618 | 53,917 | 20,231 | 43 | 124,809 | ||||||||||||||||
Restructuring charges | 7,384 | 1,883 | 3,784 | 291 | 13,342 | ||||||||||||||||
Acquisition-related costs | 1,704 | 4,629 | 5 | 9,005 | 15,343 | ||||||||||||||||
Adjusted EBITDA | $ | 180,960 | $ | 164,024 | $ | 58,268 | $ | (22,846 | ) | $ | 380,406 | ||||||||||
Six months ended May 31, 2015 | |||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Total | |||||||||||||||||
Operating income | $ | 120,645 | $ | 88,472 | $ | 15,541 | $ | (85,543 | ) | $ | 139,115 | ||||||||||
Adjustments: | |||||||||||||||||||||
Stock-based compensation expense | — | — | — | 64,599 | 64,599 | ||||||||||||||||
Depreciation and amortization | 42,993 | 40,344 | 21,245 | 103 | 104,685 | ||||||||||||||||
Restructuring charges | 11,746 | 2,698 | 5,697 | — | 20,141 | ||||||||||||||||
Acquisition-related costs | — | 50 | — | 427 | 477 | ||||||||||||||||
Impairment of assets | — | — | 1,243 | — | 1,243 | ||||||||||||||||
Adjusted EBITDA | $ | 175,384 | $ | 131,564 | $ | 43,726 | $ | (20,414 | ) | $ | 330,260 | ||||||||||
(1) | EBITDA is defined as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization. | |
(2) | Adjusted EBITDA further excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs, asset impairment charges, gain or loss on sale of assets, gain or loss on debt extinguishment, pension mark-to-market and settlement expense, and income or loss from discontinued operations). All of the items included in the reconciliation from net income to Adjusted EBITDA are either non-cash items or items that we do not consider to be useful in assessing our operating performance. In the case of the non-cash items, we believe 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 excluding depreciation and amortization from EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, we believe 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. | |
(3) | Adjusted net income is defined as net income plus primarily non-cash items and other items that management does not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, amortization related to acquired intangible assets, restructuring charges, acquisition-related costs, acquisition financing fees, asset impairment charges, gain or loss on sale of assets, gain or loss on debt extinguishment, pension mark-to-market and settlement expense, and income or loss from discontinued operations, all net of the related tax effects). | |
(4) | Adjusted EPS is defined as Adjusted net income (as defined above) divided by diluted weighted average shares. | |
(5) | Free cash flow is defined as net cash provided by operating activities less capital expenditures. | |
(6) | EBITDA, Adjusted EBITDA, Adjusted EPS, and free cash flow are used by many of our investors, research analysts, investment bankers, and lenders to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our term loan and revolving credit agreements. | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160628005361/en/
IHS Inc.
News Media Contact:
Dan Wilinsky,
+1-303-397-2468
dan.wilinsky@ihs.com
or
Investor
Relations Contact:
Eric Boyer, +1-303-397-2969
eric.boyer@ihs.com
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