Good day, everyone. And welcome to the ISG 2011 Fourth Quarter Results Conference Call. Today’s conference is being recorded, and a replay will be available on ISG’s website within 24 hours. At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. Barry Holt. Please go ahead sir.

Thank you, operator. Hello, my name is Barry Holt; I am the Senior Communication Executive at ISG. I would like to wish you good morning and welcome everyone to ISG’s 2011 fourth quarter and full year results conference call. I am joined today by Michael Connors, Chairman and Chief Executive Officer, and David Berger, Executive Vice President and Chief Financial Officer. Before we begin, I would like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements, which represent the current expectations and beliefs of the management of ISG, concerning future events and their potential effects. These statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8-K that will be filed this morning with the SEC and the Risk Factors section in ISG’s Form 10-K covering full year 2010 results. You should also read ISG’s Annual Report on Form 10-K for the fiscal year ending December 31, 2010 and any other relevant documents including any amendments or supplements to these documents filed with the SEC when they become available. You will be able to obtain free copies of any of ISG’s SEC filings on either ISG’s new website at www.ISG-one.com or the SEC’s website at www.SEC.gov. ISG undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances. Non-GAAP measures are provided as additional information and should not be consider in isolation or as a substitute for financial results prepared in accordance with GAAP. For the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8-K, which will be submitted later today. And now, I would like to turn the call over to Michael Corners, who will be followed by David Berger. Mike?

Thank you, Barry and good morning everyone. Thanks for joining us. Today David and I will review the fourth quarter and full year business highlights and financial results. We will comment on our new go-to-market approach that we rolled out at the beginning of the year, highlight our ongoing commitment to increasing shareholder value; and conclude with some comments on our guidance for revenues and adjusted EBITDA for the full year 2012. I am pleased to report to you today our strong fourth quarter and full year operating results. Our full year revenues of nearly a $185 million were up 40% versus the prior year, with fourth quarter revenues of nearly $45 million up 41%. Full year adjusted EBITDA was $19 million up 18% versus the prior year, with the fourth quarter adjusted EBITDA of $5.9 million up 77% versus the prior year. As you may recall, we had a slow start to 2011, but by the second quarter we witnessed strong demand trends that continued through year end and now into 2012. We delivered on the full-year revenue and adjusted EBITDA commitments we made to you last year. Our cash position for the fourth quarter improved materially, strengthening our balance sheet. Our cash balance rose by over $7 million in the quarter to $25 million, driven by strong cash collections during the quarter. This figure includes debt payments of $1 million and share repurchases of $600,000 in the quarter. David will provide more details of those later in the call. From a geographic standpoint, Europe recorded year-over-year revenue growth of 83%, Asia-Pacific at 28% and North America recorded a growth rate of 14%, all figures in constant currency. Now during 2011, we added significant value, over 500 clients including over 200 that were new to the firm. About 80%…

Thanks Mike and good morning everyone. Before I discuss our financial results, I would like to reiterate that ISG has presented GAAP financial results, as well as certain non-GAAP financial information in our earnings release. During this call, I will discuss certain non-GAAP financial measures, which ISG believes improves the comparability of the Company’s financial results between periods and provide for greater transparency of key measures use to evaluate the Company’s performance. The non-GAAP measures I will touch on today include adjusted EBITDA, adjusted net earnings and the presentation of selected financial data on a constant currency basis. A complete reconciliation of non-GAAP financial measures is included in our earnings release, which will be furnished to the SEC on Form 8-K later this morning. Non-GAAP measures are provided as additional information and should not be consider in isolation or is a substitute for financial results prepared in accordance with GAAP. ISG reported total revenues of $44.6 million during the fourth quarter of 2011, which was up 41% versus the prior year. On a constant currency basis revenues were up 40%. For the quarter reported revenues totaled $20.7 million in the Americas, $18.1 million in Europe, and $5.8 million in Asia-Pacific. ISG reported revenues totaled $184.4 million during full year 2011, which was up 40% over 2010 results and up 35% on a constant currency basis. For the full year, reported revenues totaled $86.7 million in the Americas, $74.4 million in Europe and $23.3 million in Asia-Pacific. ISG reported an operating loss of $59.9 million in the fourth quarter of 2011, including a $61.7 million non-cash charge for the impairment of goodwill and indefinite life assets and $900,000 in acquisition-related and restructuring costs. The non-cash impairment charge resulted primarily from the drop in market capitalization of the company driven by declines…

Okay thanks. Thank you, David. We believe we have the pieces in place to achieve our vision, which is the same as in advance since ISG would found it to create an industry leading high growth information based services business. We have focused our 700 professionals on a single machine, delivering operational excellence to our clients. Clients looked us for our unique insights and innovative solutions for leveraging technology, our deep data sources, and more than 5 decades of experience in information and advisory services. Our focus on emerging technologies like cloud computing and recurring revenue opportunities such as managed services is core to our strategy, as well as our expanding geographical focus. The time and energy we invested in developing our acquisitions the merging of them into one powerful entity are now showing results and we continue to evaluate additional tuck-in opportunities as we look to expand our product and service offerings in the interest of building long-term shareholder value. As the economy and our business had become more robust, we have taken measures to further deleverage our balance sheet through share repurchases and debt repayments. And although we are not happy with our share price performance in 2011, we see early signs of that improving as it follows our business performance. We truly have harnessed the power of one. The continuing execution of our strategic business plan remains our number one priority and we believe will translate into shareholder value. Along with the continued emphasis on profitable revenue growth, we believe our financial goals are achievable. Thanks very much for calling in this morning. And now let me turn the session over to the operator for questions.

[Operator Instructions] And we’ll go first to Klaus Von Stutterheim from Deutsche Bank.

And we appreciate the tense into the stock price too. David, can you tell us, what was the DSOs for the quarter and how does that compare to the prior two quarters?

It was 75 for this quarter, which was down significantly from the prior quarters.

Right, that’s great. And then another question for your troops so the speak, what’s the turnover rate and how does it compare to the industry?

Just one of the, I think, big benefits we have as the firm going to have for a long time here. Our turnover rate is below industry standards. We tend to be in the low-to-mid teens in terms of the turnover rate and we were there again this year. We’ve gone somewhere between 9% and 16% over the last 4 or 5 years. I think industry average is significantly higher than that, and when we look at our kind of our core billable consultants and what we call our data analysts, it's even lower than that, so our turnover rate I think is in good shape, we have enough attrition to allow people to move up through the organization, and not too much.

And we’ll go next Marco Rodriguez from Stonegate Securities.

I was wondering if you could maybe perhaps provide a little bit more color in regarding to your guidance, you gave some nice commentary in terms of demand for services increases in North America having some pretty good momentum and strength in Asia. I was wondering if you could provide maybe a bit more color on the major assumptions in those categories.

Sure, let me maybe go around regionally for a second, I will start with Europe. We are very we see demand still very strong and what we call our DOC region which is anchored by Germany. France also remains quite strong, the U.K. I would say is still sluggish has been for now a couple of years in terms of the macro environment there, but the rest of Europe I think especially in the DOC region, its holding on quite strong. Asia-Pacific continues to grow. We have a great leader over there in NanoFrance [ph]. We have expanded our footprint. We are into Southeast Asia, into China in the Australia, New Zealand marketplace. Our broader portfolio that includes the analytics and the benchmarking that Compass allowed us to bring is also giving us some turbo charge over in Asia-Pacific. And then over here in the Americas, we are getting good traction you know our financial services we call it our BFFI vertical which is banking financial services and insurance is quite strong. We have a good start to the year in that industry vertical, same thing in manufacturing and auto, very strong start to the year. And then in technology and retail areas that also in the verticals here in the United States is quite strong. We also are continuing to see a good momentum with our cloud solutions. We now have a cloud component. We think it represents 20% to 30% of the engagements that we’re involved with have some element of a cloud discussion going on with the CIO or CFO. So that’s kind of where we are seeing the demand, the analytics, the benchmarking, the design work that we’re doing with strategy work to help clients better understand and navigate all the complexities of the service provider community as well as with cloud computing, mobile technology, et cetera, is all helping us drive that early kind of work around design which leads to assessments and leads to things like transactions, transition. And then we’re also finally, Marco, on the managed services business that we launched a couple of years ago that also, even though it’s a long sales cycle we’re seeing a very strong pipeline in governance services, so we continue to look at that area as an area of high demand.

Okay, great. And then in terms of the momentum you’re seeing there by region. Are you seeing at the function that your end clients are having increasing budgets or they’re bringing back what they didn’t spend during the recession?

I think it varies by region, I’ll start with Europe and I’ll talk about Europe maybe in a broad sense but I would say Europe because of the macro over hang a bit in large part, in a lot of pieces of Europe, the whole area of operational excellence and the cost reduction component, if you will, of what we do is very hot right now, because they are looking to take cost out of the businesses, concerned about the macro environment, so it plays to our strengths. Having said that, I would say the UK is still despite that being an obvious area to attack there are still some hesitancy on clients to spend in that area, but the rest of Europe is doing well. Over in Asia-Pacific there is quite the strength in the Asia markets, there is strength in the government sector over in Australia, and then over here in the U.S., I would say there is a bit of pent-up demand, number one, and then number two, I think it’s our ability to get a larger share of the client wallet. They may not be spending more dollars, but they are able to spend more dollars with us, because we have a broader array of products and services, and I think that is also is driving our strength over here in the U.S.

Great. Dave, can you just couple of housing keeping items here, utilization rate in the quarter and how do you see that kind of trending in fiscal ‘12?

Yes, it was around 67% for the year, we see that going up, as we move through the year. As our volume picks up, we are obviously, we can add headcount as we need it, but the first goal is to drive that utilization higher.

Okay, and how many consultants did you have at yearend?

Our total headcount is around 699 at the end of the year.

Okay. Then in regard to your guidance, just trying to get a little bit better of a feel for margins in SG&A, how do you kind of look at that trending maybe next quarter. And then how we should think about it as the progresses through the year.

Well, I mean we will continue to gain margin leverage as through revenue growth, so SG&A will not grow at the rate of revenue growth

And do you see gross margins your direct costs?

We see a slight improvement of gross, overall EBITDA margin over the year. Obviously with revenues growing at 6% to 8% and the EBITDA growing at 10% to 15%, we see that the bottom line growing at twice the rate of the top line

Got it. And then lastly, I was wondering if you could just maybe talk a little bit more about your capital allocation decisions here as it relates to paying down debt, stock repurchase and possible tuck-in acquisitions. How should we kind of you thinking about your process going for this year.

Well, obviously the number one use of cash will be paying down debt, so we have $7 million commitment. So that would be the primary use of cash during the year. Probably similar to the levels of what we’ve purchased in 2011, as what we would consider during 2012. And then, as Mike said, we continue to look at a number of small tuck-in acquisitions that would enhance our portfolio. Obviously, the $7 million would be the primary use of the cash flow generated for the year.

Okay. And I am sorry, last quick question in terms of just kind of housekeeping again, what was the cash flow from operations for the year in CapEx?

The CapEx for the year was $1.7 million, cash flow from operations, which you will see on our cash flow statement, will be just under $1 million, we should just point out that included in our cash flow from operations were the with the deal costs and restructuring, this year totaled, $4 million and we had the carryover of the deal costs that were accrued last year, that would pay this year, which was $2.1 million. So, I mean, you have to adjust the million with that six to be in the $7 million range on a more, when you exclude the one-time items.

[Operator Instructions] And we’ll go next to William Escamilla from William Blair and Company.

Could you address kind of where your customer concentration lies do you have many 10% customers and then how are you doing with them?

Yeah. No, we have one client that represents nearly 5% of total revenue, that’s the largest client. No others have any kind of material size if you will, that particular client has been a client for us for 13 consecutive years. We have a very good relationship with them. It’s a very large automotive client and so our strength is very good. We also, I think I mentioned to you that of the 513 clients that we had, we’ve added 200 new ones via our acquisitions and new prospects if you will during 2011 to our portfolio and about 20% of our clients are buying multiple services from us. So that means so they’ll be buying strategy, they’ll be buying niche marking, they might be buying managed services. So that’s where our client group is, just from an industry vertical standpoint, our financial services what we call BFFI, Banking Financial Services and Insurance, is kind of in the 20% plus range of our revenue. Manufacturing and auto is about 25% and the other industry verticals are represents the balance, is that helps?

Okay, and could you discuss the competitive landscape a little bit and who you’re going up against in those various things and maybe why you win?

Yeah. So on a competitive front it varies by regions, so let me take it by region, here in the U.S. the primary competitors that we have now are the big 4 and that’s the Deloittes of the world and the PWCs of the world, we still get close to 70%, 75% of our business is done either sole sourced or by a referral or repeat client. So the remaining work that we go out and compete against here in the U.S. we would tend to compete against them, we’ll compete against Gartner on the benchmarking side here in the U.S. Over in Europe, it will be a couple of the big 4 and it might be at times PA Consulting and then some smaller players’ independence kind of local or by country. And then over in Asia-Pacific, it’s primarily 1 or 2 of the big 4 that we see as our competitor upsets over there, so that’s varies a little bit, but the big 4 kind of are, or through that as they kind of dip, try to dip into our space. The reason we win, when we do compete is really primarily around 3 reasons. Number one is our information in our data. We have the deepest kind of market information. this is not survey information, this is actual information where we can see the transactions, that are going on in the marketplace and it’s reflected in our TPI index call that we have with all the analyst once core about 200 on the call, the track all the information is going on in the marketplace. So number one reason clients pick us is because of our data and market intelligence. The second reason is because of our people and the experience of our people. We do not have a large MBA crowd, we have some junior analyst some people we clearly bring up through the ranks, but our selling point is that we’ve been there, we have 20 years veterans we’ve done it over and over, we can bring the experienced hand on to you. And then the third reason, the third reason for is really reputation over the years that both Compass and STA and TPI have operated those are the three reasons starting with data than people in our reputation.

We have no further questions at this time. I’ll turn it back to you for any closing remarks.

Okay. Well, look let me just close by saying thank you joining us this morning and I also would like to thank our nearly 700 professionals around the world for their passion and dedication, for helping us operate this business. It’s really through their efforts that we feel re-poised to build on our market leadership in a year ahead. Well thank you again for your continued support and confidence and have a great day.

That concludes your call for today. Thank you for your participation.