Good day and welcome to the Information Services Group First 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 and good morning, everyone. My name is Barry Holt; I'm the Senior Communications Executive at ISG. I'd like to welcome everyone to ISG's 2013 First Quarter Results Conference Call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer; and David Berger, Executive Vice President and Chief Financial Officer. Before we begin, I'd 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 statements contained in our Form 8-K that was furnished this morning to the SEC, and the Risk Factors section in ISG's Form 10-K covering full-year 2011 results. You should also read ISG's Annual Report on Form 10-K for the fiscal year ending December 31, 2011, and any other relevant documents, including any amendments or supplements of these documents filed with the SEC when they become available. You'll be able to obtain free copies of any of ISG's SEC filings on either ISG's 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 considered 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 was submitted yesterday. And now I'd like to turn the call over to Michael Connors, who will be followed by David Berger. Mike?

Thank you, Barry, and good morning, everyone. Today, David and I will review our record first quarter results and financial highlights, update you on our recent big engagement win with the UK government, update you on our new and improved credit agreement and conclude with some comments on revenues and adjusted EBITDA for the full year. We started the year with record first quarter revenues of nearly $51 million, 10% ahead of the prior year in constant currency and a head-out consensus estimates. The accelerating global demand can be attributed to the broader set of products and services we offer, including our recurring revenue of services. Our recurring revenue streams of many services, research and the US public sector grew 30% over the prior year to $10 million. Our first quarter adjusted EBITDA was $5 million up 62% in constant currency versus the $3 million last year in the ahead of the consensus estimate, and adjusted EPS doubled to $0.06 per share. The Americas grew by 21% in the second quarter, the eighth conduct in the first quarter – the eight consecutive quarter of double-digit growth. Service area growth in the Americas was driven by managed services, transactions, and project management and growth by industry segments, including the public sector, technology and energy vertical. Client survey includes Symmex, State Farm, Marriott, PepsiCo in the states of Kansas and West Virginia. Despite Europe's sluggish macro economic climate, our EMEA region returned to growth delivering 7% revenue growth. This was driven in part by investments in the UK than we made last year. I was shortly give detail on our expansion into the UK public sector vertical. As anticipated, revenues were down $1.5 million in Asia Pacific with softness in Australia. We continue to monitor the situation, but anticipate business demand to…

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 do is certain non-GAAP financial measures, which ISG believes improves the comparability of the Company's financial results between periods, and provides or greater transparency of key measures used to evaluate the Company's performance. The non-GAAP measures, which 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 was furnished to the SEC on Form 8-K yesterday. Non-GAAP measures are provided as additional information, and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. We reported first quarter revenues of $50.6 million, which was up 10% versus the prior year in constant currency and up 9% on a reported basis. The strengthening dollar negatively impacted revenue by $200,000 in the quarter, compared to the prior year. Revenues increased by 21% in the Americas to $28.8 million, up 7% in Europe to $16.5 million, which is partially offset by $1.5 million decline in Asia Pacific to $5.3 million. Growth rates are in constant currency. Operating income totaled $2.6 million for first quarter or 2013 versus $200,000 in the prior year. Fully diluted earnings was $0.03, compared to fully diluted loss per share of $0.02 for the same period in 2012. Diluted adjusted earnings per share doubled from $0.03 to $0.06. Adjusted EBITDA of $5 million was up 62% in constant currency, compared with the $3 million reported in the first quarter of last year. We continue…

Thank you, David. We are pleased with our strong start for 2013, which gives us greater confidence in achieving our results for the year. We are also pleased that market has begun to respond positively to our results and prospects. We remain the number one go-to firm assisting with almost 70% of the advised market placing it significantly ahead of any competitor. The Americas continued on this growth trajectory with the eight straight quarters of double-digit increases. And we are pleased to see Europe return to growth from quarter. We are able to announce our big win in the UK public sector with the Ministry of Defense, which positions us well in this growing public market. Our new credit agreement has favorable terms, pushes out from maturity of our debt to May of 2018 and provides us with the flexibility to achieve our strategic objective. We are focused on creating shareholder value and we'll continue to use our cash flow this year, to repay debt, repurchase some shares and reinvest in the business. We have focused our over 800 professionals on a single mission; delivering operational excellence to our clients. Serving 40 of the top 100 firms the in the world, we believe and attest that are services are in demand. I am optimistic about our 2013 prospects in our ability to progress our long-term strategy. Thanks you very much for calling in this morning. And now, let me turn this session over to the operator.

Thank you. (Operator Instructions). And we'll take our first question from Marco Rodriguez with Stonegate Securities.

Yes. Good morning, guys. Thank you taking my questions.

Good morning Marco

Hi. I was wondering if you could talk a little bit more about the Americas growth rate; obviously a very strong growth here in Q1 on a year-over-year basis, and again, as you alluded to the last eight quarters you've had strong growth there. If I have looked at it in my math, right, it looks like average has been on the low 20% range. I'm just wondering if you can maybe provide a little more color as to what is really driving that growth rate given that the Americas is a relatively mature market for your type of business?

Sure. Thanks, Marco. We think the US is a very strong market. It's certainly mature in terms of the years that the market has been operating and using sourcing strategies, but the reason for the growth is really a couple of reasons. Number one, our recurring revenue stream focus, which includes managed services, includes research services and the public sector in the US, as I mentioned earlier, are all growing at a significant rate even above the overall Americas rate, and a lot of that growth is coming in the US market. Secondly, is that with the broader range of products and services that we now have with the acquisition of Compass, the acquisition of STA, coupled with what we did with TPI, the range of services we have to offer our CIOs and CFOs, who are our primary buyers, is a lot broader over the last couple of years than they have been previously, so we're able to penetrate and get a larger share of the wallet of the CIOs in existing client relationships, so that helps us reduce a little bit of our selling costs, but allows us to offer a fuller range of services such as our benchmarking, our analytics, our IT strategy, and business process design services. And after a transaction, we provide project management and transition services in a much higher degree than we were able – ever able to do before. So, those are the reasons and those are the drivers right now of that double-digit growth.

Okay. That's helpful. And then, to kind of follow up on that – excuse me – how should we be thinking about that growth rate, as we kind of progress through the year? And then, can you probably give us a sense as far as how much of your revenue is from the managed services or it is repeat revenue?

Well, on the recurring revenue services in the first quarter, it grew over 30% to $10 million#. Well, that's the revenue on our recurring streams for Q1. In terms of growth rates, our guidance kind of stands on its own. We don't break it down by region on terms of guidance, but we do expect that a double-digit revenue growth in the Americas, we think, could continue for most, if not, all of this year.

Perfect. And in terms of Asia-PAC, I understand that Australia is kind of impacting the growth there. What are you kind of seeing there that gives you a little bit of confidence that the second half of the year might see an improvement?

Well, one of the biggest issues there is the pullback of some of the Australian government spending. There's an election that has been called for September of this year. We have talked with all of our relationships we have within the government, so we believe that the first strings will be loosened up and added to one of the drivers. The financial sector also is a bit soft in Australia. Those are the two elements that are driving the slow down a bit, but other than that, there's no other real macro issue there. There's really no impact, even though China's a little slower growing in what they are, it is really the Australian market with government and a little bit about the financial services softness, if you will that sees itself. Our sense is that that will be a temporary thing and we will see that as a pickup.

Got it. And in the UK sector, I wonder if you could spend a little bit of time there. Obviously, you gave some commentary in terms of how you have made some investments there and started to penetrate some areas, and you've closed here that big deal that you guys were talking about the last couple of quarters. How do you kind of see that helping you guys progress into maybe more market share in the UK public sector? What – do the different areas in the UK – do they talk to each other? Do they – can you provide any sort of information in regard to that and kind of color?

Sure. The UK public sector market, first of all, it is a virgin territory for us because we had not really been able to penetrate that market until early this year. So, every kind of dollar or, if you will, pound of revenue there is incremental to us because it's a new vertical channel for us, and we have been looking to penetrate in that for some time. The government now is on a bit of an austerity program; they are looking for cost savings, they are looking operational excellence, and what we see is that once we have some credibility and qualifications, we do – they do talk across the aisle if you will across the agencies. We do believe that that's one of the reasons we're in the post office today. I think I also indicated we're also into the BBC. So, we're now into kind of three or four on-home office as well. We're in the three or four of the key agencies that are – we would consider part of the public-type sector there, and all of that revenue will be new revenue and a new revenue stream for us. So, it will gain momentum as we go through 2013, but this is something that we think will carry us for a number of years because of the credibility and qualifications that we are gaining with this foothold with these several agencies. So, that's why we're bullish on it. And the overall industry point is that public sector market in the UK is second only to the United States in terms of size and opportunity. So, penetrating that for us was pretty key and that's why we look at this as a pretty big deal for us to great (inaudible).

Got it. And do you believe or do you think that you will have to sort of prove out your services in the UK sector before the momentum starts to carry or is it just the mere fact that you signed with some pretty high-profile sections of the UK public market that will help you with that momentum?

I think it's the latter. I mean they know of our experience. I mean we’re the best in what we do in the world. And I think our key was just getting in and being able to penetrate. We're in with the great consortium on the MOD, the Ministry of Defense, and we're in our own on the home office and the post office, and the BBC, so we think that we are – that's the (sinner) of the fairway, if I can describe it that way, services that fits what we do very, very well, and we think we have a lot to offer the public-sector there.

Got it. And last question here. Just in terms of guidance, obviously, you reiterated it. A lot of your commentary is very positive, very confident in growth for 2013. Just kind of wondering if you could maybe provide a little bit more background, a little more color on your thinking as to why perhaps you didn't raise guidance.

Well, you know, we obviously have more confidence in the forecast at this point, but given the macroeconomic conditions and not really wanting to provide updates on quarterly guidance every quarter, we thought it was prudent at this point to remain – reaffirm our full-year guidance and we will re-look at it at the end of the second quarter.

Got it. All right. Thanks a lot, guys.

Thanks, Marco.

And we'll go next to Vincent Colicchio with Noble Financial.

Yes. Good morning. Nice quarter, guys.

Good morning, Vince.

On the US side, part of your index, mega contracts has seen a nice trend line. I'm wondering if that – to what extent that is helping you and what your outlook is for mega contracts going forward.

Yes. Good question. Yes. The larger contracts – we have a very, very significant market share of all of those. And early – there are several in the pipeline, and we are participating in almost all of them. So, the mega contracts, they don't come up all the time, but there's always a few every year. There's a little bit more this year. And that certainly is a share of market that we have a commanding presence on. So, yes, the mega contracts do help us for sure.

Do you expect those to be an area of strong moving – going forward?

Yes. So, over the next couple of years, there are a number of big contracts that are expected to be out there and we expect to have a bigger picture of that.

And on the managed services side, is your – having your win rates continue to be steady. If you could discuss that that would be helpful.

Yes. So, our managed services, again, over all, this is where we manage contracts on behalf of our clients. We continue to believe that that is a significant growth area for the firm. It's part of our recurring revenue streams grow significantly in the first quarter over 30%. We are working on some significant transactions for 2013. Yes. These are longer (sales) cycles. But once you have them, they are multi-year, multi-million recurring revenue streams. So, yes, we're very optimistic. We having the first market mover advantage. We have an embedded client base that no one else in the market has, and really our challenge in competition is the internal return of department from of big companies and I think we are the beginning to be able to demonstrate and educate company on the value of bringing that work over to ISG, so we remain quite strong on that piece of our growth.

And, Mike, you mentioned in – with the UK contract that you won this quarter, it could extend to a seven-year contract, do you have any sense of how large that contract could be for you? Was it simply a little more than twice the size than it is currently? If it was extended? Any thoughts there.

Yes. I don't have a number to quantify but I would say that the three years is worth $38 million. So, if it's where to go and extend beyond that to seven years, then you'd certainly would have a – another large piece of contract there. So, we're going to take it kind of one step at a time. We're in there with the team of people, working with our partners and we expect to be able to help them generate some significant savings and more efficiency and a little better quality performance as an outcome there. So, we'll continue to keep you updated on that progress.

And, David, how fast do you plan on growing the headcount this year. What was the headcount number at the end of the quarter? And should we expect (inaudible) to improve as you perhaps going forward?

Well, you know, utilization rates for this quarter were at 72%, so we were operating at a pretty high level in the quarter. During this quarter, we added, I think, 12 – a headcount of 14 and we'll probably be looking to add (826) at the end of the quarter and we will be looking to add as the business evolves.

And is that utilization rate a rate you evolve with the rest of the year? Or do you expect that to trend lower?

We target in the low 70s as the optimal, so we try to hold it at around that level.

And then, I think the last quarter you mentioned that – I think, Mike, you mentioned that revenue in the first quarter half should be about 45% of the total and at second half, 55%. But first try to want to – you want to give us your thoughts on that now?

Well, yes, I mean, look it's hard to judge historical. It's been roughly that 45%, 55%. The robustness of the first quarter and demand we are seeing as we are in the Q2, it might be more or like 50-50. It's hard to tell exactly what – so, it may be close to 50-50 this year but it's kind of on the around.

Okay. Nice quarter, guys. Thanks.

All right. Thanks a lot.

And we'll go next to Justin Ruiss with Sidoti. Justin Ruiss - Sidoti & Company: Good morning.

Good morning. Justin Ruiss - Sidoti & Company: I guess all of my questions were pretty much answered but I just wanted to know with the UK contract now in place, what percentage of your sales would you say is international at this point?

Well, I mean it's around the 50% level is where we are. Justin Ruiss - Sidoti & Company: Okay.

50% in the US. 50% outside. Justin Ruiss - Sidoti & Company: Okay. Well, that's all I need to know then.

Thanks, Justin. Yes. Be the best. Thank you very much.

And we'll take a follow-up from Marco Rodriguez with Stonegate Securities.

Hi. Real quick question here. In regards to the UK win, in kind of a consortium there of three companies, do you kind of envisioned that being the strategy going forward? Or do you think that you're seeing more wins just with you guys by yourself?

I think the very large wins you need a consortium? So, when you have a side contract close to $40 million, it's usually required the consortium. However, I would say that we are also penetrating agencies on our own and we are on our own at home at the BBC and at the post office. All of those could be of some real reasonable size, certainly seven figures. So, no, we plan to continue to penetrate our own but when there's an opportunity for a large contract, those tend to be consortiums and we will be happy to join those.

Got it. Thanks a lot, guys.

Okay. Thank you, Marco. Let me just close here by saying I want to thank all of my colleagues, 100 professionals worldwide for your passion and dedication for the outstanding performance that you delivered for the first quarter. It's really for their efforts that we are poised to build on our market leadership in the years ahead. And I want to thank all of you on the call this morning for your continued support and confidence in our firm. Have a great day.

Thank you, everyone. That does conclude today's conference. We thank you for your participation.