On November 16, 2007, ISG completed the acquisition of TPI, the largest sourcing advisory firm in the world. For the periods prior to the acquisition of TPI, ISG was a special purpose acquisition company and therefore had no operations. For periods prior to the acquisition, TPI is deemed the accounting predecessor to ISG. In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three months ended March 31, 2008 and March 31, 2007. To ensure appropriate comparability between 2007 and 2008, proforma results have been prepared for the first quarter of 2007 on the basis that the acquisition of TPI had occurred on January 1, 2007.

Operating and financial highlights for the first quarter of 2008 compared with first quarter 2007 on both a reported GAAP and proforma basis appear below.

Revenues

ISG reported revenues of $45.6 million during first quarter 2008. ISG had no reported revenue in the first quarter of 2007. On a proforma basis, ISG first quarter revenues were up $2.2 million (+5%) from $43.4 million in the first quarter of 2007. Fee revenues (revenues before reimbursable expenses) increased 5.3% year-over-year from proforma first quarter 2007 results. Revenues in the Americas were up 7% for the quarter on strong demand for sourcing transaction negotiation and renegotiation services as well as consulting and analytics. Revenues from international operations were up 3% from record first quarter 2007 performances.

Operating Income and EBITDA

Reported operating income for the first three months of 2008 was $3.9 million, up sharply (+190%) from a proforma first quarter 2007 total of $1.3 million. ISG's operating income for the first three months of 2008 was up $4.1 million from a reported operating loss of $0.2 million during the same 2007 period.

First quarter 2008 earnings before interest, taxes, depreciation, and amortization (EBITDA, a non-GAAP measure) totaled $7.0 million, an increase of approximately $3.5 million (+99%) from first quarter 2007 proforma EBITDA of $3.5 million. In the first quarter of 2007, ISG reported a negative EBITDA of $0.2 million.

Significant increases in both operating income and EBITDA for the first quarter of 2008 resulted primarily from revenue growth, higher gross margins and lower general and administrative expenses partially offset by public company related expenses which increased from $0.2 million during the first quarter of 2007 to approximately $0.8 million during the first three months of 2008.

Net Income and Earnings per Share (EPS)

Reported net income for the first quarter 2008 totaled $1.7 million, up $1.9 million from a proforma net loss of $0.2 million for the first quarter of 2007. First quarter 2008 net income increased $0.6 million from $1.1 million reported during the first quarter of 2007.

Cash EPS for the first quarter of 2008 aggregated $0.15 on a basic and fully-diluted basis compared with basic and fully-diluted proforma cash EPS of $0.04 for quarter one 2007. The nearly fourfold increase in cash EPS was principally attributable to a 99% increase in EBITDA and the impact of ISG's 2007 share repurchase program offset partially by higher income taxes.

Reported first quarter 2008 basic and fully-diluted EPS totaled $0.05. On a proforma basis, the Company generated no EPS in the first quarter of 2007. Reported first quarter 2007 basic and fully-diluted EPS totaled $0.04. ISG's first quarter 2007 reported net income and EPS was generated principally from interest income on the funds raised from the Company's initial public offering.

Other Financial Highlights

ISG cash and cash equivalents aggregated $44.4 million at March 31, 2008, a net decrease of $2.8 million from year end 2007. This decrease was principally attributable to the payment of 2007 performance based incentive awards, severance and certain acquisition related expenses as well as repurchases of ISG securities. ISG's total outstanding debt at March 31, 2008 totaled $94.7 million. During the first quarter of 2008, ISG repurchased and retired 522,000 warrants and 8,200 common shares under its ongoing share repurchase program under a $15 million authorization by its Board on November 14, 2007.

"We are extremely pleased to deliver a very strong result on almost every level in our first full quarter as an operating company," said Michael P. Connors, Chairman and CEO of ISG. "We delivered sharply higher profitability through a relentless focus on profitable revenue growth and progress toward achieving our goal of best-in-class performance levels. This improvement in profitability is allowing us to increase our investment in new products and services as well as expand our presence into new industry verticals and geographies in line with our previously announced Value Creation Plan."

"I would like to thank our more than 460 outstanding professionals for their leadership and dedication to delivering the highest possible service levels and value to our clients while successfully transitioning to a public company environment," Mr. Connors added. -- Information Services Group, Inc.