Delaware
|
001-33812
|
13-4038723
|
||
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
88
Pine Street, New York, NY 10005
|
10005
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Exhibit No.
|
|
Description
|
Exhibit 99.1
|
|
Press
release of the Registrant dated April 9, 2008 containing financial
information for the first quarter ended February 29,
2008.
|
Exhibit
99.2
|
Press
release of the Registrant dated April 9,
2008
|
MSCI
Inc.
|
|||||
Date:
April 9, 2008
|
By:
|
/s/ Henry A.
Fernandez
|
|||
Name:
|
Henry
A. Fernandez
|
||||
Title:
|
Chief
Executive Officer, President and Chairman
|
www.mscibarra.com
|
|
·
|
Operating
revenues increased 20.5% to $105.0 million in first quarter
2008.
|
·
|
Adjusted
EBITDA increased to $47.1 million in first quarter 2008 for an adjusted
EBITDA margin of 44.9%. See Table 8 "Reconciliation of Adjusted EBITDA to
Net Income."
|
·
|
Net income
decreased 17.1% to $17.9 million ($0.18 per diluted share) in first
quarter 2008 for a net income margin of
17.1%.
|
Three Months
Ended
|
|||
February
29,
|
February
28,
|
||
Amounts in
thousands, except per share data
|
2008
|
2007
|
Change
|
Operating
revenues
|
$104,951
|
$87,069
|
20.5%
|
Operating
expenses
|
$70,261
|
$57,496
|
22.2%
|
Net
income
|
$17,934
|
$21,642
|
(17.1%)
|
%
Margin
|
17.1%
|
24.9%
|
|
Diluted
EPS
|
$0.18
|
$0.26
|
(31.0%)
|
Operating
expenses excluding founders grant1
|
$65,465
|
$57,496
|
13.9%
|
Adjusted
EBITDA2
|
$47,095
|
$36,403
|
29.4%
|
%
Margin
|
44.9%
|
41.8%
|
|
1
Excludes certain equity-based compensation (“founders grant”)
expenses of $4.8 million for the three months ended February 29, 2008 and
$0 for the three months ended February 28, 2007.
|
|||
2
See Table 8 "Reconciliation of Adjusted EBITDA to Net Income"
and information about the use of non-GAAP financial information provided
under “Notes Regarding the Use of Non-GAAP Financial
Measures.”
|
www.mscibarra.com
|
|
www.mscibarra.com
|
|
www.mscibarra.com
|
|
www.mscibarra.com
|
|
Run Rates and
Other Key Metrics
|
||||
(Year-over-Year
Comparison)
|
||||
As
of
|
||||
February
29,
|
February
28,
|
%
Change
|
||
2008
|
2007
|
Year-over-Year
|
||
Run Rates1 ($
thousands)
|
||||
Subscription
based fees
|
||||
Equity
indices
|
$154,103
|
$124,135
|
24.1%
|
|
Equity
portfolio analytics
|
131,349
|
111,604
|
17.7%
|
|
Multi-asset
class analytics
|
31,739
|
23,441
|
35.4%
|
|
Other
|
18,400
|
15,896
|
15.8%
|
|
Subscription
based fees total
|
335,591
|
275,076
|
22.0%
|
|
Asset based
fees
|
||||
Equity
indices2
|
73,358
|
52,956
|
38.5%
|
|
Hedge fund
indices
|
4,371
|
6,880
|
(36.5%)
|
|
Asset based
fees total
|
77,729
|
59,836
|
29.9%
|
|
Total Run
Rate
|
$413,320
|
$334,912
|
23.4%
|
|
Subscription
based fees - % Americas
|
44%
|
43%
|
||
Subscription
based fees - % non-Americas
|
56%
|
57%
|
||
Retention
Rate3
|
97%
|
95%
|
||
Client
Count4
|
2,980
|
2,769
|
||
ETF Assets
linked to MSCI indices ($ billions)
|
$179.2
|
$135.4
|
||
Full-time
employees
|
652
|
657
|
||
1The
run rate at a particular point in time represents the forward-looking fees
for the next 12 months from all subscriptions and investment product
licenses we currently provide to our clients under renewable contracts
assuming all contracts that come up for renewal are renewed and assuming
then-current exchange rates. For any license whose fees are linked to an
investment product’s assets or trading volume, the run rate calculation
reflects an annualization of the most recent periodic fee earned under
such license. The run rate does not include fees associated with
“one-time” and other non-recurring transactions. In addition, we remove
from the run rate the fees associated with any subscription or investment
product license agreement with respect to which we have received a notice
of termination or non-renewal at the time we receive such notice, even if
the notice is not effective until a later date.
|
||||
2Includes
transaction volume-based products, principally futures and options traded
on certain MSCI indices.
|
||||
3Our
retention rate for any period represents the percentage of the
subscription run rate as of the beginning of the period that is not
cancelled during the period. The retention rate is computed on a
product-by-product basis. Therefore, if a client reduces the number of
products to which it subscribes or switches between our products, we treat
it as a cancellation. In addition, we treat any reduction in fees
resulting from renegotiated contracts as a cancellation in the calculation
to the extent of the reduction. Retention rates are generally higher
during the first three fiscal quarters and lower in the fourth quarter.
The retention rate is for the three month periods ended February 29, 2008
and February 28, 2007, respectively.
|
||||
4The
client count excludes asset based fee clients. Our client count includes
affiliates, cities and certain business units within a single organization
as separate clients when they separately subscribe to our
products.
|
www.mscibarra.com
|
|
Run Rates and
Other Key Metrics
|
||||
(Sequential
Comparison)
|
||||
As
of
|
||||
February
29,
|
November
30,
|
%
Change
|
||
2008
|
2007
|
Quarterly
|
||
Run Rates1 ($
thousands)
|
||||
Subscription
based fees
|
||||
Equity
indices
|
$154,103
|
$143,717
|
7.2%
|
|
Equity
portfolio analytics
|
131,349
|
123,561
|
6.3%
|
|
Multi-asset
class analytics
|
31,739
|
30,638
|
3.6%
|
|
Other
|
18,400
|
17,728
|
3.8%
|
|
Subscription
based fees total
|
335,591
|
315,644
|
6.3%
|
|
Asset based
fees
|
||||
Equity
indices2
|
73,358
|
76,898
|
(4.6%)
|
|
Hedge fund
indices
|
4,371
|
4,963
|
(11.9%)
|
|
Asset based
fees total
|
77,729
|
81,861
|
(5.0%)
|
|
Total Run
Rate
|
$413,320
|
$397,505
|
4.0%
|
|
Subscription
based fees - % Americas
|
44%
|
43%
|
||
Subscription
based fees - % non-Americas
|
56%
|
57%
|
||
Retention
Rate3
|
97%
|
92%
|
||
Client
Count4
|
2,980
|
2,926
|
||
ETF Assets
linked to MSCI indices ($ billions)
|
$179.2
|
$191.7
|
||
Full-time
employees
|
652
|
637
|
||
1The
run rate at a particular point in time represents the forward-looking fees
for the next 12 months from all subscriptions and investment product
licenses we currently provide to our clients under renewable contracts
assuming all contracts that come up for renewal are renewed and assuming
then-current exchange rates. For any license whose fees are linked to an
investment product’s assets or trading volume, the run rate calculation
reflects an annualization of the most recent periodic fee earned under
such license. The run rate does not include fees associated with
“one-time” and other non-recurring transactions. In addition, we remove
from the run rate the fees associated with any subscription or investment
product license agreement with respect to which we have received a notice
of termination or non-renewal at the time we receive such notice, even if
the notice is not effective until a later date.
|
||||
2Includes
transaction volume-based products, principally futures and options traded
on certain MSCI indices.
|
||||
3Our
retention rate for any period represents the percentage of the
subscription run rate as of the beginning of the period that is not
cancelled during the period. The retention rate is computed on a
product-by-product basis. Therefore, if a client reduces the number of
products to which it subscribes or switches between our products, we treat
it as a cancellation. In addition, we treat any reduction in fees
resulting from renegotiated contracts as a cancellation in the calculation
to the extent of the reduction. Retention rates are generally higher
during the first three fiscal quarters and lower in the fourth quarter.
The retention rate is for the three month and twelve month periods ended
February 29, 2008 and November 30, 2007, respectively.
|
||||
4The
client count excludes asset based fee clients. Our client count includes
affiliates, cities and certain business units within a single organization
as separate clients when they separately subscribe to our
products.
|
www.mscibarra.com
|
|
ETF Assets
Linked to MSCI Indices
|
||||||
(Quarter-Ended)
|
||||||
2007
|
2008
|
|||||
$ in
Billions
|
February
|
May
|
August
|
November
|
February
|
|
AUM in ETFs
linked to MSCI Indices
|
$135.4
|
$150.2
|
$ 156.5
|
$191.7
|
$179.2
|
|
Sequential
Change ($ Growth in Billions)
|
||||||
Appreciation/Depreciation
|
$9.8
|
$5.9
|
$(0.8)
|
$11.2
|
$(15.2)
|
|
Cash
Inflow/Outflow
|
13.3
|
8.9
|
7.1
|
24.0
|
2.7
|
|
Total
Change
|
$23.1
|
$14.8
|
$6.3
|
$35.2
|
$(12.5)
|
|
Source:
Bloomberg
|
||||||
Note: The AUM
(assets under management) are as of
quarter-end.
|
www.mscibarra.com
|
|
www.mscibarra.com
|
|
MSCI
Inc.
|
|||
Consolidated
Statements of Income (unaudited)
|
|||
Three Months
Ended
|
|||
February
29,
|
February
28,
|
November,
30,
|
|
Amounts in
thousands, except per share data
|
2008
|
2007
|
2007
|
Operating
revenues
|
$104,951
|
$87,069
|
$101,658
|
Operating
expenses
|
|||
Cost of
services
|
31,586
|
32,266
|
29,678
|
Selling,
general and administrative
|
31,550
|
18,964
|
24,593
|
Amortization
of intangible assets
|
7,125
|
6,266
|
7,125
|
Total
operating expenses
|
70,261
|
57,496
|
61,396
|
Operating
income
|
34,690
|
29,573
|
40,262
|
Interest
income
|
2,372
|
5,062
|
1,432
|
Interest
expense
|
(8,463)
|
(95)
|
(7,730)
|
Other
income
|
136
|
27
|
137
|
Interest
income (expense) and other, net
|
(5,955)
|
4,994
|
(6,161)
|
Income before
income taxes
|
28,735
|
34,567
|
34,101
|
Provision for
income taxes
|
10,801
|
12,925
|
15,862
|
Net
income
|
$17,934
|
$21,642
|
$18,239
|
Earnings per
basic common share
|
$0.18
|
$0.26
|
$0.21
|
Earnings per
diluted common share
|
$0.18
|
$0.26
|
$0.21
|
Weighted
average shares outstanding used in computing earnings per
share
|
|||
Basic
|
100,011
|
83,900
|
86,733
|
Diluted
|
100,728
|
83,900
|
86,803
|
www.mscibarra.com
|
|
Operating
Revenues by Product Category
|
|||||
Three Months
Ended
|
Change
from
|
||||
February
29,
|
February
28,
|
November
30,
|
February
28,
|
November
30,
|
|
Amounts in
thousands
|
2008
|
2007
|
2007
|
2007
|
2007
|
Equity
indices
|
|||||
Equity index
subscriptions
|
$38,809
|
$33,154
|
$37,342
|
17.1%
|
3.9%
|
Equity index
asset based fees
|
19,588
|
13,047
|
18,680
|
50.1%
|
4.9%
|
Equity indices
total
|
58,397
|
46,201
|
56,022
|
26.4%
|
4.2%
|
Equity
portfolio analytics
|
32,342
|
29,364
|
31,625
|
10.1%
|
2.3%
|
Multi-asset
class portfolio analytics
|
7,892
|
4,283
|
7,701
|
84.3%
|
2.5%
|
Other
products
|
6,320
|
7,221
|
6,310
|
(12.5%)
|
0.2%
|
Total
operating revenues
|
$104,951
|
$87,069
|
$101,658
|
20.5%
|
3.2%
|
Operating
Expenses by Category excluding Founders Grant
|
|||
Three Months
Ended
|
|||
February
29,
|
February
28,
|
||
Amounts in
thousands
|
2008
|
2007
|
Change
|
Cost of
services
|
|||
Compensation
|
$18,938
|
$21,106
|
(10.3%)
|
Non-compensation
|
11,359
|
11,160
|
1.8%
|
Total
|
30,297
|
32,266
|
(6.1%)
|
Selling,
general and administrative
|
|||
Compensation
|
17,429
|
14,269
|
22.1%
|
Non-compensation
|
10,614
|
4,695
|
126.1%
|
Total
|
28,043
|
18,964
|
47.9%
|
Amortization
of intangible assets
|
7,125
|
6,266
|
13.7%
|
Operating
expenses excluding founders grant
|
65,465
|
57,496
|
13.9%
|
Founders
grant
|
4,796
|
-
|
-
|
Operating
expenses including founders grant
|
$70,261
|
$57,496
|
22.2%
|
www.mscibarra.com
|
|
Operating
Expenses by Category including Founders Grant
|
|||
Three Months
Ended
|
|||
February
29,
|
February
28,
|
||
Amounts in
thousands
|
2008
|
2007
|
Change
|
Cost of
services
|
|||
Compensation
|
$18,938
|
$21,106
|
(10.3%)
|
Founders
grant
|
1,289
|
-
|
-
|
Total
|
20,227
|
21,106
|
(4.2%)
|
Non-compensation
|
11,359
|
11,160
|
1.8%
|
Total
|
31,586
|
32,266
|
(2.1%)
|
Selling,
general and administrative
|
|||
Compensation
|
17,429
|
14,269
|
22.1%
|
Founders
grant
|
3,507
|
-
|
-
|
Total
|
20,936
|
14,269
|
46.7%
|
Non-compensation
|
10,614
|
4,695
|
126.1%
|
Total
|
31,550
|
18,964
|
66.4%
|
Amortization
of intangible assets
|
7,125
|
6,266
|
13.7%
|
Operating
expenses including founders grant
|
$70,261
|
$57,496
|
22.2%
|
Reconciliation
of Adjusted EBITDA to Net Income
|
|||
Three Months
Ended
|
|||
February
29,
|
February
28,
|
November
30,
|
|
Amounts in
thousands
|
2008
|
2007
|
2007
|
Adjusted
EBITDA
|
$47,095
|
$36,403
|
$48,682
|
Less: Founders
Grant expense
|
4,796
|
-
|
828
|
Less: Depreciation
and amortization
|
484
|
564
|
467
|
Less: Amortization
of intangible assets
|
7,125
|
6,266
|
7,125
|
Add: Interest
and other income (expense), net
|
(5,955)
|
4,994
|
(6,161)
|
Less: Provision
for income taxes
|
10,801
|
12,925
|
15,862
|
Net
income
|
$17,934
|
$21,642
|
$18,239
|
www.mscibarra.com
|
|
www.mscibarra.com
|
|