This is a summary of the first quarter fiscal 2008 earnings call conducted by FactSet Research Systems Inc. (FDS: chart) on December 18, 2007.

Management:

Chairman and CEO: Philip A. Hadley
Senior Vice President, CFO: Peter Walsh
IR: Manager Maggie Yun Zhou
President, COO: Michael F. DiChristina
Senior VP, Director of U.S. Investment Management Services: Michael Frankenfield
Senior VP, Director of Investment Banking and Brokerage Services: Kieran Kennedy
Senior VP, Director of International Operations: Scott L. Beyer

Key Investor Issues

- Net income for the quarter rose to $29.4 million, or 58 cents per share, from $23.8 million, or 47 cents per share, a year ago.
- Total revenue increased 23% to $134.2 million in the first quarter, from $108.9 million during the same quarter last year.
- FactSet Research added 2,800 new users during the quarter.
- Subscriptions increased $21.1 million during the quarter on a constant currency basis and have grown $97.2 million over the past 12 months, a 22 percent increase.

First Quarter Highlights

The U.S. dollar weakened significantly during the first quarter, particularly against the Euro. The decline in value had the following effects in the first quarter when holding currencies constant from the recently completed fourth quarter of fiscal 2007:

- Foreign exchange increased revenues by $400,000 and operating expenses by $900,000.
- It decreased income from operations by $500,000 and the operating margin by 50 basis points.
- EPS declined one penny from foreign exchange.

To facilitate factoring currency into the understanding of historical and future results on an annual basis, FactSet currently has non-dollar expenses of $110 million partially offset by non-dollar revenues of $44 million. This translates to a net exposure of $66 million per year or $17 million per quarter.

The company delivered record revenues in earnings.

ASV increased $21 million on a constant currency basis during the first quarter, up 29% from the $16 million change last year. This increase is double the average increase for this period in the last three years.

On a year-over-year basis subscriptions growth rate increased sequentially from the fourth quarter to 22.2%.

The catalyst behind top-line performance was healthy increases in new users and new clients and the sale of additional services to existing clients, especially to investment management professionals. FactSet achieved this growth despite an environment where many large banks are carefully managing expenses. Earnings per share were 58 cents, representing 23% growth from the year-ago quarter.

Free cash flow generated during the first quarter were $8 million, down from $15 million a year ago.

The decrease was a result of a $24 million decline in working capital partially offset by higher levels of net income. FactSet pays variable employee compensation related to the previous fiscal year in the first quarter. This cash outflow reduced working capital by $29 million.

FactSet also remits estimated tax payments for the first half of the year during the second quarter. In December FactSet paid $14 million representing the estimated tax payment for the just completed first quarter. The timing of estimated tax payments is consistent with prior years, nevertheless it distorts free cash flow in both the first and second quarters.

Accounts receivable increased $3.4 million during the quarter to $63 million.

- Over the last 12 months receivables have increased just 3% while subscriptions advanced 22% over the comparable period.
- As of November 30th DSO stands at 45 days.

FactSet expects receivables to increase during the second quarter. FactSet invoices a small portion of its clients annually in advance. When the annual invoices are circulated accounts receivable and deferred revenues will increase by $11 million in the second quarter.

The ending cash and marketable security balance was $171 million, a decrease of $15 million since August 31st.

The source of the decrease was the previously mentioned variable compensation payment and share repurchases. During the quarter FactSet invested $30 million to repurchase common stock and paid a quarterly dividend of $5.8 million. Currently there is $28 million in remaining share repurchase authorization and shares outstanding at quarter end were $48.2 million.

Capital expenditures in the first quarter were $5.7 million net of landlord contributions for construction.