Investor Information

Forrester Research (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 675,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data and analytics, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations.

News Release

Printer Friendly Version View printer-friendly version
<< Back
Forrester Research Reports Second-Quarter Financial Results

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jul. 30, 2009-- Forrester Research, Inc. (Nasdaq: FORR) today announced its second-quarter ended June 30, 2009 financial results.

Second-Quarter Financial Performance

  • Total revenues were $61.6 million, compared with $63.5 million for the second quarter of last year.
  • On a GAAP-reported basis, Forrester reported net income of $6.2 million, or $0.27 per diluted share, compared with net income of $8.6 million, or $0.37 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $8.8 million, or $0.38 per diluted share, for the second quarter of 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $1.3 million, amortization of $656,000 of acquisition-related intangible assets, and impairments of non-marketable investments of $951,000. This compares with pro forma net income of $8.6 million, or $0.37 per diluted share, for the same period in 2008, which reflects a pro forma effective tax rate of 39 percent. Pro forma net income for the second quarter of 2008 excludes stock-based compensation of $1.3 million, amortization of $23,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $1.6 million and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $666,000.

“Our performance for the quarter met our expectations, with revenue on target and operating margin and EPS slightly exceeding our guidance,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “As expected, the ongoing soft economy continues to impact our deferred revenue performance, declines that are already reflected in our existing guidance. We continue to carefully navigate this difficult economy through prudent expense management, innovating for our clients, and accelerating the role-based strategy so we are well-positioned when the economy begins to recover.”

Six-Month Period Ended June 30, 2009, Financial Performance

  • Total revenues were $118.0 million, compared with $118.4 million for the same period last year.
  • On a GAAP-reported basis, Forrester reported net income of $8.8 million, or $0.38 per diluted share for the six months ended June 30, 2009, compared with net income of $13.7 million or $0.58 per diluted share for the same period last year.
  • On a pro forma basis, net income was $15.0 million or $0.65 per diluted share, for the six months ended June 30, 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income for the six months ended June 30, 2009 excludes stock-based compensation of $3.5 million, amortization of $1.3 million of acquisition-related intangible assets, $3.1 million of reorganization costs, and impairments of non-marketable investments of $951,000. This compares with pro forma net income of $14.8 million, or $0.63 per diluted share, for the same period in 2008, which reflects a pro forma tax rate of 39 percent. Pro forma net income for the six months ended June 30, 2008 excludes stock-based compensation of $2.7 million, amortization of $194,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $2.1 million and expenses related to the restatement of the Company’s historical financial statements of $597,000.

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.

Forrester is providing third-quarter 2009 financial guidance as follows:

Third-Quarter 2009 (GAAP):

  • Total revenues of approximately $50 million to $53 million.
  • Operating margin of approximately 5 percent to 8 percent.
  • Other income of approximately $800,000.
  • An effective tax rate of 40 percent.
  • Diluted earnings per share of approximately $0.09 to $0.13.

Third-Quarter 2009 (Pro Forma):

Pro forma financial guidance for the third quarter of 2009 excludes amortization of acquisition-related intangible assets of approximately $500,000, stock-based compensation expense of $1.1 million to $1.6 million, and any gains or impairment charges related to marketable and non-marketable investments.

  • Pro forma operating margin of approximately 9 percent to 11 percent.
  • Pro forma effective tax rate of 40 percent.
  • Pro forma diluted earnings per share of approximately $0.13 to $0.17.

Forrester is providing full-year 2009 guidance as follows:

Full-Year 2009 (GAAP):

  • Total revenues of approximately $220 million to $233 million.
  • Operating margin of approximately 10 percent to 13 percent.
  • Other income of approximately $3.0 million.
  • An effective tax rate of 40 percent.
  • Diluted earnings per share of approximately $0.66 to $0.84.

Full-Year 2009 (Pro Forma):

Pro forma financial guidance for full-year 2009 excludes stock-based compensation expense of $5.5 million to $6.5 million, reorganization costs of $3.1 million, amortization of acquisition-related intangible assets of approximately $2.1 million, and any gains or impairment charges related to marketable and non-marketable investments.

  • Pro forma operating margin of approximately 15 percent to 17 percent.
  • Pro forma effective tax rate of 40 percent.
  • Pro forma diluted earnings per share of approximately $1.00 to $ 1.11.

About Forrester Research

Forrester Research (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, Forrester’s financial and operating targets for the third quarter of and full-year 2009. These statements are based on Forrester’s current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, Forrester’s ability to respond to business and economic conditions, particularly in light of the continuing global economic downturn, technology spending, market trends, competition, industry consolidation, the ability to attract and retain professional staff, possible variations in Forrester’s quarterly operating results, any cost savings related to reductions in force and associated actions, risks associated with Forrester’s ability to offer new products and services, and Forrester’s dependence on renewals of its membership-based research services and on key personnel. Forrester undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to Forrester’s reports and filings with the Securities and Exchange Commission.

The consolidated statements of income, consolidated balance sheets, and consolidated statements of cash flows are attached.

© 2009, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

           
 
Forrester Research, Inc.
Consolidated Statements of Income                
(In thousands, except per share data)
 
Three months ended June 30, Six months ended June 30,
2009   2008   2009   2008
(Unaudited) (Unaudited)
 
Revenues
Research services $ 39,025 $ 37,861 $ 78,075 $ 73,810
Advisory services and other   22,553     25,613     39,910     44,638
 
Total revenues 61,578 63,474 117,985 118,448
 
Operating expenses
Cost of services and fulfillment 21,860 22,894 44,072 44,042
Selling and marketing 19,303 20,987 38,452 39,837
General and administrative 6,397 8,190 13,369 15,416
Reorganization costs - - 3,141 -
Depreciation 1,144 950 2,236 1,986
Amortization of intangible assets   656     23   1,312     194
 
Total operating expenses 49,360 53,044 102,582 101,475
 
Income from operations 12,218 10,430 15,403 16,973
 
Other income, net 453 1,702 1,722 3,772
Realized (losses) gains from securities and non-marketable investments   (951 )   1,613   (951 )   2,112
 
Income from operations before income tax provision 11,720 13,745 16,174 22,857
 
Income tax provision   5,568     5,100   7,391     9,184
 
 
Net income $ 6,152   $ 8,645 $ 8,783   $ 13,673
 
 
Diluted net income per common share $ 0.27   $ 0.37 $ 0.38   $ 0.58
 
Diluted weighted average common shares outstanding   22,944     23,554   23,025     23,586
 
Basic net income per common share $ 0.27   $ 0.38 $ 0.38   $ 0.59
 
Basic weighted average common shares outstanding   22,703     22,956   22,824     23,002
 
 
Pro forma data (1):
Income from operations $ 12,218 $ 10,430 $ 15,403 $ 16,973
Amortization of intangible assets 656 23 1,312 194
Reorganization costs - - 3,141 -
Investigation related expenses - 666 - 597
 
Stock-based compensation included in the following
expense categories:
Cost of services and fulfillment 640 648 1,748 1,416
Selling and marketing 183 206 610 476
General and administrative   477     444   1,133     813
 
Pro forma income from operations 14,174 12,417 23,347 20,469
 
Other income, net   453     1,702   1,722     3,772
Pro forma income before income taxes 14,627 14,119 25,069 24,241
 
Pro forma income tax provision   5,851     5,506   10,028     9,454
 
Pro forma net income $ 8,776   $ 8,613 $ 15,041   $ 14,787
 
Pro forma diluted earnings per share $ 0.38   $ 0.37 $ 0.65   $ 0.63
Diluted weighted average shares outstanding   22,944     23,554   23,025     23,586

(1) Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester's ongoing business. Our pro forma presentation excludes reorganization costs, amortization of intangible assets, stock-based compensation, net gains or impairments from marketable and non-marketable investments, costs associated with the stock option investigation and restatement of our historical financial statements, as well as their related tax effects. The pro forma data does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States.

     
 
Forrester Research, Inc.
Condensed Consolidated Balance Sheets        
(In thousands)
 
June 30, December 31,
2009 2008
(Unaudited)
 
Assets:
Cash and cash equivalents $ 94,017 $ 129,478
Short-term investments 139,357 83,951
Accounts receivable, net 36,281 64,226
Deferred commissions 7,041 9,749
Deferred income taxes 8,511 7,947
Prepaid expenses and other current assets   11,871     15,553  
Total current assets 297,078 310,904
 
Long-term investments 43,940 46,500
Property and equipment, net 7,344 6,759
Deferred income taxes 8,014 8,523
Goodwill and intangible assets, net 73,856 74,562
Non-marketable investments and other long term assets   6,409     7,703  
Total assets $ 436,641   $ 454,951  
 
Liabilities and stockholders’ equity:
Accounts payable $ 2,709 $ 3,532
Accrued expenses 22,274 27,527
Deferred revenue   98,098     113,844  
Total current liabilities 123,081 144,903
 
 
Non-current liabilities   6,424     6,551  
Total liabilities 129,505 151,454
 
Preferred stock - -
Common stock 292 291
Additional paid-in capital 320,539 315,149
Retained earnings 119,476 110,693
Treasury stock, at cost (130,874 ) (120,851 )
Accumulated other comprehensive loss   (2,297 )   (1,785 )
Total stockholders’ equity   307,136     303,497  
Total liabilities and stockholders’ equity $ 436,641   $ 454,951  
Forrester Research, Inc.    
Consolidated Statements of Cash Flows        
(In thousands)
     
Six months ended June 30,
2009 2008
(Unaudited) (Unaudited)
 
 
Cash flows from operations:
Net income $ 8,783 $ 13,673
Adjustments to reconcile net income to net cash provided by operating activities –
Depreciation 2,236 1,986
Amortization of intangible assets 1,312 194
Non-cash stock-based compensation 3,493 2,705
Increase in provision for doubtful accounts 220 394
Unrealized loss on foreign currency and other, net 216 -
Deferred income taxes 93 1,338
Impairments (gains) from non-marketable investments, net 951 (55 )
Gains on sales of available-for-sale securities - (2,057 )
Amortization of premiums on available-for-sale securities 572 397
Changes in assets and liabilities –
Accounts receivable 28,346 25,429
Deferred commissions 2,709 901
Prepaid expenses and other current assets 3,769 (909 )
Accounts payable (1,316 ) (410 )
Accrued expenses (5,486 ) (1,462 )
Deferred revenue   (16,532 )     (4,630 )
Net cash provided by operating activities 29,366 37,494
 
Cash flows from investing activities:
Acquisition of Forrester Middle East FZ-LLC (752 ) -
Purchases of property and equipment (2,790 ) (1,674 )
Proceeds from non-marketable investments - 225
Decrease in other assets 361 248
Purchases of available-for-sale securities (402,716 ) (678,811 )
Proceeds from sales and maturities of available-for-sale securities   348,604       747,792  
Net cash (used in) provided by investing activities (57,293 ) 67,780
 
Cash flows from financing activities:
Proceeds from issuance of common stock under stock option plans and employee stock purchase plan 1,982 12,811
Tax benefits related to stock options - 3,255
Acquisition of treasury shares   (10,023 )     (20,031 )
Net cash used in financing activities (8,041 ) (3,965 )
 
Effect of exchange rate changes on cash and cash equivalents   507       843  
 
Net (decrease) increase in cash and cash equivalents (35,461 ) 102,152
 
Cash and cash equivalents, beginning of period   129,478       53,163  
 
Cash and cash equivalents, end of period $ 94,017     $ 155,315  

Source: Forrester Research, Inc.

Forrester Research, Inc.
Michael Doyle, +1 617.613.6000
Chief Financial Officer
mdoyle@forrester.com
or
Forrester Research, Inc.
Karyl Levinson, +1 617.613.6262
Vice President, Corporate Communications
press@forrester.com

Print Page Print Page | E-mail Page E-mail Page | RSS Feeds RSS Feeds |

Share Page

X
| E-mail Alerts E-mail Alerts | IR Contacts IR Contacts | Financial Tear Sheet Financial Tear Sheet