CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 29, 2009--
Forrester Research, Inc. (Nasdaq: FORR) today announced its
third-quarter ended September 30, 2009 financial results.
Third-Quarter Financial Performance
-
Total revenues were $53.9 million, compared with $59.5 million for the
third quarter of last year.
-
On a GAAP-reported basis, Forrester reported net income of $4.3
million, or $0.19 per diluted share, compared with net income of $6.4
million, or $0.27 per diluted share, for the same period last year.
-
On a pro forma basis, net income was $6.2 million, or $0.27 per
diluted share, for the third quarter of 2009, which reflects a pro
forma effective tax rate of 40 percent. Pro forma net income excludes
stock-based compensation of $1.4 million, amortization of $439,000 of
acquisition-related intangible assets, and impairments of
non-marketable investments of $732,000. This compares with pro forma
net income of $7.4 million, or $0.31 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 third quarter of 2008 excludes
stock-based compensation of $1.3 million, amortization of $282,000 of
acquisition-related intangible assets, net marketable and
non-marketable investment gains of $26,000 and expenses related to the
stock option investigation and restatement of the Company’s historical
financial statements of $487,000.
“Given the sluggish economy, we are pleased with Forrester’s
third-quarter performance,” said George F. Colony, Forrester’s chairman
of the board and chief executive officer. “Deferred revenue was down at
September 30, 2009, as expected; but client and dollar retention
increased from last quarter, and our pro forma net income indicates that
our expense control efforts are working. Overall, our results exceeded
our guidance. As a result we are tightening our revenue range and
raising our pro forma operating margin and diluted earnings per share
guidance for the full year of 2009.”
Nine-Month Period Ended September 30, 2009, Financial Performance
-
Total revenues were $171.9 million, compared with $178.0 million for
the same period last year.
-
On a GAAP-reported basis, Forrester reported net income of $13.1
million, or $0.57 per diluted share for the nine months ended
September 30, 2009, compared with net income of $20.1 million or $0.85
per diluted share for the same period last year.
-
On a pro forma basis, net income was $21.2 million or $0.92 per
diluted share, for the nine months ended September 30, 2009, which
reflects a pro forma effective tax rate of 40 percent. Pro forma net
income excludes stock-based compensation of $4.9 million, amortization
of $1.8 million of acquisition-related intangible assets, $3.1 million
of reorganization costs, and impairments of non-marketable investments
of $1.7 million. This compares with pro forma net income of $22.2
million, or $0.94 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 nine-month period ended September 30, 2008 excludes
stock-based compensation of $4.0 million, amortization of $476,000 of
acquisition-related intangible assets, net marketable and
non-marketable investment gains of $2.1 million and expenses related
to the stock option investigation and restatement of the Company’s
historical financial statements of $1.1 million.
A reconciliation of GAAP results to pro forma results may be found in
the attached financial tables.
Forrester is providing fourth-quarter 2009 financial guidance as follows:
Fourth-Quarter 2009 (GAAP):
-
Total revenues of approximately $58 million to $61 million.
-
Operating margin of approximately 13% to 15%.
-
Other income of approximately $500,000.
-
An effective tax rate of 40 percent.
-
Diluted earnings per share of approximately $0.21 to $0.26.
Fourth-Quarter 2009 (Pro Forma):
Pro forma financial guidance for the fourth quarter of 2009 excludes
stock based compensation of $1.2 million to $1.4 million, amortization
of acquisition-related intangible assets of approximately $300,000, and
any gains or impairment charges related to marketable and non-marketable
investments.
-
Pro forma operating margin of approximately 16% to 18%.
-
Pro forma effective tax rate of 40%.
-
Pro forma diluted earnings per share of approximately $0.26 to $0.30.
Forrester is providing full-year 2009 guidance as follows:
Full-Year 2009 (GAAP):
-
Total revenues of approximately $230 million to $233 million.
-
Operating margin of approximately 13% to 14%.
-
Other income of approximately $2.7 million.
-
An effective tax rate of 44 percent.
-
Diluted earnings per share of approximately $0.80 to $0.87.
Full-Year 2009 (Pro Forma):
Pro forma financial guidance for full-year 2009 excludes stock-based
compensation expense of $6.1 million to $6.3 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 18% to 19%.
-
Pro forma effective tax rate of 40 percent.
-
Pro forma diluted earnings per share of approximately $1.18 to $ 1.22.
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 fourth 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 global economic environment,
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.
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Forrester Research, Inc.
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Consolidated Statements of Income
|
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(In thousands, except per share data)
|
|
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|
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Three months ended September 30,
|
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Nine months ended September 30,
|
|
|
|
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2009
|
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2008
|
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2009
|
|
2008
|
|
|
|
|
|
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(Unaudited)
|
|
(Unaudited)
|
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|
|
|
|
|
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|
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Revenues
|
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|
|
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|
|
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|
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Research services
|
|
|
$
|
38,893
|
|
|
$
|
40,326
|
|
$
|
116,968
|
|
|
$
|
114,136
|
|
Advisory services and other
|
|
|
|
14,988
|
|
|
|
19,180
|
|
|
54,898
|
|
|
|
63,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total revenues
|
|
|
|
53,881
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|
|
|
59,506
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|
|
171,866
|
|
|
|
177,954
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|
|
|
|
|
|
|
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|
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|
|
|
Operating expenses
|
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|
|
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|
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Cost of services and fulfillment
|
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|
|
19,234
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|
|
21,806
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|
63,306
|
|
|
|
65,848
|
|
Selling and marketing
|
|
|
|
18,084
|
|
|
|
20,282
|
|
|
56,536
|
|
|
|
60,119
|
|
General and administrative
|
|
|
|
7,099
|
|
|
|
7,529
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|
|
20,468
|
|
|
|
22,945
|
|
Reorganization costs
|
|
|
|
-
|
|
|
|
-
|
|
|
3,141
|
|
|
|
-
|
|
Depreciation
|
|
|
|
1,075
|
|
|
|
1,012
|
|
|
3,311
|
|
|
|
2,998
|
|
Amortization of intangible assets
|
|
|
|
439
|
|
|
|
282
|
|
|
1,751
|
|
|
|
476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total operating expenses
|
|
|
|
45,931
|
|
|
|
50,911
|
|
|
148,513
|
|
|
|
152,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations
|
|
|
|
7,950
|
|
|
|
8,595
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|
|
23,353
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|
|
|
25,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Other income, net
|
|
|
|
460
|
|
|
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1,447
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|
|
2,182
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|
|
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5,221
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Realized (losses) gains from marketable and non-marketable
investments
|
|
|
|
(732
|
)
|
|
|
26
|
|
|
(1,683
|
)
|
|
|
2,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations before income tax provision
|
|
|
|
7,678
|
|
|
|
10,068
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|
|
23,852
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|
|
|
32,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
3,378
|
|
|
|
3,680
|
|
|
10,769
|
|
|
|
12,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income
|
|
|
$
|
4,300
|
|
|
$
|
6,388
|
|
$
|
13,083
|
|
|
$
|
20,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share
|
|
|
$
|
0.19
|
|
|
$
|
0.27
|
|
$
|
0.57
|
|
|
$
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Diluted weighted average common shares outstanding
|
|
|
|
22,809
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|
|
|
23,793
|
|
|
22,953
|
|
|
|
23,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share
|
|
|
$
|
0.19
|
|
|
$
|
0.28
|
|
$
|
0.58
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
|
22,561
|
|
|
|
23,163
|
|
|
22,736
|
|
|
|
23,056
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Pro forma data (1):
|
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|
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|
|
|
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|
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Income from operations
|
|
|
$
|
7,950
|
|
|
$
|
8,595
|
|
$
|
23,353
|
|
|
$
|
25,568
|
|
Amortization of intangible assets
|
|
|
|
439
|
|
|
|
282
|
|
|
1,751
|
|
|
|
476
|
|
Reorganization costs
|
|
|
|
-
|
|
|
|
-
|
|
|
3,141
|
|
|
|
-
|
|
Investigation related expenses
|
|
|
|
-
|
|
|
|
487
|
|
|
-
|
|
|
|
1,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation included in the following expense
categories:
|
|
|
|
|
|
|
|
|
|
|
Cost of services and fulfillment
|
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|
|
733
|
|
|
|
678
|
|
|
2,481
|
|
|
|
2,094
|
|
Selling and marketing
|
|
|
|
274
|
|
|
|
247
|
|
|
884
|
|
|
|
723
|
|
General and administrative
|
|
|
|
423
|
|
|
|
343
|
|
|
1,556
|
|
|
|
1,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma income from operations
|
|
|
|
9,819
|
|
|
|
10,632
|
|
|
33,166
|
|
|
|
31,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
460
|
|
|
|
1,447
|
|
|
2,182
|
|
|
|
5,221
|
|
Pro forma income before income taxes
|
|
|
|
10,279
|
|
|
|
12,079
|
|
|
35,348
|
|
|
|
36,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma income tax provision
|
|
|
|
4,112
|
|
|
|
4,711
|
|
|
14,139
|
|
|
|
14,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income
|
|
|
$
|
6,167
|
|
|
$
|
7,368
|
|
$
|
21,209
|
|
|
$
|
22,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma diluted net income per share
|
|
|
$
|
0.27
|
|
|
$
|
0.31
|
|
$
|
0.92
|
|
|
$
|
0.94
|
|
Diluted weighted average common shares outstanding
|
|
|
|
22,809
|
|
|
|
23,793
|
|
|
22,953
|
|
|
|
23,655
|
|
|
|
|
|
|
|
|
|
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(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)
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
108,177
|
|
|
$
|
129,478
|
|
|
Short-term investments
|
|
|
|
|
162,055
|
|
|
|
83,951
|
|
|
Accounts receivable, net
|
|
|
|
|
36,404
|
|
|
|
64,226
|
|
|
Deferred commissions
|
|
|
|
|
6,365
|
|
|
|
9,749
|
|
|
Deferred income taxes
|
|
|
|
|
9,037
|
|
|
|
7,947
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
10,112
|
|
|
|
15,553
|
|
|
Total current assets
|
|
|
|
|
332,150
|
|
|
|
310,904
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term investments
|
|
|
|
|
9,950
|
|
|
|
46,500
|
|
|
Property and equipment, net
|
|
|
|
|
6,957
|
|
|
|
6,759
|
|
|
Deferred income taxes
|
|
|
|
|
7,460
|
|
|
|
8,523
|
|
|
Goodwill and intangible assets, net
|
|
|
|
|
73,463
|
|
|
|
74,562
|
|
|
Non-marketable investments and other long term assets
|
|
|
|
|
5,612
|
|
|
|
7,703
|
|
|
Total assets
|
|
|
|
$
|
435,592
|
|
|
$
|
454,951
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
1,952
|
|
|
$
|
3,532
|
|
|
Accrued expenses
|
|
|
|
|
23,892
|
|
|
|
27,527
|
|
|
Deferred revenue
|
|
|
|
|
93,541
|
|
|
|
113,844
|
|
|
Total current liabilities
|
|
|
|
|
119,385
|
|
|
|
144,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
6,552
|
|
|
|
6,551
|
|
|
Total liabilities
|
|
|
|
|
125,937
|
|
|
|
151,454
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
-
|
|
|
|
-
|
|
|
Common stock
|
|
|
|
|
293
|
|
|
|
291
|
|
|
Additional paid-in capital
|
|
|
|
|
322,707
|
|
|
|
315,149
|
|
|
Retained earnings
|
|
|
|
|
123,776
|
|
|
|
110,693
|
|
|
Treasury stock, at cost
|
|
|
|
|
(136,084
|
)
|
|
|
(120,851
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(1,037
|
)
|
|
|
(1,785
|
)
|
|
Total stockholders’ equity
|
|
|
|
|
309,655
|
|
|
|
303,497
|
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
435,592
|
|
|
$
|
454,951
|
|
|
Forrester Research, Inc.
|
|
Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operations:
|
|
|
|
|
|
|
Net income
|
|
$
|
13,083
|
|
|
|
$
|
20,061
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities –
|
|
|
|
|
|
|
Depreciation
|
|
|
3,311
|
|
|
|
|
2,998
|
|
|
Amortization of intangible assets
|
|
|
1,751
|
|
|
|
|
476
|
|
|
Non-cash stock-based compensation
|
|
|
4,921
|
|
|
|
|
3,973
|
|
|
Increase in provision for doubtful accounts
|
|
|
320
|
|
|
|
|
494
|
|
|
Unrealized loss on foreign currency and other, net
|
|
|
125
|
|
|
|
|
-
|
|
|
Deferred income taxes
|
|
|
225
|
|
|
|
|
2,961
|
|
|
Impairments (gains) from non-marketable investments, net
|
|
|
1,683
|
|
|
|
|
(79
|
)
|
|
Gains on sales of marketable investments
|
|
|
-
|
|
|
|
|
(2,057
|
)
|
|
Amortization of premiums on marketable investments
|
|
|
838
|
|
|
|
|
626
|
|
|
Changes in assets and liabilities –
|
|
|
|
|
|
|
Accounts receivable
|
|
|
28,401
|
|
|
|
|
34,518
|
|
|
Deferred commissions
|
|
|
3,385
|
|
|
|
|
2,134
|
|
|
Prepaid expenses and other current assets
|
|
|
5,611
|
|
|
|
|
2,290
|
|
|
Accounts payable
|
|
|
(2,050
|
)
|
|
|
|
(1,056
|
)
|
|
Accrued expenses
|
|
|
(3,797
|
)
|
|
|
|
(10,035
|
)
|
|
Deferred revenue
|
|
|
(21,338
|
)
|
|
|
|
(16,951
|
)
|
|
Net cash provided by operating activities
|
|
|
36,469
|
|
|
|
|
40,353
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Acquisition of JupiterResearch
|
|
|
-
|
|
|
|
|
(23,398
|
)
|
|
Acquisition of Forrester Middle East FZ-LLC
|
|
|
(752
|
)
|
|
|
|
-
|
|
|
Purchases of property and equipment
|
|
|
(3,464
|
)
|
|
|
|
(2,730
|
)
|
|
Proceeds from non-marketable investments
|
|
|
-
|
|
|
|
|
250
|
|
|
Decrease in other assets
|
|
|
438
|
|
|
|
|
344
|
|
|
Purchases of marketable investments
|
|
|
(530,345
|
)
|
|
|
|
(966,671
|
)
|
|
Proceeds from sales and maturities of marketable investments
|
|
|
487,339
|
|
|
|
|
1,028,902
|
|
|
Net cash (used in) provided by investing activities
|
|
|
(46,784
|
)
|
|
|
|
36,697
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from issuance of common stock under stock option plans and
employee stock purchase plan
|
|
|
2,721
|
|
|
|
|
17,246
|
|
|
Tax benefits related to stock options
|
|
|
-
|
|
|
|
|
5,314
|
|
|
Acquisition of treasury shares
|
|
|
(15,233
|
)
|
|
|
|
(26,086
|
)
|
|
Net cash used in financing activities
|
|
|
(12,512
|
)
|
|
|
|
(3,526
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
1,526
|
|
|
|
|
(1,818
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(21,301
|
)
|
|
|
|
71,706
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
129,478
|
|
|
|
|
53,163
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
108,177
|
|
|
|
$
|
124,869
|
|
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
|
