Forrester Research Reports First-Quarter Financial Results; Increases Share Repurchase Authorization By $25 Million
First-Quarter Financial Performance
Total revenues were
On a GAAP basis, net loss was
On a pro forma basis, net income was
“Forrester was at the upper end of revenue guidance as we continue to
see improved sales performance,” said
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
Second-Quarter 2014 (GAAP):
-
Total revenues of approximately
$82.5 million to $85.5 million - Operating margin of approximately 7.5% to 9.5%
- Other income, net of zero
- An effective tax rate of 38%
-
Diluted earnings per share of approximately
$0.20 to $0.24
Second-Quarter 2014 (Pro Forma):
Pro forma financial guidance for the second quarter of 2014 excludes
stock-based compensation expense of
- Pro forma operating margin of approximately 11.0% to 13.0%
- Pro forma effective tax rate of 38%
-
Pro forma diluted earnings per share of approximately
$0.29 to $0.33
Our full-year 2014 guidance is as follows:
Full-Year 2014 (GAAP):
-
Total revenues of approximately
$304.0 million to $312.0 million - Operating margin of approximately 6.0% to 7.0%
- Other income, net of zero
- An effective tax rate of 38%
-
Diluted earnings per share of approximately
$0.57 to $0.64
Full-Year 2014 (Pro Forma):
Pro forma financial guidance for full-year 2014 excludes stock-based
compensation expense of
- Pro forma operating margin of approximately 9.5% to 10.5%
- Pro forma effective tax rate of 38%
-
Pro forma diluted earnings per share of approximately
$0.93 to $1.00
Quarterly Dividend
About
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
guidance for the second quarter of and full-year 2014 and statements
about Forrester’s future financial performance and financial condition.
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 retain and enrich memberships for
its research products and services, technology spending, Forrester’s
ability to respond to business and economic conditions and market
trends, the risks and challenges inherent in international business
activities, competition and industry consolidation, the ability to
attract and retain professional staff, Forrester’s dependence on key
personnel, the possibility of network disruptions and security breaches,
and possible variations in Forrester’s quarterly operating results.
Financial guidance regarding shares outstanding and per-share amounts is
based on certain assumptions that are subject to change, including as a
result of the number of shares repurchased by
The consolidated statements of income and the table of key financial data are attached.
© 2014,
| Forrester Research, Inc. | ||||||||||
| Consolidated Statements of Income | ||||||||||
| (Unaudited, in thousands, except per share data) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Revenues: | ||||||||||
| Research services | $ | 50,793 | $ | 50,278 | ||||||
| Advisory services and other | 22,278 | 21,083 | ||||||||
| Total revenues | 73,071 | 71,361 | ||||||||
| Operating expenses: | ||||||||||
| Cost of services and fulfillment | 29,480 | 27,027 | ||||||||
| Selling and marketing | 29,883 | 27,057 | ||||||||
| General and administrative | 9,527 | 9,487 | ||||||||
| Depreciation | 2,773 | 2,360 | ||||||||
| Amortization of intangible assets | 539 | 559 | ||||||||
| Reorganization costs | 849 | 1,591 | ||||||||
| Total operating expenses | 73,051 | 68,081 | ||||||||
| Income from operations | 20 | 3,280 | ||||||||
| Other income (loss), net | (64 | ) | 376 | |||||||
| Gains (losses) on investments, net | 37 | (200 | ) | |||||||
| Income (loss) before income taxes | (7 | ) | 3,456 | |||||||
| Income tax provision | 59 | 1,287 | ||||||||
| Net income (loss) | $ | (66 | ) | $ | 2,169 | |||||
| Diluted income per share | $ | - | $ | 0.10 | ||||||
| Diluted weighted average shares outstanding | 19,613 | 22,658 | ||||||||
| Basic income per share | $ | - | $ | 0.10 | ||||||
| Basic weighted average shares outstanding | 19,613 | 22,306 | ||||||||
| Pro forma data (1): | ||||||||||
| Income from operations | $ | 20 | $ | 3,280 | ||||||
| Amortization of intangible assets | 539 | 559 | ||||||||
| Reorganization costs | 849 | 1,591 | ||||||||
| Stock-based compensation included in the | ||||||||||
| following expense categories: | ||||||||||
| Cost of services and fulfillment | 1,073 | 904 | ||||||||
| Selling and marketing | 338 | 422 | ||||||||
| General and administrative | 536 | 534 | ||||||||
| Pro forma income from operations | 3,355 | 7,290 | ||||||||
| Other income (loss), net | (64 | ) | 376 | |||||||
| Pro forma income before income taxes | 3,291 | 7,666 | ||||||||
| Pro forma income tax provision | 1,251 | 2,990 | ||||||||
| Pro forma net income | $ | 2,040 | $ | 4,676 | ||||||
| Pro forma diluted income per share | $ | 0.10 | $ | 0.21 | ||||||
| Pro forma diluted weighted average shares outstanding | 20,154 | 22,658 | ||||||||
| (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, and are also used by Forrester in making compensation decisions. Our pro forma presentation excludes amortization of acquisition-related intangible assets, stock-based compensation, reorganization costs and net gains or losses from investments, 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. | ||||||||||
| Consolidated Balance Sheet and Cash Flow Data | ||||||||||
| (Unaudited, in thousands, except headcount data) | ||||||||||
| March 31, | December 31, | |||||||||
| 2014 | 2013 | |||||||||
| Balance sheet data: | ||||||||||
| Cash, cash equivalents and marketable investments | $ | 157,241 | $ | 155,145 | ||||||
| Accounts receivable, net | $ | 49,105 | $ | 77,543 | ||||||
| Deferred revenue | $ | 159,778 | $ | 152,903 | ||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Cash flow data: | ||||||||||
| Net cash provided by operating activities | $ | 33,004 | $ | 35,453 | ||||||
| Purchases of property and equipment | $ | (680 | ) | $ | (939 | ) | ||||
| Repurchases of common stock | $ | (29,712 | ) | $ | - | |||||
| Dividend paid | $ | (3,135 | ) | $ | (3,350 | ) | ||||
| As of March 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Metrics: | ||||||||||
| Agreement value | $ | 223,345 | $ | 218,619 | ||||||
| Client retention | 74 | % | 77 | % | ||||||
| Dollar retention | 87 | % | 90 | % | ||||||
| Enrichment | 97 | % | 95 | % | ||||||
| Number of clients | 2,461 | 2,442 | ||||||||
| As of March 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Headcount: | ||||||||||
| Total headcount | 1,304 | 1,222 | ||||||||
| Research and consulting staff | 492 | 441 | ||||||||
| Sales staff |
491 |
460 | ||||||||
Source:
Forrester Research, Inc.
Michael Doyle, +1 617-613-6000
Chief
Financial Officer
mdoyle@forrester.com
or
Jon
Symons, + 1 617-613-6104
Vice President, Corporate Communications
press@forrester.com