News Release
| Forrester Research Corrects Third-Quarter 2007 Financial Results Press Release |
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Nov. 20, 2007--Forrester Research, Inc. (Nasdaq: FORR) today reported a correction to the consolidated statements of cash flows included in its November 19, 2007 press release announcing financial results for the third quarter ended September 30, 2007. The consolidated statement of cash flows for the nine months ended September 30, 2006 contained a mathematical error, resulting in inaccurate net cash provided by operating activities and accordingly, in the net increase in, and end of period, cash and cash equivalents. The consolidated statements of income and balance sheets are not affected. The consolidated statements of income, consolidated balance sheets, and corrected consolidated statements of cash flows are attached. About Forrester Research Forrester Research (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice about technology's impact on business and consumers. For 24 years, Forrester has been a thought leader and trusted advisor, helping global clients lead in their markets through its research, consulting, events, and peer-to-peer executive programs. For more information, visit www.forrester.com. (C) 2007, 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 Nine months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2007 2006 2007 2006
------------------- --------------------
(as (as
restated) restated)
------------------- --------------------
(Unaudited) (Unaudited)
Revenues
Research services $ 32,945 $ 29,690 $ 96,312 $ 84,280
Advisory services and
other 18,190 14,384 57,325 48,245
-------- ---------- --------- ----------
Total revenues 51,135 44,074 153,637 132,525
Operating expenses
Cost of services and
fulfillment 18,648 17,070 60,106 54,301
Selling and marketing 17,913 14,228 52,813 44,031
General and
administrative 7,002 5,445 22,533 16,760
Depreciation 1,026 947 2,881 2,747
Amortization of
intangible assets 293 474 978 1,598
-------- ---------- --------- ----------
Total operating expenses 44,882 38,164 139,311 119,437
Income from continuing
operations 6,253 5,910 14,326 13,088
Other income, net 2,175 1,652 6,153 3,936
Gains (impairments)
from non-marketable
investments, net 98 98 (1,690) 305
-------- ---------- --------- ----------
Income from continuing
operations before
income taxes 8,526 7,660 18,789 17,329
Income tax provision 1,729 2,828 5,460 7,511
-------- ---------- --------- ----------
Income from continuing
operations $ 6,797 $ 4,832 $ 13,329 $ 9,818
======== ========== ========= ==========
Discontinued operations
Income from
discontinued
operations, net of
taxes - 51 - 300
Gain on sale of
discontinued
operations, net of
taxes - 1,399 - 1,399
-------- ---------- --------- ----------
Net Income $ 6,797 $ 6,282 $ 13,329 $ 11,517
======== ========== ========= ==========
Diluted income per
share from continuing
operations $ 0.29 $ 0.21 $ 0.56 $ 0.43
======== ========== ========= ==========
Diluted income per
share from
discontinued
operations $ - $ 0.06 $ - $ 0.07
======== ========== ========= ==========
Diluted income per
share from net income $ 0.29 $ 0.27 $ 0.56 $ 0.51
======== ========== ========= ==========
Diluted weighted
average shares
outstanding 23,667 23,428 23,749 22,693
======== ========== ========= ==========
Basic income per share
from continuing
operations $ 0.29 $ 0.21 $ 0.58 $ 0.45
======== ========== ========= ==========
Basic income per share
from discontinued
operations $ - $ 0.07 $ - $ 0.08
======== ========== ========= ==========
Basic income per share
from net income $ 0.29 $ 0.28 $ 0.58 $ 0.53
======== ========== ========= ==========
Basic weighted average
shares outstanding 23,072 22,637 23,067 21,937
======== ========== ========= ==========
Pro forma data (1):
Income from continuing
operations $ 6,253 $ 5,910 $ 14,326 $ 13,088
Amortization of
intangible assets 293 474 978 1,598
Investigation related
expenses 808 - 3,635 -
Non-cash stock-based
compensation included
in the following
expense categories:
Cost of services and
fulfillment 817 696 3,119 2,254
Selling and
marketing 313 443 1,524 1,393
General and
administrative 295 410 1,120 1,562
-------- ---------- --------- ----------
Pro forma income from
continuing operations 8,779 7,933 24,702 19,895
Other income, net 2,175 1,652 6,153 3,936
-------- ---------- --------- ----------
Pro forma income before
income taxes 10,954 9,585 30,855 23,831
Pro forma income tax
provision 4,272 3,546 12,033 8,817
-------- ---------- --------- ----------
Pro forma net income $ 6,682 $ 6,039 $ 18,822 $ 15,014
======== ========== ========= ==========
Pro forma diluted
earnings per share $ 0.28 $ 0.26 $ 0.79 $ 0.66
======== ========== ========= ==========
Diluted weighted
average shares
outstanding 23,667 23,428 23,749 22,693
======== ========== ========= ==========
(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 amortization of intangibles, non-cash
stock-based compensation expense gains or impairments of non-
marketable investments, and costs associated with the stock
option investigation and restatement of our historical financial
statements, as well as their related tax effects. This does not
purport to be prepared in accordance with Accounting Principles
Generally Accepted in the United States.
Forrester Research, Inc.
Consolidated Balance Sheets
----------------------------------------------------------------------
(In thousands)
Sept 30, December 31,
2007 2006
----------- ------------
(Unaudited)
Assets:
Cash and cash equivalents $ 40,820 $ 39,157
Available-for-sale securities 198,562 168,676
Accounts receivable, net 35,729 59,727
Deferred commissions 7,901 10,117
Deferred income taxes 14,717 13,592
Prepaid expenses and other current assets 10,558 7,610
----------- ------------
Total current assets 308,287 298,879
Property and equipment, net 6,641 5,611
Goodwill, net 53,527 53,171
Deferred income taxes 5,323 11,335
Intangible assets, net 539 1,517
Other Assets 855 615
Non-marketable investments 10,013 13,015
----------- ------------
Total assets $ 385,185 $ 384,143
=========== ============
Liabilities and stockholders' equity:
Accounts payable $ 2,531 $ 2,878
Accrued expenses 23,520 29,852
Deferred revenue 85,238 99,875
----------- ------------
Total liabilities 111,289 132,605
Deferred income tax liability and other
non-current accrued income tax liability 6,068 6,633
Preferred stock - -
Common stock 279 279
Additional paid-in capital 276,880 270,306
Retained earnings 75,862 62,766
Treasury stock, at cost (85,834) (85,834)
Accumulated other comprehensive loss 641 (2,612)
----------- ------------
Total stockholders' equity 267,828 244,905
----------- ------------
Total liabilities and stockholders' equity $ 385,185 $ 384,143
=========== ============
Forrester Research, Inc.
Consolidated Statements of Cash Flows
----------------------------------------------------------------------
(In thousands)
Nine Months ended
Sept 30, Sept 30,
2007 2006
---------------------
(as
restated)
Unaudited
Cash flows from operations:
Net income $ 13,329 $ 11,517
Net income and gain from sale of discontinued
operations - (1,699)
---------- ----------
Income from continuing operations $ 13,329 $ 9,818
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation 2,881 2,747
Amortization of intangible assets 978 1,598
Non-cash stock-based compensation 5,763 5,209
Impairments (gains) from non-marketable
investments, net 1,690 (258)
Increase in provision for doubtful accounts 380 150
Deferred income taxes 3,991 (316)
Accretion of premiums on marketable securities 473 631
Changes in assets and liabilities - - -
Accounts receivable 24,147 21,816
Deferred commissions 2,216 1,725
Prepaid expenses and other current assets (4,146) (1,606)
Accounts payable (338) 280
Accrued expenses (6,116) 5,403
Deferred revenue (16,053) (11,389)
---------- ----------
Net cash provided by operating activities 29,195 35,808
Net cash provided by discontinued operations - 326
---------- ----------
Net cash provided by operating activities 29,195 36,134
Cash flows from investing activities:
Purchases of property and equipment (3,826) (2,348)
Purchase of non-marketable investments - (300)
Proceeds from non-marketable investments 1,058 380
Proceeds from sale of discontinued operations 250 1,642
Decrease in other assets 26 403
Purchase of marketable securities (872,420) (465,362)
Proceeds from sales and maturities of
marketable securities 845,631 388,916
---------- ----------
Net cash (used in) provided by investing
activities (29,281) (76,669)
Cash flows from financing activities:
Proceeds from issuance of common stock under
employee stock option plans and employee stock
purchase plan 811 35,216
Excess tax benefits from non-cash stock-based
compensation - 253
Acquisition of treasury shares - (12,307)
---------- ----------
Net cash provided by (used in) financing
activities 811 23,162
Effect of exchange rate changes on cash and cash
equivalents 938 457
---------- ----------
Net increase in cash and cash equivalents 1,663 (16,916)
Cash and cash equivalents, beginning of period 39,157 48,538
---------- ----------
Cash and cash equivalents, end of period $ 40,820 $ 31,622
========== ==========
CONTACT: Forrester Research, Inc.
Michael Doyle, +1 617-613-6000
Chief Financial Officer
mdoyle@forrester.com
or
Karyl Levinson, +1 617-613-6262
Vice President, Corporate Communications
press@forrester.com
SOURCE: Forrester Research, Inc.
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