EX-99.1 2 b75259frexv99w1.htm EX-99.1 PRESS RELEASE DATED APRIL 30, 2009 exv99w1
Exhibit 99.1
     
(FORRESTER LOGO)   FOR IMMEDIATE RELEASE
Forrester Research Reports First-Quarter Financial Results
Cambridge, Mass., April 30, 2009 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its first-quarter ended March 31, 2009 financial results.
First-Quarter Financial Performance
•   Total revenues were $56.4 million, compared with $55.0 million for the first quarter of last year.
•   On a GAAP-reported basis, Forrester reported net income of $2.6 million, or $0.11 per diluted share, compared with net income of $5.0 million, or $0.21 per diluted share, for the same period last year.
•   On a pro forma basis, net income was $6.3 million, or $0.27 per diluted share, for the first quarter of 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $2.2 million, amortization of $656,000 of acquisition-related intangible assets, and $3.1 million of reorganization costs. This compares with pro forma net income of $6.2 million, or $0.26 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 first quarter of 2008 excludes stock-based compensation of $1.4 million, amortization of $171,000 of acquisition-related intangible assets, marketable and non-marketable investment gains of $497,000, and a net benefit of $68,000 related to the settlement of stock-option-related payroll tax exposure offset by professional fees related to the stock option investigation and restatement of the Company’s historical financial statements.
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
“As demonstrated by our first-quarter financial performance, we are weathering the current recession and managing the business accordingly,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “Based on our deferred revenue model, we should expect that the current softness in the market today will result in a delayed impact on our revenue later in the year. As a result while we exceeded our revenue guidance for the first quarter, we are reiterating our full-year guidance.”
Forrester is providing second-quarter 2009 financial guidance as follows:
Second-Quarter 2009 (GAAP):
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Forrester First-Quarter 2009 Information/ Page 2
•   Total revenues of approximately $60 million to $63 million.
•   Operating margin of approximately 16 percent to 18 percent.
•   Other income of approximately $800,000.
•   An effective tax rate of 40 percent.
•   Diluted earnings per share of approximately $0.27 to $0.31.
Second-Quarter 2009 (Pro Forma):
Pro forma financial guidance for the second quarter of 2009 excludes amortization of acquisition-related intangible assets of approximately $700,000, stock-based compensation expense of $1.2 million to $1.7 million, and any gains or impairment charges related to marketable and non-marketable investments.
•   Pro forma operating margin of approximately 19 percent to 21 percent.
•   Pro forma effective tax rate of 40 percent.
•   Pro forma diluted earnings per share of approximately $0.33 to $0.37.
Forrester is reiterating full-year 2009 guidance as follows:
Full-Year 2009 (GAAP):
•   Total revenues of approximately $215 million to $235 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 $0.64 to $0.84.
Full-Year 2009 (Pro Forma):
Pro forma financial guidance for full-year 2009 excludes stock-based compensation expense of $5 million to $6 million, reorganization costs of $3.1 million, amortization of acquisition-related intangible assets of approximately $2.0 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 diluted earnings per share of approximately $0.88 to $1.31.
•   An effective tax rate of 40 percent.

 

 

Forrester First-Quarter 2009 Information/ Page 3
Forrester also announced today that its board of directors has authorized the repurchase of up to an additional $50 million of its common stock. The shares may be purchased from time to time in open market or privately negotiated transactions. The shares purchased will be used, among other things, for Forrester’s employee and director stock plans. As of March 31, 2009, Forrester had approximately 23,054,000 shares outstanding.
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 19 key roles at major companies providing proprietary research, consumer insight, consulting, events, and peer-to-peer executive programs. For more than 25 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 second 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.
Contact:
     
Michael Doyle
  Karyl Levinson
Chief Financial Officer
  Vice President, Corporate Communications
 
    
Forrester First-Quarter 2009 Information/ Page 4
    
 
    
Forrester Research, Inc.
  Forrester Research, Inc.
+1 617.613.6000
  +1 617.613.6262
mdoyle@forrester.com
  press@forrester.com
© 2009, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

 

 

Forrester First-Quarter Fiscal 2009 Results/Page 4
 
Forrester Research, Inc.
Consolidated Statements of Income
  
(In thousands, except per share data)
                 
    Three months ended March 31,  
    2009     2008  
    (Unaudited)  
 
                
Revenues
                
Research services
   $ 39,050     $ 35,949  
Advisory services and other
     17,357       19,025  
 
            
Total revenues
     56,407       54,974  
 
                
Operating expenses
                
Cost of services and fulfillment
     22,212       21,148  
Selling and marketing
     19,149       18,850  
General and administrative
     6,972       7,226  
Depreciation
     1,092       1,036  
Amortization of intangible assets
     656       171  
Reorganization costs
     3,141       —  
 
            
Total operating expenses
     53,222       48,431  
 
                
Income from operations
     3,185       6,543  
Other income, net
     1,269       2,072  
Realized gains from securities and non-marketable investments
     —       497  
 
            
Income from operations before income taxes
     4,454       9,112  
Income tax provision
     1,823       4,084  
 
            
Net income
   $ 2,631     $ 5,028  
 
            
Diluted income per share
   $ 0.11     $ 0.21  
 
            
Diluted weighted average shares outstanding
     23,106       23,617  
 
            
Basic income per share
   $ 0.11     $ 0.22  
 
            
Basic weighted average shares outstanding
     22,946       23,048  
 
            
 
                
Pro forma data (1):
                
Income from operations
   $ 3,185     $ 6,543  
Amortization of intangible assets
     656       171  
Reorganization costs
     3,141       —  
Investigation related benefit
     —       (68 )
Non-cash stock-based compensation included in the following expense categories:
                
Cost of services and fulfillment
     1,149       768  
Selling and marketing
     365       270  
General and administrative
     678       368  
 
            
 
                
Pro forma income from operations
     9,174       8,052  
 
                
Other income, net
     1,269       2,072  
Pro forma income before income taxes
     10,443       10,124  
Pro forma income tax provision
     4,177       3,948  
 
            
 
                
Pro forma net income
   $ 6,266     $ 6,176  
 
            
 
                
Pro forma diluted income per share
   $ 0.27     $ 0.26  
 
            
 
                
Diluted weighted average shares outstanding
     23,106       23,617  
 
            
 
(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.
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Forrester First-Quarter Fiscal 2009 Results/Page 5
 
Forrester Research, Inc.
Condensed Consolidated Balance Sheets
  
(In thousands)
                 
    March 31,     December 31,  
    2009     2008  
    (Unaudited)          
Assets:
                
Cash and cash equivalents
   $ 111,284     $ 129,478  
Short-term investments
     114,470       83,951  
Deferred commissions
     8,792       9,749  
Deferred income taxes
     7,760       7,947  
Prepaid expenses and other current assets
     18,066       15,553  
 
            
Total current assets
     300,931       310,904  
 
                
Long-term investments
     44,200       46,500  
Property and equipment, net
     8,202       6,759  
Deferred income taxes
     8,884       8,523  
Goodwill and intangible assets, net
     74,242       74,562  
Non-marketable investments and other long term assets
     7,411       7,703  
 
            
Total assets
   $ 443,870     $ 454,951  
 
            
 
                
Liabilities and stockholders’ equity:
                
Accounts payable
   $ 3,062     $ 3,532  
Accrued expenses
     24,847       27,527  
Deferred revenue
     108,412       113,844  
 
            
Total current liabilities
     136,321       144,903  
 
                
Non-current liabilities
     6,053       6,551  
 
            
Total liabilities
     142,374       151,454  
 
                
Preferred stock
     —       —  
Common stock
     291       291  
Additional paid-in capital
     317,676       315,149  
Retained earnings
     113,324       110,693  
Treasury stock, at cost
     (125,750 )     (120,851 )
Accumulated other comprehensive loss
     (4,045 )     (1,785 )
Total stockholders’ equity
     301,496       303,497  
 
            
Total liabilities and stockholders’ equity
   $ 443,870     $ 454,951  
 
            
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Forrester First-Quarter Fiscal 2009 Results/Page 6
 
Forrester Research, Inc.
Consolidated Statements of Cash Flows
  
(In thousands)
 
                 
    Three months ended March 31,  
    2009     2008  
    (Unaudited)     (Unaudited)  
Cash flows from operations:
                
Net income
   $ 2,631     $ 5,028  
Adjustments to reconcile net income to net cash provided by operating activities —
                
Depreciation
     1,092       1,036  
Amortization of intangible assets
     656       171  
Non-cash stock-based compensation
     2,192       1,406  
Increase in provision for doubtful accounts
     150       96  
Unrealized (gain) loss on foreign currency and other, net
     (95 )     —  
Deferred income taxes
     (240 )     605  
Gains from non-marketable investments and available-for-sale securities
     —       (497 )
Tax benefit from exercises of employee stock options
     —       (440 )
Amortization of premiums on available-for-sale securities
     293       187  
Changes in assets and liabilities —
                
Accounts receivable
     23,251       19,802  
Deferred commissions
     958       331  
Prepaid expenses and other current assets
     (2,721 )     1,873  
Accounts payable
     (896 )     (886 )
Accrued expenses
     (2,314 )     (2,644 )
Deferred revenue
     (4,280 )     4,419  
 
            
Net cash provided by operating activities
     20,677       30,487  
 
                
Cash flows from investing activities:
                
Acquisition of Forrester Middle East FZ-LLC
     (561 )     —  
Purchases of property and equipment
     (2,602 )     (954 )
Proceeds from non-marketable investments
     —       200  
Decrease in other assets
     268       202  
Purchases of available-for-sale securities
     (245,911 )     (390,696 )
Proceeds from sales and maturities of available-for-sale securities
     216,444       442,962  
 
            
Net cash (used in) provided by investing activities
     (32,362 )     51,714  
 
                
Cash flows from financing activities:
                
Proceeds from exercises of employee stock options
     366       4,377  
Excess tax benefits from non-cash stock-based compensation
     —       440  
Acquisition of treasury shares
     (4,899 )     (14,474 )
 
            
Net cash used in financing activities
     (4,533 )     (9,657 )
 
                
Effect of exchange rate changes on cash and cash equivalents
     (1,976 )     803  
 
            
 
                
Net (decrease) increase in cash and cash equivalents
     (18,194 )     73,347  
 
                
Cash and cash equivalents, beginning of period
     129,478       53,163  
 
            
 
                
Cash and cash equivalents, end of period
   $ 111,284     $ 126,510  
 
            
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