-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HE64TYG++DhpzpEWpoC9Cg6wR1TqffnM1gJ8DYPHSQ1+dnu9nblX8A2JKLtNjvhp JjLvlSkQHka0n7oIo74sWA== 0001157523-04-003939.txt : 20040428 0001157523-04-003939.hdr.sgml : 20040428 20040428105418 ACCESSION NUMBER: 0001157523-04-003939 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040428 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORRESTER RESEARCH INC CENTRAL INDEX KEY: 0001023313 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 042797789 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21433 FILM NUMBER: 04758990 BUSINESS ADDRESS: STREET 1: 400 TECHNOLOGY SQUARE CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6174977090 MAIL ADDRESS: STREET 1: 400 TECHNOLOGY SQUARE CITY: CAMBRIDGE STATE: MA ZIP: 02139 8-K 1 a4627273.txt FORRESTER RESEARCH INCORPORATED 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): April 28, 2004 FORRESTER RESEARCH, INC. (Exact Name of Registrant Specified in Charter) Delaware 000-21433 04-2797789 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 400 Technology Square, Cambridge, Massachusetts 02139 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (617) 613-6000 N/A ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Page 1 of 5 Exhibit Index appears on Page 4 ITEM 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated April 28, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The information contained in this current report on Form 8-K is furnished pursuant to Item 12 of Form 8-K "Results of Operations and Financial Condition". This information and the exhibits hereto are being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended. The information contained in this report shall not be incorporated by reference into any filing of Forrester Research, Inc. with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filings. On April 28, 2004, Forrester Research, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2004, the full text of which is attached hereto as Exhibit 99.1. 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 the following: Amortization of acquisition-related intangibles - we exclude the non-cash effect of the amortization of acquisition-related intangibles from our pro forma results in order to more consistently present our ongoing results of operations. Impairments of non-marketable securities - we have consistently excluded both one-time gains and one-time write-offs related to our investments in non-marketable securities from our pro forma results in order to keep quarter over quarter comparisons consistent. Reorganization costs - we exclude reorganization costs in order to present a consistent basis for quarterly comparisons and to more consistently present our results of operations. However, these measures should be considered in addition to, not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with generally accepted accounting principles as more fully discussed in the Forrester's financial statements and filings with the Securities and Exchange Commission. -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FORRESTER RESEARCH, INC. By: /s/ WARREN HADLEY ----------------------------------------------- Name: Warren Hadley Title: Treasurer and Chief Financial Officer Dated: April 28, 2004 -3- Exhibit Index Exhibit Description Page - ------ ------------ ---- 99.1 Press Release dated April 28, 2004. 5 EX-99.1 2 a4627273ex991.txt FORRESTER RESEARCH ANNOUNCES 1ST-Q 2004 RESULTS Exhibit 99.1 Forrester Research Announces First-Quarter 2004 Financial Results CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 28, 2004--Forrester Research, Inc. (Nasdaq: FORR) today announced its first-quarter ended March 31, 2004 financial results, in line with its previous financial guidance. First-Quarter Financial Performance -- Total revenues were $31.7 million, compared with $24.5 million for the first quarter of last year. -- On a GAAP-reported basis, which reflects an effective tax rate of 33.5 percent, Forrester reported a first-quarter net loss of $257,000 or $0.01 per diluted share, compared with net income of $1.8 million, or $0.08 per diluted share, for the same period last year. -- On a pro forma basis, which excludes amortization of $2.3 million of acquisition-related intangible assets, reorganization costs of $2.0 million, and which reflects a pro forma effective tax rate of 35 percent, net income was $2.5 million, or $0.11 per diluted share, for the first quarter of 2004. This compares with pro forma net income of $2.5 million, or $0.11 per diluted share, for the same period in 2003, which excludes amortization of $924,000 of acquisition-related intangible assets and impairments to certain non-marketable investments of $300,000, and a pro forma effective tax rate of 35 percent. A reconciliation of GAAP results to pro forma results may be found in the attached financial tables. "The first quarter showed continued stabilization in Forrester's business," said George F. Colony, chairman of the board and chief executive officer. "Our dollar retention rate improved to 83%, meeting our target range of 80% to 85% for the first time in three years. Also during the quarter, our clients began using WholeView 2(TM), our integrated research product. Our newly designed site offers Forrester's clients quick access to a unique and valuable database of research services combining the former WholeView and Giga Advisory. WholeView 2 now serves as the foundation for all of Forrester's products and services moving forward." Forrester is providing financial guidance as follows: Second-Quarter 2004 (GAAP): -- Total revenues of approximately $32.0 million to $34.0 million. -- Operating margin of approximately (1) percent to 3 percent. -- Other income of approximately $650,000 to $750,000. -- An effective tax rate of 33.5 percent. -- Diluted earnings per share of approximately $0.00 to $0.04. Second-Quarter 2004 (Pro Forma): Pro forma financial guidance for the second quarter of 2004 excludes amortization of acquisition-related intangible assets of approximately $1.4 million, a reorganization charge of approximately $1.5 million to $2.0 million related to the relocation of Forrester's San Francisco office, and any gains or impairment charges related to non-marketable investments. -- Pro forma operating margin of approximately 10 percent to 12 percent. -- Pro forma effective tax rate of 35 percent, which varies from our estimated GAAP effective tax rate of 33.5 percent because of our tax-free interest income decreasing as a percentage of our pro forma pre-tax income. -- Pro forma diluted earnings per share of approximately $0.11 to $0.13. Full-Year 2004 (GAAP): -- Total revenues of approximately $133.0 million to $138.0 million. -- Operating margin of approximately 3 percent to 7 percent. -- Other income of approximately $2.7 million to $2.9 million. -- An effective tax rate of 33.5 percent. -- Diluted earnings per share of approximately $0.22 to $0.27. Full-Year 2004 (Pro Forma): Pro forma financial guidance for full-year 2004 excludes amortization of acquisition-related intangible assets of approximately $6.5 million, any impairment gains or impairment charges related to non-marketable investments, and reorganization charges of approximately $4.0 million to $5.0 million. -- Pro forma operating margin of approximately 11 percent to 13 percent. -- Pro forma effective tax rate of 35 percent, which varies from our estimated GAAP effective tax rate of 33.5 percent because of our tax-free interest income decreasing as a percentage of our pro forma pre-tax income. -- Pro forma diluted earnings per share of approximately $0.52 to $0.57. Forrester is an independent technology research company that provides pragmatic and forward-thinking advice about technology's impact on business. Business, marketing, and IT professionals worldwide collaborate with Forrester to align their technology investments with their business goals. Forrester offers products and services in four major areas: Research, Data, Consulting, and Community. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional 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 2004, statements about the potential success of WholeView 2 and other product offerings, the ability to achieve all of the anticipated benefits from the acquisition of Giga Information Group, the amount of the charge and any cost savings related to reductions in force and associated actions, and the ability of Forrester to achieve success as the economy improves. 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 anticipate business and economic conditions, market trends, competition, the ability to attract and retain professional staff, possible variations in Forrester's quarterly operating results, risks associated with Forrester's ability to offer new products and services, the actual amount of the charge and any cost savings related to reductions in force and associated actions, 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. (C) 2004, Forrester Research, Inc. All rights reserved. Forrester and WholeView 2 are trademarks of Forrester Research, Inc. Forrester Research, Inc. Consolidated Statements Of Income - ---------------------------------------------------------------------- (In thousands, except per share data) Three months ended March 31, 2004 2003(2) -------------------- (Unaudited) Revenues Research services $22,989 $18,506 Advisory services and other 8,740 5,976 ----------- -------- Total revenues 31,729 24,482 Operating expenses Cost of services and fulfillment 13,139 9,525 Selling and marketing 11,060 7,752 General and administrative 3,411 3,308 Depreciation 1,031 1,693 Amortization of intangible assets 2,344 924 Reorganization costs 1,957 - ----------- -------- Total operating expenses 32,942 23,202 (Loss) income from operations (1,213) 1,280 Other income, net 826 1,595 Impairments of non-marketable investments - (300) ----------- -------- (Loss) income before income taxes (387) 2,575 Income tax (benefit) provision (130) 798 ----------- -------- Net (loss) income $(257) $1,777 =========== ======== Diluted (loss) income per share $(0.01) $0.08 =========== ======== Diluted weighted average shares outstanding 22,255 22,920 =========== ======== Basic (loss) income per share $(0.01) $0.08 =========== ======== Basic weighted average shares outstanding 22,255 22,739 =========== ======== Pro forma data (1): (Loss) income from operations $(1,213) $1,280 Amortization of intangible assets 2,344 924 Reorganization costs 1,957 - ----------- -------- Pro forma income from operations 3,088 2,204 Other income, net 826 1,595 ----------- -------- Pro forma income before income taxes 3,914 3,799 Pro forma income tax provision 1,370 1,330 ----------- -------- Pro forma net income $2,544 $2,469 =========== ======== Pro forma diluted earnings per share $0.11 $0.11 =========== ======== Diluted weighted average shares outstanding 22,771 22,920 =========== ======== (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 and other integration costs related to acquisitions, reorganization costs, and impairments of non- marketable investments, as well as their related tax effects. This does not purport to be prepared in accordance with Generally Accepted Accounting Principles. (2) Results for the three months ended March 31, 2003 reflect a $315,000 reclassification related to the fair value assessment of deferred revenue with regard to our purchase of Giga Information Group, Inc., which reduces research services revenues and reduces selling and marketing expenses in order to be consistent with the presentation for the year ended December 31, 2003. Forrester Research, Inc. Consolidated Balance Sheets - ---------------------------------------------------------------------- (In thousands) March 31, Dec. 31, 2004 2003 ----------- --------- (Unaudited) Assets: Cash and cash equivalents $38,431 $22,385 Marketable securities 89,331 104,348 Accounts receivable, net 25,342 40,013 Deferred commissions 5,799 5,999 Prepaid expenses and other current assets 8,277 7,079 ----------- --------- Total current assets 167,180 179,824 Property and equipment, net 7,769 8,266 Goodwill, net 56,858 57,006 Intangible assets, net 11,112 13,456 Deferred income taxes 40,097 40,159 Non-marketable investments and other assets 13,050 12,264 ----------- --------- Total assets $296,066 $310,975 =========== ========= Liabilities and stockholders' equity: Accounts payable $2,013 $2,566 Accrued expenses 25,535 31,457 Deferred revenue 67,233 68,630 ----------- --------- Total liabilities 94,781 102,653 Preferred stock - - Common stock 244 243 Additional paid-in capital 174,000 172,523 Retained earnings 66,688 66,945 Treasury stock, at cost (38,487) (30,300) Accumulated other comprehensive loss (1,160) (1,089) ----------- --------- Total stockholders' equity 201,285 208,322 ----------- --------- Total liabilities and stockholders' equity $296,066 $310,975 =========== ========= Forrester Research, Inc. Consolidated Statements Of Cash Flows - ---------------------------------------------------------------------- (In thousands) Three months ended March 31, 2004 2003 -------------------- (Unaudited) Cash flows from operations: Net (loss) income $(257) $1,777 Adjustments to reconcile net (loss) income to net cash provided by operating activities - Depreciation 1,031 1,693 Amortization of intangible assets 2,344 924 Write-down of non-marketable investment - 300 Tax benefit from stock options 90 81 Deferred income taxes (1) 728 Realized gain on sale of marketable securities - (509) Amortization of premiums on marketable securities 173 207 Changes in assets and liabilities, net of acquisition - Accounts receivable 15,586 5,803 Deferred commissions 200 192 Prepaid expenses and other current assets (872) (169) Accounts payable (658) (807) Accrued expenses (5,862) (5,657) Deferred revenue (2,295) (925) ----------- -------- Net cash provided by operating activities 9,479 3,638 Cash flows from investing activities: Acquisition of Giga Information Group, Inc., net of cash acquired - (51,549) Purchases of property and equipment (530) (69) Purchases of non-marketable investments (963) (1,250) Decrease in other assets 269 123 Purchase of marketable securities (34,060) (77,884) Proceeds from sales and maturities of marketable securities 49,150 144,196 ----------- -------- Net cash provided by investing activities 13,866 13,567 Cash flows from financing activities: Proceeds from exercises of employee stock options 512 523 Acquisition of treasury shares (6,187) (3,245) Structured stock repurchases (1,500) (2,000) ----------- -------- Net cash used in financing activities (7,175) (4,722) Effect of exchange rate changes on cash and cash equivalents (124) (46) ----------- -------- Net increase in cash and cash equivalents 16,046 12,437 Cash and cash equivalents, beginning of period 22,385 11,479 ----------- -------- Cash and cash equivalents, end of period $38,431 $23,916 =========== ======== CONTACT: Forrester Research, Inc. Kimberly Maxwell, 617-613-6234 Director, Investor Relations kmaxwell@forrester.com or Forrester Research, Inc. Karyl Levinson, 617-613-6262 Director, Corporate Communications press@forrester.com -----END PRIVACY-ENHANCED MESSAGE-----