EX-99.1 2 d767010dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO    FOR IMMEDIATE RELEASE

Forrester Research Reports Second-Quarter Financial Results

Cambridge, Mass., July 30, 2014 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its 2014 second-quarter financial results.

Second-Quarter Financial Performance

Total revenues were $82.9 million for the second quarter of 2014, compared with $79.0 million for the second quarter of 2013. Research revenues increased 2%, and advisory services and event revenues increased 11%, compared with the second quarter of 2013.

On a GAAP basis, net income was $4.3 million, or $0.23 per diluted share, for the second quarter of 2014, compared with net income of $6.2 million, or $0.28 per diluted share, for the same period in 2013.

On a pro forma basis, net income was $6.2 million, or $0.32 per diluted share, for the second quarter of 2014, which reflects a pro forma effective tax rate of 38%. Pro forma net income excludes stock-based compensation of $1.2 million, amortization of $0.5 million of acquisition-related intangible assets, and reorganization costs of $1.0 million. This compares with pro forma net income of $7.2 million, or $0.33 per diluted share, for the same period in 2013, which reflects a pro forma tax rate of 39%. Pro forma net income for the second quarter of 2013 excludes stock-based compensation of $0.9 million, amortization of $0.6 million of acquisition-related intangible assets, reorganization costs of $0.3 million, and net investment gains of $0.1 million.

“Forrester met our revenue and EPS guidance for the second quarter,” said George F. Colony, Forrester’s chairman and chief executive officer. “We are seeing continued traction as the market responds to our focus on helping clients win, serve, and retain digitally empowered customers. With the largest parts of the business performing well, we are raising our full-year revenue and EPS guidance.”

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables. Forrester is providing third-quarter 2014 financial guidance as follows:

Third-Quarter 2014 (GAAP):

 

  •   Total revenues of approximately $73.0 million to $76.0 million.

 

  •   Operating margin of approximately 5.5% to 7.5%.

 

  •   Other income, net of zero.

 

  •   An effective tax rate of 39%.

 

  •   Diluted earnings per share of approximately $0.14 to $0.18.

Third-Quarter 2014 (Pro Forma):

Pro forma financial guidance for the third quarter of 2014 excludes stock-based compensation expense of $1.9 million to $2.1 million, amortization of acquisition-related intangible assets of approximately $0.5 million, and any investment gains or losses.

 

  •   Pro forma operating margin of approximately 9.0% to 11.0%.

 

  •   Pro forma effective tax rate of 38%.

 

  •   Pro forma diluted earnings per share of approximately $0.22 to $0.26.

Our full-year 2014 guidance is as follows:

Full-Year 2014 (GAAP):

 

  •   Total revenues of approximately $310.0 million to $315.0 million.

 

  •   Operating margin of approximately 5.5% to 6.5%.

 

  •   Other income, net of zero.

 

  •   An effective tax rate of 39%.

 

  •   Diluted earnings per share of approximately $0.58 to $0.64.

Full-Year 2014 (Pro Forma):

Pro forma financial guidance for full-year 2014 excludes stock-based compensation expense of $7.0 million to $7.5 million, reorganization costs of approximately $1.9 million, amortization of acquisition-related intangible assets of approximately $2.2 million, and any investment gains or losses.

 

  •   Pro forma operating margin of approximately 9.0% to 10.0%.

 

  •   Pro forma effective tax rate of 38%.

 

  •   Pro forma diluted earnings per share of approximately $0.95 to $1.01.

Quarterly Dividend

Forrester also announced today that its board of directors has approved a quarterly dividend of $0.16 per share payable September 17, 2014, to shareholders of record on September 3, 2014.

About Forrester Research

Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. 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 guidance for the third 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 Forrester under its announced share repurchase program. Dividend declarations are at the discretion of Forrester’s board of directors, and plans for future dividends may be revised by the board at any time. 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 and the table of key financial data are attached.

Contact:

Michael Doyle

Chief Financial Officer

Forrester Research, Inc.

+1 617.613.6000

mdoyle@forrester.com

Jon Symons

Vice President, Corporate Communications

Forrester Research, Inc.

+ 1 617.613.6104

press@forrester.com

© 2014, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

Forrester Research, Inc.

Consolidated Statements of Income

 

(Unaudited, in thousands, except per share data)

 

     Three Months Ended
June 30,		     Six Months Ended
June 30,		  
     2014      2013     2014      2013  

Revenues:

           

Research services

    $ 52,322       $ 51,312      $ 103,115       $ 101,590   

Advisory services and other

      30,625         27,641        52,903         48,724   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total revenues

      82,947         78,953        156,018         150,314   
  

 

 

     

 

 

    

 

 

     

 

 

  

Operating expenses:

           

Cost of services and fulfillment

      33,558         30,786        63,038         57,813   

Selling and marketing

      28,630         26,789        58,513         53,846   

General and administrative

      9,815         8,420        19,342         17,907   

Depreciation

      2,289         2,302        5,062         4,662   

Amortization of intangible assets

      536         554        1,075         1,113   

Reorganization costs

      1,039         314        1,888         1,905   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total operating expenses

      75,867         69,165        148,918         137,246   
  

 

 

     

 

 

    

 

 

     

 

 

  

Income from operations

      7,080         9,788        7,100         13,068   

Other income, net

      79         255        15         631   

Gains (losses) on investments, net

      43         98        80         (102 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Income before income taxes

      7,202         10,141        7,195         13,597   

Income tax provision

      2,913         3,956        2,972         5,243   
  

 

 

     

 

 

    

 

 

     

 

 

  

Net Income

    $ 4,289       $ 6,185      $ 4,223       $ 8,354   
  

 

 

     

 

 

    

 

 

     

 

 

  

Diluted income per share

    $ 0.23       $ 0.28      $ 0.22       $ 0.38   
  

 

 

     

 

 

    

 

 

     

 

 

  

Diluted weighted average shares outstanding

      19,044         21,747        19,479         22,202   
  

 

 

     

 

 

    

 

 

     

 

 

  

Basic income per share

    $ 0.23       $ 0.29      $ 0.22       $ 0.38   
  

 

 

     

 

 

    

 

 

     

 

 

  

Basic weighted average shares outstanding

      18,757         21,256        19,184         21,781   
  

 

 

     

 

 

    

 

 

     

 

 

  

Pro forma data (1):

           

Income from operations

    $ 7,080       $ 9,788      $ 7,100       $ 13,068   

Amortization of intangible assets

      536         554        1,075         1,113   

Reorganization costs

      1,039         314        1,888         1,905   

Stock-based compensation included in the following expense categories:

           

Cost of services and fulfillment

      798         743        1,871         1,647   

Selling and marketing

      127         150        465         572   

General and administrative

      293         (25 )      829         509   
  

 

 

     

 

 

    

 

 

     

 

 

  

Pro forma income from operations

      9,873         11,524        13,228         18,814   

Other income, net

      79         255        15         631   
  

 

 

     

 

 

    

 

 

     

 

 

  

Pro forma income before income taxes

      9,952         11,779        13,243         19,445   

Pro forma income tax provision

      3,782         4,594        5,032         7,584   
  

 

 

     

 

 

    

 

 

     

 

 

  

Pro forma net income

    $ 6,170       $ 7,185      $ 8,211       $ 11,861   
  

 

 

     

 

 

    

 

 

     

 

 

  

Pro forma diluted income per share

    $ 0.32       $ 0.33      $ 0.42       $ 0.53   
  

 

 

     

 

 

    

 

 

     

 

 

  

Diluted weighted average shares outstanding

      19,044         21,747        19,479         22,202   
  

 

 

     

 

 

    

 

 

     

 

 

  

 

(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.

Key Financial Data

 

(Unaudited, dollars in thousands)

 

     June 30,
2014		     December 31,
2013		  

Balance sheet data:

     

Cash, cash equivalents and marketable investments

    $ 133,658      $ 155,145   

Accounts receivable, net

    $ 41,182      $ 77,543   

Deferred revenue

    $ 143,938      $ 152,903   
     Six Months Ended
June 30,		  
     2014     2013  

Cash flow data:

     

Net cash provided by operating activities

    $ 35,281      $ 37,231   

Purchases of property and equipment

    $ (871 )    $ (1,267 ) 

Repurchases of common stock

    $ (54,940 )    $ (92,083 ) 

Dividends paid

    $ (6,128 )    $ (6,414 ) 
     As of
June 30,		  
     2014     2013  

Metrics:

     

Agreement value

    $ 225,470      $ 211,025   

Client retention

      75 %      76 % 

Dollar retention

      87 %      89 % 

Enrichment

      97 %      95 % 

Number of clients

      2,439        2,451   
     As of
June 30,		  
     2014     2013  

Headcount:

     

Total headcount

      1,306        1,235   

Research and consulting staff

      489        442   

Sales staff

      500        469