EX-99.1 2 d304723dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Forrester Research Reports 2016 Fourth-Quarter And Full-Year Financial Results

Cambridge, Mass., February 8, 2017…Forrester Research, Inc. (Nasdaq: FORR) today announced its 2016 fourth-quarter and full-year financial results.

Fourth-Quarter Financial Performance

Total revenues were $83.4 million for the fourth quarter of 2016, compared with $81.0 million for the fourth quarter of 2015. Research revenues increased 1%, and advisory services and events revenues increased 7%, compared with the fourth quarter of 2015.

On a GAAP basis, net income was $5.8 million, or $0.31 per diluted share, for the fourth quarter of 2016, compared with net income of $2.0 million, or $0.11 per diluted share, for the same period in 2015.

On a pro forma basis, net income was $7.1 million, or $0.38 per diluted share, for the fourth quarter of 2016, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $2.2 million, amortization of acquisition-related intangible assets of $0.2 million, and net investment gains of $0.3 million. This compares with pro forma net income of $4.3 million, or $0.24 per diluted share, for the same period in 2015, which reflects a pro forma tax rate of 38%. Pro forma net income for the fourth quarter of 2015 excludes stock-based compensation of $2.5 million, amortization of acquisition-related intangible assets of $0.2 million, and net investment losses of $0.3 million.

“Forrester attained revenue guidance for 2016 while exceeding its operating income and EPS guidance for the fourth quarter and full year,” said George F. Colony, Forrester’s chairman and chief executive officer. “In 2017, the company will complete the rollout of its new selling model and accelerate the digitization of its product lines. These efforts will enable the company to reach double-digit growth in 2018 and beyond.”

Year Ended December 31, 2016, Financial Performance

Total revenues were $326.1 million, compared with $313.7 million for the same period in 2015. Research revenues increased 2%, and advisory services and events revenues increased 7%, compared with 2015.

On a GAAP basis, net income was $17.7 million, or $0.97 per diluted share, for 2016, compared with net income of $12.0 million, or $0.66 per diluted share, for 2015.

On a pro forma basis, net income was $24.8 million, or $1.36 per diluted share, for 2016, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $8.0 million, amortization of acquisition-related intangible assets of $0.8

million, reorganization costs of $1.0 million, and net investment losses of $0.8 million. This compares with pro forma net income of $20.5 million, or $1.13 per diluted share, for 2015, which reflects a pro forma tax rate of 38%. Pro forma net income for 2015 excludes stock-based compensation of $8.3 million, amortization of acquisition-related intangible assets of $0.9 million, and reorganization costs of $4.4 million.

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.

2017 Guidance

Forrester is providing first-quarter 2017 financial guidance as follows:

First-Quarter 2017 (GAAP):

 

  •   Total revenues of approximately $74.5 million to $77.5 million.
  •   Operating margin of approximately 2.0% to 4.0%.
  •   Other income, net of zero.
  •   An effective tax rate of 40%.
  •   Diluted earnings per share of approximately $0.05 to $0.09.

First-Quarter 2017 (Pro Forma):

Pro forma financial guidance for the first quarter of 2017 excludes stock-based compensation expense of $2.0 million to $2.2 million, amortization of acquisition-related intangible assets of approximately $0.2 million, and any investment gains or losses.

 

  •   Pro forma operating margin of approximately 5.0% to 7.0%.
  •   Pro forma effective tax rate of 40%.
  •   Pro forma diluted earnings per share of approximately $0.12 to $0.16.

Our full-year 2017 guidance is as follows:

Full-Year 2017 (GAAP):

 

  •   Total revenues of approximately $324.0 million to $332.0 million.
  •   Operating margin of approximately 7.8% to 8.8%.
  •   Other income, net of zero.
  •   An effective tax rate of 40%.
  •   Diluted earnings per share of approximately $0.84 to $0.91.

Full-Year 2017 (Pro Forma):

Pro forma financial guidance for full-year 2017 excludes stock-based compensation expense of $7.8 million to $8.3 million, amortization of acquisition-related intangible assets of approximately $0.8 million, and any investment gains or losses.

 

  •   Pro forma operating margin of approximately 10.5% to 11.5%.
  •   Pro forma effective tax rate of 40%.
  •   Pro forma diluted earnings per share of approximately $1.13 to $1.20.

Quarterly Dividend

Forrester is announcing today that its board of directors has authorized a 6% increase to its regular quarterly dividend from $0.18 per share to $0.19 per share. The next dividend of $0.19 per share is payable March 15, 2017, to shareholders of record on March 1, 2017.

About Forrester Research

Forrester Research is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 500,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, visit 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 first quarter of and full-year 2017, statements about the success of operational improvements, 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

Meaghan Rhyasen

Public Relations

Forrester Research, Inc.

+1 617-613-6070

press@forrester.com

 

 

© 2017, 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
December 31,		     Year Ended
December 31,		  
     2016      2015     2016     2015  

Revenues:

          

Research services

    $ 54,218       $ 53,601      $ 215,216      $ 210,268   

Advisory services and events

      29,228         27,374        110,879        103,458   
  

 

 

     

 

 

    

 

 

    

 

 

  

Total revenues

      83,446         80,975        326,095        313,726   

Operating expenses:

          

Cost of services and fulfillment

      32,746         33,718        128,175        126,261   

Selling and marketing

      29,408         30,509        116,898        116,081   

General and administrative

      10,220         10,477        40,579        39,041   

Depreciation

      1,830         1,941        7,812        8,192   

Amortization of intangible assets

      204         222        831        891   

Reorganization costs

      —           —          1,026        4,433   
  

 

 

     

 

 

    

 

 

    

 

 

  

Total operating expenses

      74,408         76,867        295,321        294,899   

Income from operations

      9,038         4,108        30,774        18,827   

Other income, net

      366         169        740        511   

Gains (losses) on investments, net

      334         (254 )      (805 )      (18 ) 
  

 

 

     

 

 

    

 

 

    

 

 

  

Income before income taxes

      9,738         4,023        30,709        19,320   

Income tax provision

      3,948         2,003        13,058        7,324   
  

 

 

     

 

 

    

 

 

    

 

 

  

Net income

    $ 5,790       $ 2,020      $ 17,651      $ 11,996   
  

 

 

     

 

 

    

 

 

    

 

 

  

Diluted income per common share

    $ 0.31       $ 0.11      $ 0.97      $ 0.66   
  

 

 

     

 

 

    

 

 

    

 

 

  

Diluted weighted average shares outstanding

      18,572         17,879        18,269        18,143   
  

 

 

     

 

 

    

 

 

    

 

 

  

Basic income per common share

    $ 0.32       $ 0.11      $ 0.98      $ 0.67   
  

 

 

     

 

 

    

 

 

    

 

 

  

Basic weighted average shares outstanding

      18,248         17,750        17,984        17,927   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma data (1):

          

Income from operations

    $ 9,038       $ 4,108      $ 30,774      $ 18,827   

Amortization of intangible assets

      204         222        831        891   

Reorganization costs

      —           —          1,026        4,433   

Stock-based compensation included in the following expense categories:

          

Cost of services and fulfillment

      1,290         1,355        4,431        4,573   

Selling and marketing

      359         398        1,054        1,152   

General and administrative

      596         709        2,491        2,622   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma income from operations

      11,487         6,792        40,607        32,498   

Other income, net

      366         169        740        511   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma income before income taxes

      11,853         6,961        41,347        33,009   

Pro forma income tax provision

      4,741         2,645        16,539        12,543   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma net income

    $ 7,112       $ 4,316      $ 24,808      $ 20,466   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma diluted income per share

    $ 0.38       $ 0.24      $ 1.36      $ 1.13   
  

 

 

     

 

 

    

 

 

    

 

 

  

Pro forma diluted weighted average shares outstanding

      18,572         17,879        18,269        18,143   
  

 

 

     

 

 

    

 

 

    

 

 

  

 

(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)

 

     December 31,
2016		     December 31,
2015		  

Balance sheet data:

     

Cash, cash equivalents and marketable investments

    $ 138,105      $ 101,106   

Accounts receivable, net

    $ 58,812      $ 67,355   

Deferred revenue

    $ 134,265      $ 140,676   
     Year Ended
December 31,		  
     2016     2015  

Cash flow data:

     

Net cash provided by operating activities

    $ 41,858      $ 32,466   

Purchases of property and equipment

    $ (4,140 )    $ (3,931 ) 

Repurchases of common stock

    $ (1,791 )    $ (20,931 ) 

Dividends paid

    $ (12,987 )    $ (12,179 ) 
     As of
December 31,		  
     2016     2015  

Metrics:

     

Agreement value

    $ 238,400      $ 237,000   

Client retention

      75 %      77 % 

Dollar retention

      87 %      89 % 

Enrichment

      93 %      98 % 

Number of clients

      2,432        2,471   
     As of
December 31,		  
     2016     2015  

Headcount:

     

Total headcount

      1,378        1,345   

Research and consulting staff

      520        499   

Sales staff

      523        524