EX-99.1 2 prftpressrelease_q42013.htm PERFICIENT, INC. PRESS RELEASE
EXHIBIT 99.1

For more information, please contact:
Bill Davis, Perficient, 314-529-3555
bill.davis@perficient.com

FOR IMMEDIATE DISTRIBUTION

PERFICIENT REPORTS FOURTH QUARTER AND FULL YEAR 2013 RESULTS
Quarterly services revenues up 20%, net income up 26%;
Provides 2014 Revenue Guidance of $430 to $450 Million and Adjusted Earnings Per Share Range of $1.26 to $1.36

SAINT LOUIS (March 6, 2014) – Perficient, Inc. (NASDAQ: PRFT) ("Perficient"), a leading information technology consulting firm serving Global 2000® and other large enterprise customers throughout North America, today reported its financial results for the quarter and year ended December 31, 2013.

Financial Highlights

For the quarter ended December 31, 2013:
·
Revenue increased 17% to $97.5 million from $83.1 million for the fourth quarter 2012;
·
Services revenue increased 20% to $86.0 million from $71.8 million for the fourth quarter 2012;
·
Adjusted earnings per share results (a non-GAAP measure; see attached schedule, which reconciles to GAAP earnings per share) on a fully diluted basis increased to $0.30 from $0.23 for the fourth quarter 2012;
·
Earnings per share results on a fully diluted basis increased to $0.17 from $0.14 for the fourth quarter 2012;
·
EBITDAS (a non-GAAP measure; see attached schedule, which reconciles to GAAP net income) increased to $15.7 million from $12.6 million for the fourth quarter 2012;
·
Net income increased 26% to $5.5 million from $4.4 million for the fourth quarter 2012; and
·
Perficient repurchased 152,000 shares of its common stock at a cost of $3.0 million.

For the year ended December 31, 2013:
·
Revenue increased 14% to $373.3 million from $327.1 million for 2012;
·
Services revenue increased 14% to $326.6 million from $286.5 million for 2012;
·
Adjusted earnings per share results (a non-GAAP measure; see attached schedule, which reconciles to GAAP earnings per share) on a fully diluted basis increased to $1.11 from $0.92 for 2012;
·
Earnings per share results on a fully diluted basis increased to $0.67 from $0.52 for 2012;
·
EBITDAS (a non-GAAP measure; see attached schedule, which reconciles to GAAP net income) increased to $56.6 million from $48.2 million for 2012;
·
Net income increased 33% to $21.4 million from $16.1 million for 2012; and
·
Perficient repurchased 1,313,000 shares of its common stock at a cost of $18.1 million.

"Perficient has significant momentum in the market as 2014 gets underway," said Jeffrey Davis, chief executive officer and president. "We continue to build our portfolio, grow our client roster and take share from competitors large and small incapable of delivering the value we do because they possess neither the breadth nor the depth we offer enterprise customers."

"Increasing average bill rates are driving margin expansion and we expect that trend to continue in 2014," said Paul Martin, chief financial officer. "We're well positioned for another year of solid revenue and earnings growth."


Other Highlights
Among other recent achievements, Perficient:

·
Completed the acquisition of ForwardThink Group Inc. on February 10, 2014, a $30 million annual services revenue management and technology consulting firm focused on the financial services industry. ForwardThink Group Inc. expands Perficient's financial services vertical, deepening Perficient's business process improvement, payments, finance transformation and risk management offerings;

·
Was awarded the 2014 IBM Collaboration Solution Award for Best Digital Experience for Perficient's commitment to investing in digital experience solutions for clients, helping them create and deliver customer experiences that are engaging and interactive; and

·
Added new customer relationships and follow-up projects with leading companies including:  Alliance Coal, Amway, Best Buy, Ceridian, Cheneire Energy, Memorial Hermann, New York Home Health Care, Oklahoma Gas and Electric, Plantronics, and many others.

Business Outlook
The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. See "Safe Harbor Statement" below.

Perficient expects its first quarter 2014 services and software revenue, including reimbursed expenses, to be in the range of $97.0 million to $104.2 million, comprised of $91.5 million to $96.2 million of revenue from services including reimbursed expenses and $5.5 million to $8.0 million of revenue from sales of software. The midpoint of first quarter 2014 services revenue guidance represents growth of 22% over first quarter 2013 services revenue.
 
Perficient is issuing full year revenue guidance range of $430 million to $450 million and an adjusted earnings per share guidance range of $1.26 to $1.36 for 2014.

Conference Call Details
Perficient will host a conference call regarding fourth quarter and full year 2013 financial results today at 10 a.m. Eastern.

WHAT: Perficient Reports Fourth Quarter and Full Year 2013 Results
WHEN: Thursday, March 6, 2014, at 10 a.m. Eastern
CONFERENCE CALL NUMBERS: 800-299-9630 (U.S. and Canada) 617-786-2904 (International)
PARTICIPANT PASSCODE: 15446734
REPLAY TIMES: Thursday, March 6, 2014, at 2 p.m. Eastern, through Thursday, March 13, 2014
REPLAY NUMBER: 888-286-8010 (U.S. and Canada) 617-801-6888 (International)
REPLAY PASSCODE: 68588636

About Perficient
Perficient is a leading information technology consulting firm serving Global 2000® and enterprise customers throughout North America. Perficient's professionals serve clients from a network of offices across North America and three offshore locations, in Eastern Europe, India, and China. Perficient helps clients use Internet-based technologies to improve productivity and competitiveness, strengthen relationships with customers, suppliers and partners, and reduce information technology costs. Perficient, traded on the Nasdaq Global Select Market, is a member of the Russell 2000® index and the S&P SmallCap 600 index. Perficient is an award-winning "Premier Level" IBM business partner, a Microsoft National Systems Integrator and Gold Certified Partner, an Oracle Platinum Partner, a Gold Salesforce.com Cloud Alliance Partner, a TeamTIBCO partner, and an EMC Select Services Team Partner. For more information, please visit www.perficient.com.


Safe Harbor Statement
Some of the statements contained in this news release that are not purely historical statements discuss future expectations or state other forward-looking information related to financial results and business outlook for 2014.  Those statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements.  The "forward-looking" information is based on management's current intent, belief, expectations, estimates, and projections regarding our company and our industry.  You should be aware that those statements only reflect our predictions.  Actual events or results may differ substantially.  Important factors that could cause our actual results to be materially different from the forward-looking statements include (but are not limited to) those disclosed under the heading "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2013 and the following:

(1)    the possibility that our actual results do not meet the projections and guidance contained in this news release;
(2)    the impact of the general economy and economic uncertainty on our business;
(3)    risks associated with the operation of our business generally, including:
a)
client demand for our services and solutions;
b)
maintaining a balance of our supply of skills and resources with client demand;
c)
effectively competing in a highly competitive market;
d)
protecting our clients' and our data and information;
e)
risks from international operations;
f)
obtaining favorable pricing to reflect services provided;
g)
adapting to changes in technologies and offerings; and
h)
risk of loss of one or more significant software vendors;
(4)    legal liabilities, including intellectual property protection and infringement or personally identifiable information;
(5)    risks associated with managing growth organically and through acquisitions; and
(6)    the risks detailed from time to time with our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.  This cautionary statement is provided pursuant to Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The forward-looking statements in this release are made only as of the date hereof and we undertake no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future.

 
About Non-GAAP Financial Information
This news release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), please see the section entitled "About Non-GAAP Financial Measures" and the accompanying tables entitled "Reconciliation of GAAP to Non-GAAP Measures."


PERFICIENT, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(unaudited)
 
(in thousands, except per share data)
 
 
 
   
   
   
 
 
 
Three Months Ended December 31,
   
Year Ended December 31,
 
 
 
2013
   
2012
   
2013
   
2012
 
 
 
   
   
   
 
Revenues
 
   
   
   
 
  Services
 
$
86,040
   
$
71,755
   
$
326,589
   
$
286,548
 
  Software and hardware
   
7,055
     
8,066
     
30,224
     
25,188
 
  Reimbursable expenses
   
4,370
     
3,307
     
16,512
     
15,360
 
Total revenues
   
97,465
     
83,128
     
373,325
     
327,096
 
 
                               
Cost of revenues
                               
   Project personnel costs
   
52,026
     
45,220
     
199,664
     
180,092
 
   Software and hardware costs
   
6,177
     
6,982
     
26,648
     
21,536
 
   Reimbursable expenses
   
4,370
     
3,307
     
16,512
     
15,360
 
   Other project related expenses
   
895
     
1,090
     
4,169
     
4,078
 
   Stock compensation
   
873
     
757
     
3,233
     
2,627
 
Total cost of revenues
   
64,341
     
57,356
     
250,226
     
223,693
 
 
                               
Gross margin
   
33,124
     
25,772
     
123,099
     
103,403
 
 
                               
Selling, general and administrative
   
18,329
     
13,943
     
69,706
     
57,838
 
Stock compensation
   
2,019
     
1,845
     
7,895
     
7,015
 
 
   
12,776
     
9,984
     
45,498
     
38,550
 
 
                               
Depreciation
   
928
     
661
     
3,262
     
2,251
 
Amortization
   
2,224
     
2,163
     
7,974
     
7,827
 
Acquisition costs
   
854
     
40
     
2,297
     
1,871
 
Adjustment to fair value of contingent consideration
   
184
     
82
     
287
     
517
 
Income from operations
   
8,586
     
7,038
     
31,678
     
26,084
 
 
                               
Net interest expense
   
(138
)
   
(12
)
   
(293
)
   
(143
)
Net other income (expense)
   
142
     
(5
)
   
112
     
44
 
Income before income taxes
   
8,590
     
7,021
     
31,497
     
25,985
 
Provision for income taxes
   
3,077
     
2,645
     
10,065
     
9,878
 
Net income 
 
$
5,513
   
$
4,376
   
$
21,432
   
$
16,107
 
 
                               
Basic earnings per share
 
$
0.18
   
$
0.14
   
$
0.71
   
$
0.54
 
Diluted earnings per share
 
$
0.17
   
$
0.14
   
$
0.67
   
$
0.52
 
 
                               
Shares used in computing basic earnings per share
   
30,314
     
30,326
     
30,294
     
29,536
 
Shares used in computing diluted earnings per share
   
32,155
     
31,811
     
31,808
     
31,086
 




PERFICIENT, INC.
 
CONSOLIDATED BALANCE SHEETS
 
(unaudited)
 
(in thousands)
 
 
 
   
 
 
 
December 31,
   
December 31,
 
 
 
2013
   
2012
 
ASSETS
 
   
 
Current assets:
 
   
 
   Cash and cash equivalents
 
$
7,018
   
$
5,813
 
   Accounts receivable, net
   
78,887
     
69,662
 
   Prepaid expenses
   
2,569
     
1,649
 
   Other current assets
   
6,759
     
3,717
 
Total current assets
   
95,233
     
80,841
 
Property and equipment, net
   
7,709
     
4,398
 
Goodwill
   
193,510
     
160,936
 
Intangible assets, net
   
25,487
     
17,350
 
Other non-current assets
   
3,810
     
3,669
 
Total assets
 
$
325,749
   
$
267,194
 
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
   Accounts payable
 
$
7,667
   
$
7,959
 
   Other current liabilities
   
30,298
     
20,605
 
Total current liabilities
   
37,965
     
28,564
 
   Long-term debt
   
19,000
     
2,800
 
   Other non-current liabilities
   
9,294
     
1,417
 
Total liabilities
   
66,259
     
32,781
 
 
               
Stockholders' equity:
               
Common stock
   
41
     
39
 
Additional paid-in capital
   
297,997
     
276,201
 
Accumulated other comprehensive loss
   
(378
)
   
(306
)
Treasury stock
   
(81,051
)
   
(62,970
)
Retained earnings 
   
42,881
     
21,449
 
Total stockholders' equity
   
259,490
     
234,413
 
Total liabilities and stockholders' equity
 
$
325,749
   
$
267,194
 

 


About Non-GAAP Financial Measures
Perficient provides non-GAAP financial measures for EBITDAS (earnings before interest, income taxes, depreciation, amortization, and stock compensation), adjusted net income, and adjusted earnings per share data as supplemental information regarding Perficient's business performance. Perficient believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of Perficient's past financial performance and future results. Perficient's management uses these non-GAAP financial measures when it internally evaluates the performance of Perficient's business and makes operating decisions, including internal operating budgeting, performance measurement, and the calculation of bonuses and discretionary compensation.  Management excludes stock-based compensation related to employee stock options and restricted stock awards, the amortization of intangible assets, acquisition costs, adjustments to the fair value of contingent consideration, and income tax effects of the foregoing, when making operational decisions.
Perficient believes that providing the non-GAAP financial measures to its investors is useful because it allows investors to evaluate Perficient's performance using the same methodology and information used by Perficient's management. Specifically, adjusted net income is used by management primarily to review business performance and determine performance-based incentive compensation for executives and other employees.  Management uses EBITDAS to measure operating profitability, evaluate trends, and make strategic business decisions.

Non-GAAP financial measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of discretionary judgment as to which charges are excluded from the non-GAAP financial measure. However, Perficient's management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of EBITDAS, adjusted net income, and adjusted earnings per share. In addition, some items that are excluded from adjusted net income and adjusted earnings per share can have a material impact on cash. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. Perficient has historically provided non-GAAP financial measures to the investment community as a supplement to its GAAP results to enable investors to evaluate Perficient's business performance in the way that management does. Perficient's definition may be different from similar non-GAAP financial measures used by other companies and/or analysts.

The non-GAAP adjustments, and the basis for excluding them, are outlined below:

Amortization of Intangible Assets
Perficient has incurred expense on amortization of intangible assets primarily related to various acquisitions. Management excludes these items for the purposes of calculating EBITDAS, adjusted net income, and adjusted earnings per share. Perficient believes that eliminating this expense from its non-GAAP financial measures is useful to investors because the amortization of intangible assets can be inconsistent in amount and frequency, and is significantly impacted by the timing and magnitude of Perficient's acquisition transactions, which also vary substantially in frequency from period to period.

Acquisition Costs
Perficient incurs transaction costs related to acquisitions which are expensed in its GAAP financial statements.  Management excludes these items for the purposes of calculating EBITDAS, adjusted net income, and adjusted earnings per share.  Perficient believes that excluding these expenses from its non-GAAP financial measures is useful to investors because these are expenses associated with each transaction, and are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult.


Adjustments to Fair Value of Contingent Consideration
Perficient is required to remeasure its contingent consideration liability related to acquisitions each reporting period until the contingency is settled.  Any changes in fair value are recognized in earnings.  Management excludes these items for the purposes of calculating adjusted net income and adjusted earnings per share.  Perficient believes that excluding these adjustments from its non-GAAP financial measures is useful to investors because they are related to acquisitions, and are inconsistent in amount and frequency from period to period.

Stock-Based Compensation
Perficient incurs stock-based compensation expense under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation.  Perficient excludes this item for the purposes of calculating EBITDAS, adjusted net income, and adjusted earnings per share because it is a non-cash expense, which Perficient believes is not reflective of its business performance. The nature of stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions, and different award types, making the comparison of current results with forward looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expense may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods.  Perficient believes that non-GAAP measures of profitability, which exclude stock-based compensation are widely used by analysts and investors.

PERFICIENT, INC.
 
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
 
(unaudited)
 
(in thousands, except per share data)
 
 
 
   
   
   
 
 
 
Three Months Ended December 31,
   
Year Ended December 31,
 
 
 
2013
   
2012
   
2013
   
2012
 
GAAP Net Income
 
$
5,513
   
$
4,376
   
$
21,432
   
$
16,107
 
    Additions:
                               
    Provision for income taxes
   
3,077
     
2,645
     
10,065
     
9,878
 
    Amortization
   
2,224
     
2,163
     
7,974
     
7,827
 
    Acquisition costs
   
854
     
40
     
2,297
     
1,871
 
    Adjustment to fair value of contingent consideration
   
184
     
82
     
287
     
517
 
    Stock compensation
   
2,892
     
2,602
     
11,128
     
9,642
 
Adjusted Net Income Before Tax
   
14,744
     
11,908
     
53,183
     
45,842
 
    Adjusted income tax (1)
   
5,205
     
4,549
     
17,923
     
17,237
 
Adjusted Net Income
 
$
9,539
   
$
7,359
   
$
35,260
   
$
28,605
 
 
                               
GAAP Earnings Per Share (diluted)
 
$
0.17
   
$
0.14
   
$
0.67
   
$
0.52
 
Adjusted Earnings Per Share (diluted)
 
$
0.30
   
$
0.23
   
$
1.11
   
$
0.92
 
Shares used in computing GAAP and Adjusted Earnings Per Share (diluted)
   
32,155
     
31,811
     
31,808
     
31,086
 

(1) The estimated adjusted effective tax rate of 35.3% and 38.2% for the three months ended December 31, 2013 and 2012, respectively, and 33.7% and 37.6% for the year ended December 31, 2013 and 2012, has been used to calculate the provision for income taxes for non-GAAP purposes





PERFICIENT, INC.
 
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
 
(unaudited)
 
(in thousands)
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
 
2013
 
2012
 
2013
 
2012
 
GAAP Net Income 
 
$
5,513
   
$
4,376
   
$
21,432
   
$
16,107
 
    Additions:
                               
    Provision for income taxes
   
3,077
     
2,645
     
10,065
     
9,878
 
    Net interest expense
   
138
     
12
     
293
     
143
 
    Net other expense (income)
   
(142
)
   
5
     
(112
)
   
(44
)
    Depreciation
   
928
     
661
     
3,262
     
2,251
 
    Amortization 
   
2,224
     
2,163
     
7,974
     
7,827
 
    Acquisition costs
   
854
     
40
     
2,297
     
1,871
 
    Adjustment to fair value of contingent consideration
   
184
     
82
     
287
     
517
 
    Stock compensation
   
2,892
     
2,602
     
11,128
     
9,642
 
EBITDAS (1)
 
$
15,668
   
$
12,586
   
$
56,626
   
$
48,192
 
(1) EBITDAS is a non-GAAP performance measure and is not intended to be a performance measure that should be regarded as an alternative to or more meaningful than either GAAP operating income or GAAP net income. EBITDAS measures presented may not be comparable to similarly titled measures presented by other companies.