~ Company reaffirms full-year revenue and
earnings guidance;
expects second quarter sequential earnings
growth of more than 100 percent ~
Perficient, Inc. (NASDAQ: PRFT) (“Perficient”), a leading
information technology and management consulting firm serving
Global 2000® and other large enterprise customers throughout North
America, today reported its financial results for the quarter ended
March 31, 2017.
Financial Highlights
For the quarter ended March 31, 2017:
- Revenue decreased 10% to $111.0 million
from $123.8 million for the first quarter 2016;
- Services revenue decreased 8% to $100.9
million from $109.7 million for the first quarter 2016;
- Gross margin decreased 10% to $36.1
million from $40.2 million for the first quarter 2016;
- Net income decreased 50% to $2.7
million from $5.4 million for the first quarter 2016;
- GAAP earnings per share results on a
fully diluted basis decreased to $0.08 from $0.16 for the first
quarter 2016;
- Adjusted earnings per share results (a
non-GAAP measure; see attached schedule, which reconciles to GAAP
earnings per share) on a fully diluted basis decreased to $0.24
from $0.29 for the first quarter 2016; and
- EBITDAS (a non-GAAP measure; see
attached schedule, which reconciles to GAAP net income) decreased
to $14.1 million from $17.2 million for the first quarter
2016.
“We expect solid year-to-date bookings, coupled with a strong
pipeline, to drive accelerating momentum in the second quarter and
second half of 2017,” said Jeffrey Davis, chief executive officer
and president. “That business strength, coupled with several
precise and prescriptive strategic internal initiatives underway,
will drive meaningful margin expansion in the quarters ahead.”
Other Highlights
Among other recent achievements, Perficient:
- Became one of only six Adobe Premier
Partners worldwide;
- Received the prestigious 2017 Magento
Imagine Excellence Award for Best B2B Experience honoring
Perficient Digital’s work with Carrier Enterprise on a website that
improved the HVAC aftermarket parts retailer’s online sales and
tripled online transactions;
- Became one of only 10 Global Elite
Consulting Partners for Xamarin, a leader in the native
cross-platform application development market, emphasizing the
ability to design and create award-winning apps that push
boundaries and produce exceptional customer experiences;
- Received two Web Marketing Association
2017 Internet Advertising Competition awards for innovative digital
experiences delivered by Perficient Digital to Carhartt, the
workwear clothing company, and The Henry Ford history museum;
- Was honored by Sitecore with six
Perficient colleagues named to the customer experience management
company’s 2017 Most Valuable Professionals list; and
- Added new customer relationships and
follow-on projects with leading companies such as Ashley’s
Furniture, Carrier Enterprise, DigitalGlobe, Emerson, Hulu, Joann’s
Fabrics, Tokio Marine HCC, and VF Corp.
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 second quarter 2017 services and software
revenue, including reimbursed expenses, to be in the range of
$111.0 million to $123.5 million, comprised of $106.0 million to
$112.5 million of revenue from services, including reimbursed
expenses, and $5.0 million to $11.0 million of revenue from sales
of software. Second quarter adjusted earnings per share (a non-GAAP
measure; see attached schedule which reconciles to GAAP earnings
per share guidance) is expected to be in the range of $0.29 to
$0.31.
Perficient reaffirms its full year 2017 revenue guidance range
of $485 million to $515 million, 2017 GAAP earnings per share
guidance range of $0.60 to $0.75, and 2017 adjusted earnings per
share guidance range of $1.17 to $1.31.
Conference Call Details
Perficient will host a conference call regarding first quarter
2017 financial results today at 10 a.m. Eastern.
WHAT:
Perficient Reports First Quarter 2017 Results
WHEN:
Thursday, May 4, 2017, at 10 a.m. Eastern
CONFERENCE CALL NUMBERS:
855-246-0403 (U.S. and Canada); 414-238-9806 (International)
PARTICIPANT PASSCODE:
4016678
REPLAY TIMES:
Thursday, May 4, 2017, at 1 p.m. Eastern, through Thursday, May 11,
2017, at 1 p.m.
REPLAY NUMBER:
855-859-2056 (U.S. and Canada); 404-537-3406 (International)
REPLAY PASSCODE:
4016678
About Perficient
Perficient is the leading digital transformation consulting firm
serving Global 2000® and enterprise customers throughout North
America. With unparalleled information technology, management
consulting, and creative capabilities, Perficient and its
Perficient Digital agency deliver vision, execution, and value with
outstanding digital experience, business optimization, and industry
solutions. Our work enables clients to improve productivity and
competitiveness; grow and strengthen relationships with customers,
suppliers, and partners; and reduce costs. Perficient’s
professionals serve clients from a network of offices across North
America and offshore locations in India and China. Traded on the
Nasdaq Global Select Market, Perficient 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 Service Provider and Gold Certified Partner, an Oracle
Platinum Partner, an Adobe Premier Partner, and a Platinum
Salesforce Consulting Partner. For more information, 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 2017. 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 most recently filed annual report
on Form 10-K, 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 uncertainties resulting from changes
to policies and laws following the U.S. elections in November
2016;
(4) 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
including fluctuations in exchange rates;
f) changes to immigration policies;
g) obtaining favorable pricing to reflect
services provided;
h) adapting to changes in technologies and
offerings;
i) risk of loss of one or more significant
software vendors;
j) making appropriate estimates and
assumptions in connection with preparing our consolidated financial
statements;
k) maintaining effective internal controls;
and
l) changes to tax levels, audits,
investigations, tax laws or their interpretation;
(5) legal liabilities, including intellectual property
protection and infringement or the disclosure of personally
identifiable information;
(6) risks associated with managing growth organically and
through acquisitions; and
(7) the risks detailed from time to time within 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.
PERFICIENT, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended March 31,
2017 2016 Revenues Services $
100,888 $ 109,747 Software and hardware 6,998 9,476 Reimbursable
expenses 3,133 4,620 Total revenues
111,019 123,843
Cost of revenues (exclusive of
depreciation and amortization, shown separately below)
Cost of services 64,480 70,175 Software and hardware costs 5,965
7,412 Reimbursable expenses 3,133 4,620 Stock compensation
1,366 1,412 Total cost of revenues 74,944
83,619 Gross margin 36,075 40,224
Selling, general and administrative 23,368 24,473 Stock
compensation 2,316 2,241 Total selling,
general and administrative 25,684 26,714 Depreciation 1,259
1,192 Amortization 3,625 3,365 Acquisition costs 490 243 Adjustment
to fair value of contingent consideration 158
238 Income from operations 4,859 8,472
Net interest expense 347 520 Net other (income) expense (18
) 103 Income before income taxes 4,530 7,849 Provision for
income taxes 1,821 2,443 Net income $ 2,709
$ 5,406 Basic earnings per share $ 0.08 $ 0.16
Diluted earnings per share $ 0.08 $ 0.16 Shares used in
computing basic earnings per share 33,383 33,911 Shares used in
computing diluted earnings per share 34,294 34,842
PERFICIENT, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
March 31, December
31, 2017 2016 ASSETS Current assets: Cash
and cash equivalents $ 10,887 $ 10,113 Accounts receivable, net
87,650 103,702 Prepaid expenses 4,721 3,353 Other current assets
5,924 5,331 Total current assets
109,182 122,499 Property and equipment, net 8,137 8,888 Goodwill
281,241 275,205 Intangible assets, net 46,764 45,115 Other
non-current assets 5,210 4,869 Total
assets $ 450,534 $ 456,576
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
9,984 $ 18,416 Other current liabilities 22,956
27,637 Total current liabilities 32,940 46,053
Long-term debt 38,500 32,000 Other non-current liabilities
20,835 19,058 Total liabilities 92,275 97,111
Stockholders' equity: Common stock 46 46 Additional paid-in
capital 385,280 379,094 Accumulated other comprehensive loss (2,427
) (2,743 ) Treasury stock (136,859 ) (126,442 ) Retained earnings
112,219 109,510 Total stockholders'
equity 358,259 359,465 Total
liabilities and stockholders' equity $ 450,534 $ 456,576
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.”
About Non-GAAP Financial Measures
Perficient provides non-GAAP financial measures for EBITDAS
(earnings before interest, income taxes, depreciation,
amortization, stock compensation, acquisition costs, and adjustment
to fair value of contingent consideration), 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, net
other income and expense, 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 merger and
acquisition-related activities 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 EBITDAS, 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 stock-based compensation expense and the
related tax effects for the purposes of calculating EBITDAS,
adjusted net income, and adjusted earnings per share because
stock-based compensation 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 March 31,
2017 2016 GAAP Net Income $ 2,709 $
5,406 Adjustments: Provision for income taxes 1,821 2,443
Amortization 3,625 3,365 Acquisition costs 490 243 Adjustment to
fair value of contingent consideration 158 238 Stock compensation
3,682 3,653 Adjusted Net Income Before Tax 12,485
15,348 Adjusted income tax (1) 4,395 5,372 Adjusted
Net Income $ 8,090 $ 9,976 GAAP Earnings Per Share (diluted)
$ 0.08 $ 0.16 Adjusted Earnings Per Share (diluted) $ 0.24 $ 0.29
Shares used in computing GAAP and Adjusted Earnings Per Share
(diluted) 34,294 34,842
(1) The estimated adjusted effective tax rate of 35.2% and 35.0%
for the three months ended March 31, 2017 and 2016, respectively,
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 March 31,
2017 2016 GAAP Net Income $ 2,709 $
5,406 Adjustments: Provision for income taxes 1,821 2,443 Net
interest expense 347 520 Net other (income) expense (18 ) 103
Depreciation 1,259 1,192 Amortization 3,625 3,365 Acquisition costs
490 243 Adjustment to fair value of contingent consideration 158
238 Stock compensation 3,682 3,653 EBITDAS (1)
$ 14,073 $ 17,163
(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.
PERFICIENT, INC. RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(unaudited)
Q2 2017 Full
Year 2017
Low end ofadjusted goal
High end ofadjusted goal
Low end ofadjusted goal
High end ofadjusted goal
GAAP EPS $ 0.15 $ 0.18 $ 0.60 $ 0.75 Non-GAAP adjustment (1):
Non-GAAP reconciling items 0.22 0.21 0.89 0.87 Tax effect of
reconciling items (0.08 ) (0.08 ) (0.32 )
(0.31 ) Adjusted EPS $ 0.29 $ 0.31 $ 1.17
$ 1.31
(1) Non-GAAP adjustment represents the impact of amortization
expense, stock compensation, acquisition costs, and adjustments to
fair value of contingent consideration, net of the tax effect of
these adjustments, divided by fully diluted shares. Perficient
currently expects its Q2 2017 and full year 2017 GAAP effective
income tax rate to be 33.5% and 34.0%, respectively.
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version on businesswire.com: http://www.businesswire.com/news/home/20170504005684/en/
PerficientBill Davis, 314-529-3555bill.davis@perficient.com
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