CAMBRIDGE, Mass., Oct. 24,
2018 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR)
today announced its 2018 third-quarter financial results.
Third-Quarter Financial Performance
Total revenues were $84.9 million
for the third quarter of 2018, compared with $80.4 million for the third quarter of 2017.
Research revenues increased 4%, and advisory services and events
revenues increased 9%, compared with the third quarter of 2017.
On a GAAP basis, net income was $4.0
million, or $0.21 per diluted
share, for the third quarter of 2018, compared with net income of
$4.0 million, or $0.22 per diluted share, for the same period in
2017.
On a pro forma basis, net income was $6.0
million, or $0.33 per diluted
share, for the third quarter of 2018, which reflects a pro forma
effective tax rate of 31%. Pro forma net income excludes
stock-based compensation of $2.1
million, amortization of acquisition-related intangible
assets of $0.4 million, and
acquisition and integration costs of $1.0
million. This compares with pro forma net income of
$5.6 million, or $0.31 per diluted share, for the same period in
2017, which reflects a pro forma tax rate of 40%. Pro forma net
income for the third quarter of 2017 excludes stock-based
compensation of $2.2 million,
amortization of acquisition-related intangible assets of
$0.2 million, and net investment
losses of $0.8 million.
"Forrester met revenue and operating margin guidance while
exceeding EPS guidance for the third quarter of 2018," said
George F. Colony, Forrester's
chairman and chief executive officer. "Our strategy continues to
show results. We remain positive about our momentum and growth as
we head into the fourth quarter."
Forrester is providing fourth-quarter 2018 financial guidance as
follows:
Fourth-Quarter 2018 (GAAP):
- Total revenues of approximately $95.0
million to $98.0 million.
- Operating margin of approximately 9.5% to 11.5%.
- Other income (expense), net of zero.
- An effective tax rate of 33%.
- Diluted earnings per share of approximately $0.36 to $0.39.
Fourth-Quarter 2018 (Pro Forma):
Pro forma financial guidance for the fourth quarter of 2018
excludes stock-based compensation expense of $2.1 million to $2.3
million, acquisition and integration costs of $0.5 million to $0.7
million, amortization of acquisition-related intangible
assets of $0.4 million to
$0.5 million, and any investment
gains or losses.
- Pro forma operating margin of approximately 13.0% to
15.0%.
- Pro forma effective tax rate of 31%.
- Pro forma diluted earnings per share of approximately
$0.49 to $0.52.
Our full-year 2018 guidance is as follows:
Full-Year 2018 (GAAP):
- Total revenues of approximately $354.0
million to $357.0
million.
- Operating margin of approximately 6.5% to 7.5%.
- Other income (expense), net of $0.5
million.
- An effective tax rate of 31%.
- Diluted earnings per share of approximately $0.91 to $0.94.
Full-Year 2018 (Pro Forma):
Pro forma financial guidance for full-year 2018 excludes
stock-based compensation expense of $8.3
million to $8.5 million,
acquisition and integration costs of $1.8
million to $2.0 million,
amortization of acquisition-related intangible assets of
$1.2 million to $1.3 million, and any investment gains or
losses.
- Pro forma operating margin of approximately 9.5% to 10.5%.
- Pro forma effective tax rate of 31%.
- Pro forma diluted earnings per share of approximately
$1.33 to $1.36.
Quarterly Dividend
Forrester also announced today that its board of directors has
approved a quarterly cash dividend of $0.20 per share, payable December 26, 2018, to shareholders of record on
December 12, 2018.
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 675,000 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 fourth quarter of and full-year 2018,
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, demand for advisory and
consulting services, technology spending, Forrester's ability to
respond to business and economic conditions and market trends,
Forrester's ability to develop and offer new products and services,
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, Forrester's ability to realize the anticipated
benefits from recent internal reorganizations, the possibility of
network disruptions and security breaches, Forrester's ability to
enforce and protect its intellectual property, and possible
variations in Forrester's quarterly operating results. 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
© 2018, Forrester Research, Inc. All rights reserved.
Forrester is a trademark of Forrester Research, Inc.
Forrester
Research, Inc.
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Consolidated
Statements of Income
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(Unaudited, In
thousands, except per share data)
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Three Months
Ended
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Nine Months
Ended
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September 30,
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September 30,
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2018
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2017
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2018
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2017
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Revenues:
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Research
services
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$
56,332
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$
54,235
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$
166,332
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$
160,553
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Advisory services and
events
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28,558
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26,134
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92,660
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86,743
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Total
revenues
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84,890
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80,369
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258,992
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247,296
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Operating
expenses:
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Cost of services and
fulfillment
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34,361
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32,508
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107,537
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100,814
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Selling and
marketing
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31,051
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29,225
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96,771
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90,355
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General and
administrative
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11,192
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10,083
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32,871
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30,672
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Depreciation
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1,965
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1,607
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6,056
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4,775
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Amortization of
intangible assets
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402
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197
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770
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582
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Acquisition and
integration costs
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977
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—
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1,306
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—
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Total operating
expenses
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79,948
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73,620
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245,311
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227,198
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Income from
operations
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4,942
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6,749
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13,681
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20,098
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Other income,
net
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319
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146
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472
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248
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Losses on
investments
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(17)
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(772)
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(62)
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(997)
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Income before
income taxes
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5,244
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6,123
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14,091
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19,349
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Income tax
expense
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1,294
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2,170
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4,086
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6,302
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Net
income
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$
3,950
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$
3,953
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$
10,005
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$
13,047
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Diluted income per
common share
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$
0.21
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$
0.22
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$
0.55
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$
0.72
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Diluted weighted
average shares outstanding
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18,433
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18,051
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18,353
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18,212
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Basic income per
common share
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$
0.22
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$
0.22
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$
0.55
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$
0.73
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Basic weighted
average shares outstanding
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18,088
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17,747
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18,030
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17,897
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Pro forma data
(1):
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Income from
operations
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$
4,942
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$
6,749
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$
13,681
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$
20,098
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Amortization of
intangible assets
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402
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197
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770
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582
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Acquisition and
integration costs
|
977
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—
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1,306
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—
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Stock-based
compensation included in the
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following expense
categories:
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Cost of services and
fulfillment
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1,001
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1,088
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3,128
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3,387
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Selling and
marketing
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261
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170
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752
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535
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General and
administrative
|
858
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920
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2,311
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2,501
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Pro forma income
from operations
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8,441
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9,124
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21,948
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27,103
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Other income,
net
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319
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|
146
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472
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|
248
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Pro forma income
before income taxes
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8,760
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9,270
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22,420
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27,351
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Income tax expense
GAAP
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1,294
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2,170
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4,086
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6,302
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Tax effects of pro
forma items (2)
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1,292
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1,407
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2,423
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3,222
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Adjustment to tax
expense to reflect pro forma tax rate (3)
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130
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131
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441
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1,416
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Pro forma net
income
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$
6,044
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$
5,562
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$
15,470
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$
16,411
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Pro forma diluted
income per share
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$
0.33
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$
0.31
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$
0.84
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$
0.90
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Pro forma diluted
weighted average shares outstanding
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18,433
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18,051
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18,353
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18,212
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(1) Forrester
believes that pro forma financial results provide investors with
consistent and comparable information to aid in the
understanding
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of Forrester's
ongoing business, and are also used by Forrester in making
compensation decisions. Our pro forma presentation
excludes
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amortization of
acquisition-related intangible assets, stock-based compensation,
acquisition and integration costs, net gains or losses
from
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investments, as well
as their related tax effects. We also utilized an assumed tax rate
of 31% in 2018 and 40% in 2017, which excludes
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items such as
any release of reserves for uncertain tax positions established in
prior years and the effect of any adjustments related to
the
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filing of prior year
tax returns. The pro forma data does not purport to be prepared in
accordance with Accounting Principles Generally
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Accepted in the
United States.
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(2) The tax effect of
adjusting items is based on the accounting treatment and rate for
the jurisdiction of each item.
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(3) To compute pro
forma net income, we apply a pro forma effective tax rate of 31% in
2018 and 40% in 2017.
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Forrester
Research, Inc.
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Key Financial
Data
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(Unaudited, dollars
in thousands)
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September 30,
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December
31,
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2018
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2017
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Balance sheet
data:
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Cash, cash equivalents
and marketable investments
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$
144,452
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$
134,123
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Accounts receivable,
net
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$
38,552
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$
70,023
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Deferred
revenue
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$
128,435
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$
145,207
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Nine Months
Ended
|
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September 30,
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2018
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2017
|
Cash flow
data:
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Net cash provided by
operating activities
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$
37,432
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$
36,863
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Purchases of property
and equipment
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$
(3,161)
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$
(5,806)
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Cash paid for
acquisitions
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$
(9,250)
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$
—
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Repurchases of common
stock
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$
(9,946)
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$
(39,967)
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Dividends
paid
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$
(10,839)
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$
(10,205)
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As
of
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September 30,
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2018
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2017
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Metrics:
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Agreement
value
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$
257,500
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$
237,800
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Client
retention
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74%
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76%
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Dollar
retention
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88%
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88%
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Enrichment
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100%
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94%
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Number of
clients
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2,357
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2,393
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As
of
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September 30,
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2018
|
|
2017
|
Headcount:
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Total
headcount
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1,418
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1,374
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Products and advisory
services staff
|
542
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510
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Sales force
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519
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530
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View original
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SOURCE Forrester