Form 8-K FORRESTER RESEARCH, INC. For: Oct 27

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): October 27, 2015

 

 

FORRESTER RESEARCH, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		000-21433		04-2797789
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

60 Acorn Park Drive

Cambridge, Massachusetts 02140

(Address of principal executive offices, including zip code)

(617) 613-6000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changes since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Page 1 of 5

Exhibit Index appears on Page 5

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ITEM 2.02.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

The information contained in this current report on Form 8-K is furnished pursuant to Item 2.02 of Form 8-K “Results of Operations and Financial Condition”. This information and the exhibits hereto are being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended. The information contained in this report shall not be incorporated by reference into any filing of Forrester Research, Inc. with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

On October 28, 2015, Forrester Research, Inc. issued a press release announcing its financial results for the quarter and nine months ended September 30, 2015.

Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. Forrester uses pro forma financial information to manage its business, including use of pro forma financial results as the basis for setting targets for various compensation programs. Our pro forma presentation excludes the following, as well as their related tax effects:

Amortization of intangibles—we exclude the effect of the amortization of intangibles from our pro forma results in order to more consistently present our ongoing results of operations.

Gains and losses from investments—we have consistently excluded both gains and losses related to our investments in non-marketable securities and sales of marketable securities from our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

Stock-based compensation expense—we exclude stock-based compensation from our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

Reorganization costs (credits) associated with the Company’s reductions in force are not included in our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

However, these measures should be considered in addition to, not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with generally accepted accounting principles as more fully discussed in our financial statements and filings with the Securities and Exchange Commission.

 

ITEM 8.01

Other Events.

On October 28, 2015, the Company announced that its Board of Directors has approved a regular quarterly cash dividend of $0.17 per share, to be paid on December 16, 2015 to shareholders of record on December 2, 2015.

 

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ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

99.1 Press Release dated October 28, 2015 with respect to financial results for the quarter and the approval of a quarterly cash dividend.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 28, 2015

 

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Exhibit Index

 

Exhibit		Description		Page
99.1		Press Release dated October 28, 2015			xx

 

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Exhibit 99.1

FOR IMMEDIATE RELEASE

Forrester Research Reports 2015 Third-Quarter Financial Results

Cambridge, Mass., October 28, 2015 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its 2015 third-quarter financial results.

Third-Quarter Financial Performance

Total revenues were $74.8 million for the third quarter of 2015, compared with $75.4 million for the third quarter of 2014. Research revenues increased 3%, and advisory services and events revenues decreased 9%, compared with the third quarter of 2014. On a constant currency basis, research revenues increased 7%, and advisory services and events revenues decreased 6%, compared with the third quarter of 2014.

On a GAAP basis, net income was $4.5 million, or $0.25 per diluted share, for the third quarter of 2015, compared with net income of $3.0 million, or $0.16 per diluted share, for the same period in 2014.

On a pro forma basis, net income was $5.5 million, or $0.30 per diluted share, for the third quarter of 2015, which reflects a pro forma effective tax rate of 38%. Pro forma net income excludes stock-based compensation of $2.2 million, amortization of acquisition-related intangible assets of $0.2 million, reorganization costs of $0.9 million, and net investment gains of $0.2 million. This compares with pro forma net income of $4.7 million, or $0.25 per diluted share, for the same period in 2014, which reflects a pro forma tax rate of 38%. Pro forma net income for the third quarter of 2014 excludes stock-based compensation of $2.0 million, amortization of acquisition-related intangible assets of $0.5 million, a credit for reorganization costs of $0.1 million, and net investment losses of $0.1 million.

“We met revenue and exceeded earnings-per-share guidance as we continue to see appetite from clients to develop a customer-obsessed business strategy,” said George F. Colony, Forrester’s chairman and chief executive officer. “The work to optimize our products and operations continues, and we anticipate increased momentum throughout the fourth quarter and into 2016.”

Forrester is providing fourth-quarter 2015 financial guidance as follows:

Fourth-Quarter 2015 (GAAP):

 

•

Total revenues of approximately $78.0 million to $82.0 million.

•

Operating margin of approximately 2.5% to 4.5%.

•

Other income, net of zero.

•

An effective tax rate of 38%.

•

Diluted earnings per share of approximately $0.06 to $0.10.

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Fourth-Quarter 2015 (Pro Forma):

Pro forma financial guidance for the fourth quarter of 2015 excludes stock-based compensation expense of $2.3 million to $2.6 million, amortization of acquisition-related intangible assets of approximately $0.2 million, and any investment gains or losses.

 

•

Pro forma operating margin of approximately 6.0% to 8.0%.

•

Pro forma effective tax rate of 38%.

•

Pro forma diluted earnings per share of approximately $0.15 to $0.19.

Our full-year 2015 guidance is as follows:

Full-Year 2015 (GAAP):

 

•

Total revenues of approximately $311.0 million to $315.0 million.

•

Operating margin of approximately 5.0% to 6.0%.

•

Other income, net of $0.3 million.

•

An effective tax rate of 35%.

•

Diluted earnings per share of approximately $0.61 to $0.65.

Full-Year 2015 (Pro Forma):

Pro forma financial guidance for full-year 2015 excludes stock-based compensation expense of $8.2 million to $8.5 million, reorganization costs of $4.4 million, amortization of acquisition-related intangible assets of approximately $0.9 million, and any investment gains or losses.

 

•

Pro forma operating margin of approximately 9.5% to 10.5%.

•

Pro forma effective tax rate of 38%.

•

Pro forma diluted earnings per share of approximately $1.04 to $1.08.

Quarterly Dividend

Forrester also announced today that its board of directors has approved a quarterly cash dividend of $0.17 per share, payable December 16, 2015, to shareholders of record on December 2, 2015.

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

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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 2015, 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. 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

[email protected]

Phil LeClare

Director, Public Relations

Forrester Research, Inc.

+ 1 617.613.6441

[email protected]

^© 2015, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

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Forrester Research, Inc.

Consolidated Statements of Income

(Unaudited, In thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2015				2014				2015				2014
Revenues:
Research services		$	52,205			$	50,622			$	156,667			$	153,737
Advisory services and events			22,548				24,741				76,084				77,644
Total revenues			74,753				75,363				232,751				231,381
Operating expenses:
Cost of services and fulfillment			29,222				30,105				92,543				93,143
Selling and marketing			27,460				27,677				85,572				86,190
General and administrative			9,530				10,023				28,564				29,365
Depreciation			2,048				2,174				6,251				7,236
Amortization of intangible assets			224				530				669				1,605
Reorganization costs (credits)			928				(71	)			4,433				1,817
Total operating expenses			69,412				70,438				218,032				219,356
Income from operations			5,341				4,925				14,719				12,025
Other income, net			159				232				342				247
Gains (losses) on investments, net			245				(105	)			236				(25	)
Income before income taxes			5,745				5,052				15,297				12,247
Income tax provision			1,295				2,009				5,321				4,981
Net income		$	4,450			$	3,043			$	9,976			$	7,266
Diluted income per common share		$	0.25			$	0.16			$	0.55			$	0.38
Diluted weighted average shares outstanding			18,065				18,549				18,231				19,169
Basic income per common share		$	0.25			$	0.17			$	0.55			$	0.38
Basic weighted average shares outstanding			17,892				18,287				17,986				18,886

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Pro forma data (1):
Income from operations		$	5,341			$	4,925			$	14,719			$	12,025
Amortization of intangible assets			224				530				669				1,605
Reorganization costs (credits)			928				(71	)			4,433				1,817
Stock-based compensation included in the following expense categories:
Cost of services and fulfillment			1,183				1,134				3,218				3,005
Selling and marketing			331				302				754				767
General and administrative			710				547				1,913				1,376
Pro forma income from operations			8,717				7,367				25,706				20,595
Other income, net			159				232				342				247
Pro forma income before income taxes			8,876				7,599				26,048				20,842
Pro forma income tax provision			3,373				2,888				9,898				7,920
Pro forma net income		$	5,503			$	4,711			$	16,150			$	12,922
Pro forma diluted income per share		$	0.30			$	0.25			$	0.89			$	0.67
Pro forma diluted weighted average shares outstanding			18,065				18,549				18,231				19,169

 

(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 (credits) 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.

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Forrester Research, Inc.

Key Financial Data

(Unaudited, dollars in thousands)

 

		September 30,				December 31,
		2015				2014
Balance sheet data:
Cash, cash equivalents and marketable investments		$	104,151			$	104,535
Accounts receivable, net		$	37,379			$	67,429
Deferred revenue		$	124,195			$	144,568
		Nine Months Ended September 30,
		2015				2014
Cash flow data:
Net cash provided by operating activities		$	28,218			$	27,851
Purchases of property and equipment		$	(2,316	)		$	(1,110	)
Repurchases of common stock		$	(18,639	)		$	(66,557	)
Dividends paid		$	(9,163	)		$	(9,053	)
		As of September 30,
		2015				2014
Metrics:
Agreement value		$	233,300			$	226,900
Client retention			80	%			76	%
Dollar retention			91	%			89	%
Enrichment			97	%			97	%
Number of clients			2,482				2,452
		As of September 30,
		2015				2014
Headcount:
Total headcount			1,321				1,316
Research and consulting staff			491				511
Sales staff			513				494

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