Forrester Research Reports 2018 Fourth-Quarter And Full-Year Financial Results
Fourth-Quarter Financial Performance
Total revenues were
On a GAAP basis, net income was
On a pro forma basis, net income was
"
Year Ended
Total revenues were
On a GAAP basis, net income was
On a pro forma basis, net income was
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
2019 Guidance
First-Quarter 2019 (GAAP):
- Total revenues of approximately
$95.0 million to $100.0 million . - Operating margin of approximately (14.5)% to (12.5)%.
- Interest expense of approximately
$2.4 million . - Other income, net of zero.
- An effective tax rate of 5% to 10%.
- Loss per share of approximately
$0.74 to $0.80 .
First-Quarter 2019 (Pro Forma):
Pro forma financial guidance for the first quarter of 2019 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of
- Adjusted revenues of approximately
$100.0 million to $105.0 million . - Pro forma operating margin of approximately 0.5% to 2.5%.
- Pro forma effective tax rate of 31%.
- Pro forma loss per share of approximately zero to
$0.06 .
Our full-year 2019 guidance is as follows:
Full-Year 2019 (GAAP):
- Total revenues of approximately
$457.0 million to $469.0 million . - Operating margin of approximately (1.5)% to 0.5%.
- Interest expense of approximately
$9.5 million to $10.0 million . - Other income, net of zero.
- An effective tax rate of 5% to 10%.
- Diluted loss per share of approximately
$0.41 to $0.53 .
Full-Year 2019 (Pro Forma):
Pro forma financial guidance for full-year 2019 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of
- Adjusted revenues of
$475.0 million to $487.0 million . - Pro forma operating margin of approximately 10.0% to 12.0%.
- Pro forma effective tax rate of 31%.
- Pro forma diluted earnings per share of approximately
$1.55 to $1.67 .
About
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,
The consolidated statements of income and the table of key financial data are attached.
Contact:
Chief Financial Officer
+1 617-613-6000
mdoyle@forrester.com
Meaghan Rhyasen
Public Relations
+1 617-613-6070
press@forrester.com
© 2019,
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 |
Year Ended |
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December 31, |
December 31, |
|||||||
2018 |
2017 |
2018 |
2017 |
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Revenues: |
||||||||
Research services |
$ 62,067 |
$ 55,918 |
$ 228,399 |
$ 216,471 |
||||
Advisory services and events |
36,516 |
34,459 |
129,176 |
121,202 |
||||
Total revenues |
98,583 |
90,377 |
357,575 |
337,673 |
||||
Operating expenses: |
||||||||
Cost of services and fulfillment |
38,965 |
36,058 |
146,502 |
136,872 |
||||
Selling and marketing |
35,053 |
33,562 |
131,824 |
123,917 |
||||
General and administrative |
11,049 |
11,234 |
43,920 |
41,906 |
||||
Depreciation |
1,899 |
1,873 |
7,955 |
6,648 |
||||
Amortization of intangible assets |
392 |
199 |
1,162 |
781 |
||||
Acquisition and integration costs |
2,481 |
- |
3,787 |
- |
||||
Total operating expenses |
89,839 |
82,926 |
335,150 |
310,124 |
||||
Income from operations |
8,744 |
7,451 |
22,425 |
27,549 |
||||
Other income, net |
202 |
53 |
674 |
301 |
||||
Gains (losses) on investments, net |
488 |
518 |
426 |
(479) |
||||
Income before income taxes |
9,434 |
8,022 |
23,525 |
27,371 |
||||
Income tax provision |
4,059 |
5,929 |
8,145 |
12,231 |
||||
Net income |
$ 5,375 |
$ 2,093 |
$ 15,380 |
$ 15,140 |
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Diluted income per common share |
$ 0.29 |
$ 0.11 |
$ 0.84 |
$ 0.83 |
||||
Diluted weighted average shares outstanding |
18,459 |
18,322 |
18,380 |
18,240 |
||||
Basic income per common share |
$ 0.29 |
$ 0.12 |
$ 0.85 |
$ 0.84 |
||||
Basic weighted average shares outstanding |
18,274 |
17,983 |
18,091 |
17,919 |
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Pro forma data (1): |
||||||||
Income from operations |
$ 8,744 |
$ 7,451 |
$ 22,425 |
$ 27,549 |
||||
Amortization of intangible assets |
392 |
199 |
1,162 |
781 |
||||
Acquisition and integration costs |
2,481 |
- |
3,787 |
- |
||||
Stock-based compensation included in the |
||||||||
following expense categories: |
||||||||
Cost of services and fulfillment |
1,201 |
1,151 |
4,329 |
4,538 |
||||
Selling and marketing |
313 |
182 |
1,065 |
717 |
||||
General and administrative |
595 |
734 |
2,906 |
3,235 |
||||
Pro forma income from operations |
13,726 |
9,717 |
35,674 |
36,820 |
||||
Other income, net |
202 |
53 |
674 |
301 |
||||
Pro forma income before income taxes |
13,928 |
9,770 |
36,348 |
37,121 |
||||
Income taxes under GAAP |
4,059 |
5,929 |
8,145 |
12,231 |
||||
Tax effects of pro forma items (2) |
601 |
(654) |
3,024 |
2,568 |
||||
Adjustment to tax expense to reflect pro forma tax rate (3) |
(342) |
(1,367) |
99 |
49 |
||||
Pro forma net income |
$ 9,610 |
$ 5,862 |
$ 25,080 |
$ 22,273 |
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Pro forma diluted income per share |
$ 0.52 |
$ 0.32 |
$ 1.36 |
$ 1.22 |
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Pro forma diluted weighted average shares outstanding |
18,459 |
18,322 |
18,380 |
18,240 |
(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, acquisition and integration costs and net gains or losses from 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 items such as the tax effect of the Tax Cuts and Jobs Act of 2017, any release of reserves for uncertain tax positions established in prior years and the effect of any adjustments related to the filing of prior year tax returns. The pro forma data does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States. |
(2) The tax effect of adjusting items is based on the accounting treatment and rate for the jurisdiction of each item. |
(3) To compute pro forma net income, we apply a pro forma effective tax rate of 31% for the 2018 periods and 40% for the 2017 periods. |
Forrester Research, Inc. |
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Key Financial Data |
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(Unaudited, dollars in thousands) |
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December 31, |
December 31, |
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2018 |
2017 |
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Balance sheet data: |
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Cash, cash equivalents and marketable investments |
$ 140,296 |
$ 134,123 |
||
Accounts receivable, net |
$ 67,318 |
$ 70,023 |
||
Deferred revenue |
$ 135,332 |
$ 145,207 |
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Year Ended |
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December 31, |
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2018 |
2017 |
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Cash flow data: |
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Net cash provided by operating activities |
$ 38,419 |
$ 37,493 |
||
Purchases of property and equipment |
$ (5,050) |
$ (7,861) |
||
Cash paid for acquisitions |
$ (9,250) |
$ - |
||
Repurchases of common stock |
$ (9,946) |
$ (39,967) |
||
Dividends paid |
$ (14,502) |
$ (13,631) |
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As of |
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December 31, |
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2018 |
2017 |
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Metrics: |
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Agreement value |
$ 266,300 |
$ 242,900 |
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Client retention |
74% |
76% |
||
Dollar retention |
88% |
88% |
||
Enrichment |
101% |
96% |
||
Number of clients |
2,353 |
2,409 |
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As of |
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December 31, |
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2018 |
2017 |
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Headcount: |
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Total headcount |
1,432 |
1,392 |
||
Products and advisory services staff |
559 |
515 |
||
Sales force |
528 |
539 |
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