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 29, 2009

FORRESTER RESEARCH, INC.

(Exact name of registrant as specified in its charter)

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

400 Technology Square
Cambridge, Massachusetts 02139

(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:

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

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

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

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

 

 

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 29, 2009, Forrester Research, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2009.

     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.

     Impairments of and gains related to non-marketable securities and gains from sales of marketable securities—we have consistently excluded both one-time gains and one-time write-offs 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.

     Non-cash stock-based compensation expense—we exclude the stock-based compensation impact of SFAS 123R from our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

     Expenses related to the Company’s stock option investigation and the restatement of the Company’s historical financial statements are also not included in our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

     Reorganization costs associated with the Company’s reduction in force announced in February 2009 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 9.01		FINANCIAL STATEMENTS AND EXHIBITS

     (d) Exhibits

	99.1			Press Release dated October 29, 2009 with respect to financial results for the quarter ended September 30, 2009.

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.

Exhibit Index

Exhibit				Description		Page
	99.1			Press Release dated October 29, 2009			5

Exhibit 99.1

FOR IMMEDIATE RELEASE

Forrester Research Reports Third-Quarter Financial Results

Cambridge, Mass., October 29, 2009 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its third-quarter ended September 30, 2009 financial results.

Third-Quarter Financial Performance

•

Total revenues were $53.9 million, compared with $59.5 million for the third quarter of last year.

•

On a GAAP-reported basis, Forrester reported net income of $4.3 million, or $0.19 per diluted share, compared with net income of $6.4 million, or $0.27 per diluted share, for the same period last year.

•

On a pro forma basis, net income was $6.2 million, or $0.27 per diluted share, for the third quarter of 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $1.4 million, amortization of $439,000 of acquisition-related intangible assets, and impairments of non-marketable investments of $732,000. This compares with pro forma net income of $7.4 million, or $0.31 per diluted share, for the same period in 2008, which reflects a pro forma effective tax rate of 39 percent. Pro forma net income for the third quarter of 2008 excludes stock-based compensation of $1.3 million, amortization of $282,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $26,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $487,000.

“Given the sluggish economy, we are pleased with Forrester’s third-quarter performance,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “Deferred revenue was down at September 30, 2009, as expected; but client and dollar retention increased from last quarter, and our pro forma net income indicates that our expense control efforts are working. Overall, our results exceeded our guidance. As a result we are tightening our revenue range and raising our pro forma operating margin and diluted earnings per share guidance for the full year of 2009.”

Nine-Month Period Ended September 30, 2009, Financial Performance

•

Total revenues were $171.9 million, compared with $178.0 million for the same period last year.

•		On a GAAP-reported basis, Forrester reported net income of $13.1 million, or $0.57 per diluted share for the nine months ended September 30, 2009, compared with net income of $20.1 million or $0.85 per diluted share for the same period last year.
•		On a pro forma basis, net income was $21.2 million or $0.92 per diluted share, for the nine months ended September 30, 2009, which reflects a pro forma effective tax rate of 40

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Forrester Third-Quarter 2009 Information / Page2

percent. Pro forma net income excludes stock-based compensation of $4.9 million, amortization of $1.8 million of acquisition-related intangible assets, $3.1 million of reorganization costs, and impairments of non-marketable investments of $1.7 million. This compares with pro forma net income of $22.2 million, or $0.94 per diluted share, for the same period in 2008, which reflects a pro forma effective tax rate of 39 percent. Pro forma net income for the nine-month period ended September 30, 2008 excludes stock-based compensation of $4.0 million, amortization of $476,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $2.1 million and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $1.1 million.

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.

Forrester is providing fourth-quarter 2009 financial guidance as follows:

Fourth-Quarter 2009 (GAAP):

•

Total revenues of approximately $58 million to $61 million.

•

Operating margin of approximately 13% to 15%.

•

Other income of approximately $500,000.

•

An effective tax rate of 40 percent.

•

Diluted earnings per share of approximately $0.21 to $0.26.

Fourth-Quarter 2009 (Pro Forma):

Pro forma financial guidance for the fourth quarter of 2009 excludes stock based compensation of $1.2 million to $1.4 million, amortization of acquisition-related intangible assets of approximately $300,000, and any gains or impairment charges related to marketable and non-marketable investments.

•

Pro forma operating margin of approximately 16% to 18%.

•

Pro forma effective tax rate of 40%.

•

Pro forma diluted earnings per share of approximately $0.26 to $0.30.

Forrester is providing full-year 2009 guidance as follows:

Full-Year 2009 (GAAP):

•

Total revenues of approximately $230 million to $233 million.

•

Operating margin of approximately 13% to 14%.

•

Other income of approximately $2.7 million.

•

An effective tax rate of 44 percent.

•

Diluted earnings per share of approximately $0.80 to $0.87.

Full-Year 2009 (Pro Forma):

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Forrester Third-Quarter 2009 Information / Page3

Pro forma financial guidance for full-year 2009 excludes stock-based compensation expense of $6.1 million to $6.3 million, reorganization costs of $3.1 million, amortization of acquisition-related intangible assets of approximately $2.1 million, and any gains or impairment charges related to marketable and non-marketable investments.

•

Pro forma operating margin of approximately 18% to 19%.

•

Pro forma effective tax rate of 40 percent.

•

Pro forma diluted earnings per share of approximately $1.18 to $1.22.

About Forrester Research

Forrester Research (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.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 and operating targets for the fourth quarter of and full-year 2009. 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 respond to business and economic conditions, particularly in light of the global economic environment, technology spending, market trends, competition, industry consolidation, the ability to attract and retain professional staff, possible variations in Forrester’s quarterly operating results, any cost savings related to reductions in force and associated actions, risks associated with Forrester’s ability to offer new products and services, and Forrester’s dependence on renewals of its membership-based research services and on key personnel. 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, consolidated balance sheets, and consolidated statements of cash flows are attached.

Contact:

Michael Doyle		Karyl Levinson
Chief Financial Officer		Vice President, Corporate Communications
Forrester Research, Inc.		Forrester Research, Inc.
+1 617.613.6000		+1 617.613.6262
mdoyle@forrester.com		press@forrester.com

© 2009, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

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Forrester Third-Quarter Fiscal 2009 Results/Page 4

Forrester Research, Inc.
Consolidated Statements of Income (In thousands, except per share data)

		Three months ended September 30,								Nine months ended September 30,
		2009				2008				2009				2008
		(Unaudited)								(Unaudited)
Revenues
Research services		$	38,893			$	40,326			$	116,968			$	114,136
Advisory services and other			14,988				19,180				54,898				63,818
Total revenues			53,881				59,506				171,866				177,954
Operating expenses
Cost of services and fulfillment			19,234				21,806				63,306				65,848
Selling and marketing			18,084				20,282				56,536				60,119
General and administrative			7,099				7,529				20,468				22,945
Reorganization costs			—				—				3,141				—
Depreciation			1,075				1,012				3,311				2,998
Amortization of intangible assets			439				282				1,751				476
Total operating expenses			45,931				50,911				148,513				152,386
Income from operations			7,950				8,595				23,353				25,568
Other income, net			460				1,447				2,182				5,221
Realized (losses) gains from marketable and non-marketable investments			(732	)			26				(1,683	)			2,136
Income from operations before income tax provision			7,678				10,068				23,852				32,925
Income tax provision			3,378				3,680				10,769				12,864
Net income		$	4,300			$	6,388			$	13,083			$	20,061
Diluted net income per common share		$	0.19			$	0.27			$	0.57			$	0.85
Diluted weighted average common shares outstanding			22,809				23,793				22,953				23,655
Basic net income per common share		$	0.19			$	0.28			$	0.58			$	0.87
Basic weighted average common shares outstanding			22,561				23,163				22,736				23,056
Pro forma data (1):
Income from operations		$	7,950			$	8,595			$	23,353			$	25,568
Amortization of intangible assets			439				282				1,751				476
Reorganization costs			—				—				3,141				—
Investigation related expenses			—				487				—				1,085
Stock-based compensation included in the following expense categories:
Cost of services and fulfillment			733				678				2,481				2,094
Selling and marketing			274				247				884				723
General and administrative			423				343				1,556				1,156
Pro forma income from operations			9,819				10,632				33,166				31,102
Other income, net			460				1,447				2,182				5,221
Pro forma income before income taxes			10,279				12,079				35,348				36,323
Pro forma income tax provision			4,112				4,711				14,139				14,166
Pro forma net income		$	6,167			$	7,368			$	21,209			$	22,157
Pro forma diluted net income per share		$	0.27			$	0.31			$	0.92			$	0.94
Diluted weighted average common shares outstanding			22,809				23,793				22,953				23,655

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Forrester Third-Quarter Fiscal 2009 Results/Page 5

Forrester Research, Inc.
Condensed Consolidated Balance Sheets (In thousands)

		September 30,				December 31,
		2009				2008
		(Unaudited)
Assets:
Cash and cash equivalents		$	108,177			$	129,478
Short-term investments			162,055				83,951
Accounts receivable, net			36,404				64,226
Deferred commissions			6,365				9,749
Deferred income taxes			9,037				7,947
Prepaid expenses and other current assets			10,112				15,553
Total current assets			332,150				310,904
Long-term investments			9,950				46,500
Property and equipment, net			6,957				6,759
Deferred income taxes			7,460				8,523
Goodwill and intangible assets, net			73,463				74,562
Non-marketable investments and other long term assets			5,612				7,703
Total assets		$	435,592			$	454,951
Liabilities and stockholders’ equity:
Accounts payable		$	1,952			$	3,532
Accrued expenses			23,892				27,527
Deferred revenue			93,541				113,844
Total current liabilities			119,385				144,903
Non-current liabilities			6,552				6,551
Total liabilities			125,937				151,454
Preferred stock			—				—
Common stock			293				291
Additional paid-in capital			322,707				315,149
Retained earnings			123,776				110,693
Treasury stock, at cost			(136,084	)			(120,851	)
Accumulated other comprehensive loss			(1,037	)			(1,785	)
Total stockholders’ equity			309,655				303,497
Total liabilities and stockholders’ equity		$	435,592			$	454,951

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Forrester Third-Quarter Fiscal 2009 Results/Page 6

Forrester Research, Inc.
Consolidated Statements of Cash Flows (In thousands)

		Nine months ended September 30,
		2009				2008
		(Unaudited)				(Unaudited)
Cash flows from operations:
Net income		$	13,083			$	20,061
Adjustments to reconcile net income to net cash provided by operating activities —
Depreciation			3,311				2,998
Amortization of intangible assets			1,751				476
Non-cash stock-based compensation			4,921				3,973
Increase in provision for doubtful accounts			320				494
Unrealized loss on foreign currency and other, net			125				—
Deferred income taxes			225				2,961
Impairments (gains) from non-marketable investments, net			1,683				(79	)
Gains on sales of marketable investments			—				(2,057	)
Amortization of premiums on marketable investments			838				626
Changes in assets and liabilities —
Accounts receivable			28,401				34,518
Deferred commissions			3,385				2,134
Prepaid expenses and other current assets			5,611				2,290
Accounts payable			(2,050	)			(1,056	)
Accrued expenses			(3,797	)			(10,035	)
Deferred revenue			(21,338	)			(16,951	)
Net cash provided by operating activities			36,469				40,353
Cash flows from investing activities:
Acquisition of JupiterResearch			—				(23,398	)
Acquisition of Forrester Middle East FZ-LLC			(752	)			—
Purchases of property and equipment			(3,464	)			(2,730	)
Proceeds from non-marketable investments			—				250
Decrease in other assets			438				344
Purchases of marketable investments			(530,345	)			(966,671	)
Proceeds from sales and maturities of marketable investments			487,339				1,028,902
Net cash (used in) provided by investing activities			(46,784	)			36,697
Cash flows from financing activities:
Proceeds from issuance of common stock under stock option plans and employee stock purchase plan			2,721				17,246
Tax benefits related to stock options			—				5,314
Acquisition of treasury shares			(15,233	)			(26,086	)
Net cash used in financing activities			(12,512	)			(3,526	)
Effect of exchange rate changes on cash and cash equivalents			1,526				(1,818	)
Net (decrease) increase in cash and cash equivalents			(21,301	)			71,706
Cash and cash equivalents, beginning of period			129,478				53,163
Cash and cash equivalents, end of period		$	108,177			$	124,869

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