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): February 6, 2008

FORRESTER RESEARCH, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)		000-21433 (Commission File Number)		04-2797789 (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))

 

 

Page 1 of 4
Exhibit Index appears on Page 4

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 February 6, 2008, Forrester Research, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2007.

     Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. 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.

     Gains from the sale of discontinued operations and income or loss from the discontinued operations are not included in our pro forma results in order to more consistently present our ongoing results of operations from continuing operations.

     Expenses related to our stock option investigation and the restatement of our 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.

     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 February 6, 2008

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: February 6, 2008

Exhibit Index

Exhibit		Description		Page
99.1		Press Release dated February 6, 2008		5

-4-

		FOR IMMEDIATE RELEASE

Forrester Research Reports Fourth-Quarter and Full-Year 2007 Financial Results

CAMBRIDGE, Mass., February 6, 2008 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its fourth quarter and year ended December 31, 2007 financial results.

Fourth-Quarter Financial Performance

•		Total revenues were $58.4 million, compared with $48.9 million for the fourth quarter of last year.
•		On a GAAP-reported basis, Forrester reported net income of $5.6 million or $0.24 per diluted share, compared with net income of $6.2 million, or $0.26 per diluted share, for the same period last year.
•		On a pro forma basis, net income was $8.7 million, or $0.37 per diluted share, for the fourth quarter of 2007, which excludes non-cash stock-based compensation expense of $2.6 million, amortization of $254,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $671,000 and expenses related to the previously reported stock option investigation and restatement of the Company’s historical financial statements of $954,000 and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $7.5 million, or $0.31 per diluted share, for the same period in 2006, which excludes non-cash stock-based compensation expense of $2.0 million, amortization of $462,000 of acquisition-related intangible assets, net non-marketable investment gains of $43,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $668,000 and which reflects a pro forma effective tax rate of 37 percent.

Year Ended December 31, 2007 Financial Performance

•		Total revenues were $212.1 million, compared with $181.5 million for the same period last year. Revenues related to the Ultimate Consumer Panel business, which was sold during the third quarter of 2006, are not included in revenues but are included as a component of income from discontinued operations for 2006.
•		On a GAAP-reported basis, Forrester reported net income of $18.9 million, or $0.80 per diluted share, for the year ended December 31, 2007, compared with net income of $17.8 million, or $0.77 per diluted share, for the same period last year.
•		On a pro forma basis, net income was $27.6 million, or $1.16 per diluted share, for the year ended December 31, 2007, which excludes non-cash stock-based compensation expense of $8.3 million, amortization of $1.2 million of acquisition-related intangible assets, net marketable and non-marketable investment impairments of $1.0 million and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $4.6 million and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $22.5 million, or $0.98 per diluted

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Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 2

share, for the same period last year, which excludes non-cash stock-based compensation expense of $7.2 million, amortization of $2.1 million of acquisition-related intangible assets, a net gain from the sale of discontinued operations of $1.4 million, $300,000 of net income from discontinued operations, net non-marketable investment gains of $348,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $668,000 and which reflects a pro forma effective tax rate of 37 percent.

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

“We are pleased with our 2007 financial performance,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “Along with the introduction of our new role-based strategy, we achieved the top end of our revenue growth target and exceeded our EPS guidance. In 2008, we will complete the transition to roles, an offering which has made us more relevant to our clients. We’ll also continue to drive our syndicated business this year, a key priority for Forrester.”

Forrester is providing first-quarter 2008 financial guidance as follows:

First-Quarter 2008 (GAAP):

•		Total revenues of approximately $53.5 million to $56.5 million.
•		Operating margin of approximately 11 percent to 14 percent.
•		Other income of approximately $2.3 million.
•		An effective tax rate of 39 percent.
•		Diluted earnings per share of approximately $0.21 to $0.27

First-Quarter 2008 (Pro Forma):

Pro forma financial guidance for the first quarter of 2008 excludes amortization of acquisition-related intangible assets of approximately $200,000, non-cash stock-based compensation expense of $1.3 million to $1.7 million, costs related to the stock option investigation and restatement of the Company’s historical financial statements of approximately $200,000 and any gains or impairment charges related to marketable and non-marketable investments.

•		Pro forma operating margin of approximately 13 percent to 15 percent.
•		Pro forma effective tax rate of 39 percent.
•		Pro forma diluted earnings per share of approximately $0.24 to $0.28.

Forrester is providing full-year 2008 guidance as follows:

Full-Year 2008 (GAAP):

•

Total revenues of approximately $240 million to $248 million.

•

Operating margin of approximately 14 percent to 16 percent.

•

Other income of approximately $ 9.5 million.

Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 3

•

An effective tax rate of 39 percent.

•

Diluted earnings per share of approximately $1.14 to $ 1.24.

Full-Year 2008 (Pro Forma):

Pro forma financial guidance for full-year 2008 excludes non-cash stock-based compensation expense of $5.0 million to $ 6.0 million, amortization of acquisition-related intangible assets of approximately $250,000, costs related to the stock option investigation and restatement of the Company’s historical financial statements of $200,000 to $500,000, as well as any gains or impairment charges related to marketable and non-marketable investments.

•

Pro forma operating margin of approximately 17 to 18 percent.

•

Pro forma diluted earnings per share of approximately $ 1.28 to $ 1.36.

•

An effective tax rate of 39 percent.

Forrester Research, Inc. (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice about technology’s impact on business and consumers. For 24 years, Forrester has been a thought leader and trusted advisor, helping global clients lead in their markets through its research, consulting, events, and peer-to-peer executive programs. 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 2007. 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 anticipate business and economic conditions, technology spending, market trends, competition, industry consolidation, the ability to attract and retain professional staff, possible variations in Forrester’s quarterly operating results, 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.

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

Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 4

© 2008, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 5

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

		Three months ended								Year ended
		Dec 31,				Dec 31,				Dec 31,				Dec 31,
		2007				2006				2007				2006
		(Unaudited)								(Unaudited)
Revenues
Research services		$	34,851			$	30,596			$	131,163			$	114,876
Advisory services and other			23,568				18,352				80,893				66,597
Total revenues			58,419				48,948				212,056				181,473
Operating expenses
Cost of services and fulfillment			21,501				18,967				81,608				73,268
Selling and marketing			19,017				15,595				71,830				59,626
General and administrative			8,216				6,099				30,749				22,859
Depreciation			1,105				871				3,986				3,618
Amortization of intangible assets			254				462				1,232				2,060
Total operating expenses			50,093				41,994				189,405				161,431
Income from continuing operations			8,326				6,954				22,651				20,042
Other income, net			2,219				1,768				8,372				5,704
Gains (impairments) from securities and non-marketable investments, net			671				43				(1,019	)			348
Income from continuing operations before income taxes			11,216				8,765				30,004				26,094
Income tax provision			5,601				2,526				11,061				10,037
Income from continuing operations		$	5,615			$	6,239			$	18,943			$	16,057
Discontinued operations
Income from discontinued operations, net of taxes			—				—				—				300
Gain on sale of discontinued operations, net of taxes			—				—				—				1,399
Net Income		$	5,615			$	6,239			$	18,943			$	17,756
Diluted income per share from continuing operations		$	0.24			$	0.26			$	0.80			$	0.70
Diluted income per share from discontinued operations		$	—			$	—			$	—			$	0.07
Diluted income per share from net income		$	0.24			$	0.26			$	0.80			$	0.77
Diluted weighted average shares outstanding			23,670				23,815				23,729				22,973
Basic income per share from continuing operations		$	0.24			$	0.27			$	0.82			$	0.72
Basic income per share from discontinued operations		$	—			$	—			$	—			$	0.08
Basic income per share from net income		$	0.24			$	0.27			$	0.82			$	0.80
Basic weighted average shares outstanding			23,096				22,970				23,074				22,195
Pro forma data (1):
Income from continuing operations		$	8,326			$	6,954			$	22,651			$	20,042
Amortization of intangible assets			254				462				1,232				2,060
Investigation related expenses			954				668				4,583				668
Non-cash stock-based compensation included in the following expense categories:
Cost of services and fulfillment			1,127				931				4,245				3,185
Selling and marketing			206				492				1,730				1,885
General and administrative			1,231				578				2,351				2,140
Pro forma income from continuing operations			12,098				10,085				36,792				29,980
Other income, net			2,219				1,768				8,372				5,704
Pro forma income before income taxes			14,317				11,853				45,164				35,684
Pro forma income tax provision			5,584				4,386				17,614				13,203
Pro forma net income		$	8,733			$	7,467			$	27,550			$	22,481
Pro forma diluted earnings per share		$	0.37			$	0.31			$	1.16			$	0.98
Diluted weighted average shares outstanding			23,670				23,815				23,729				22,973

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Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 6

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

		December 31,				December 31,
		2007				2006
		(Unaudited)
Assets:
Cash and cash equivalents		$	53,163			$	39,157
Available-for-sales securities			195,811				168,676
Accounts receivable, net			69,865				59,727
Deferred commissions			10,631				10,117
Deferred income taxes			13,236				13,592
Prepaid expenses and other current assets			11,304				7,610
Total current assets			354,010				298,879
Property and equipment, net			6,834				5,611
Deferred income taxes			2,274				11,335
Goodwill and intangible assets, net			53,986				54,688
Non-marketable investments and other long term assets			9,253				13,630
Total assets		$	426,357			$	384,143
Liabilities and stockholders’ equity:
Accounts payable		$	4,174			$	2,878
Accrued expenses			28,891				29,852
Deferred revenue			111,418				99,875
Total current liabilities			144,483				132,605
Deferred income tax liability and other non-current accrued income tax liability			6,858				6,633
Total liabilities			151,341				139,238
Preferred stock			—				—
Common stock			282				279
Additional paid-in capital			284,431				270,306
Retained earnings			81,478				62,766
Treasury stock, at cost			(90,428	)			(85,834	)
Accumulated other comprehensive loss			(747	)			(2,612	)
Total stockholders’ equity			275,016				244,905
Total liabilities and stockholders’ equity		$	426,357			$	384,143

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Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 7

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

		Year ended
		December 31,				December 31,
		2007				2006
		(Unaudited)
Cash flows from operations:
Net income		$	18,943			$	17,756
Net income and gain from sale of discontinued operations			—				(1,699	)
Income from continuing operations		$	18,943			$	16,057
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation			3,986				3,618
Amortization of intangible assets			1,232				2,060
Non-cash stock-based compensation			8,326				7,210
Impairments (gains) from non-marketable investments, net			1,622				(348	)
Realized gains on sales of available-for-sale securities			(603	)			—
Increase in provision for doubtful accounts			480				358
Tax benefit from exercises of employee stock options			101				75
Deferred income taxes			6,165				9,636
Accretion of premiums on available-for-sale securities			607				852
Changes in assets and liabilities -							—
Accounts receivable			(9,966	)			(7,765	)
Deferred commissions			(514	)			(1,267	)
Prepaid expenses and other current assets			(3,552	)			(1,906	)
Accounts payable			1,171				1,171
Accrued expenses			(409	)			2,935
Deferred revenue			9,841				12,751
Net cash provided by operating activities			37,430				45,437
Net cash provided by discontinued operations			—				325
Net cash provided by operating activities			37,430				45,762
Cash flows from investing activities:
Purchases of property and equipment			(5,106	)			(3,334	)
Purchase of non-marketable investments			—				(300	)
Proceeds from non-marketable investments			2,640				555
Proceeds from sale of discontinued operations			250				1,642
Decrease in other assets			146				391
Purchases of available-for-sale securities			(1,240,584	)			(565,495	)
Proceeds from sales and maturities of available-for-sale securities			1,217,367				480,166
Net cash used in investing activities			(25,287	)			(86,375	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock option plans and employee stock purchase plan			4,896				42,526
Tax benefits related to stock options			807				308
Acquisition of treasury shares			(4,594	)			(12,304	)
Net cash provided by financing activities			1,109				30,530
Effect of exchange rate changes on cash and cash equivalents			754				702
Net increase (decrease) in cash and cash equivalents			14,006				(9,381	)
Cash and cash equivalents, beginning of period			39,157				48,538
Cash and cash equivalents, end of period		$	53,163			$	39,157