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 10, 2011

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)

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 10, 2011, Forrester Research, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2010.

     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 associated with the Company’s reduction in force announced in February 2009 and additional lease-related costs incurred in the fourth quarter of 2009 are not included in our pro forma results in order to keep quarter-over-quarter and year-over-year comparisons consistent.

     Acquisition related costs and credits are not included in our pro forma results in order to more consistently present our ongoing results of operations.

     Duplicate lease costs represent costs for replacement facilities for the period of time prior to the Company utilizing the new facility for operations. Duplicate lease costs are excluded from 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 10, 2011 with respect to financial results for the quarter and year ended December 31, 2010.

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 10, 2011

Exhibit Index

Exhibit		Description		Page
99.1		Press Release dated February 10, 2011		5

Exhibit 99.1

		FOR IMMEDIATE RELEASE

Forrester Research Reports Fourth-Quarter And Full-Year Financial Results

Cambridge, Mass., February 10, 2011 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its fourth-quarter ended December 31, 2010 and full-year ended 2010 financial results.

Fourth-Quarter Financial Performance

•		Total revenues were $67.1 million, compared with $61.5 million for the fourth quarter of last year.
•		On a GAAP-reported basis, Forrester reported net income of $4.1 million, or $0.18 per diluted share, compared with net income of $5.8 million, or $0.26 per diluted share, for the same period last year. The effective tax rate for the fourth quarter of 2010 was 45 percent compared with 41 percent for the same period last year.
•		On a pro forma basis, net income was $5.9 million, or $0.26 per diluted share, for the fourth quarter of 2010, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $1.2 million, amortization of $0.9 million of acquisition-related intangible assets, $0.5 million of duplicate lease costs, $0.3 million of acquisition costs and net investment gains of $0.5 million. This compares with pro forma net income of $7.9 million, or $0.35 per diluted share, for the same period in 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income for the fourth quarter of 2009 excludes stock-based compensation of $1.2 million, reorganization costs of $2.3 million, amortization of $0.5 million of acquisition-related intangible assets and net investment gains of $0.7 million.

“As the economy began its slow recovery, Forrester had a solid fourth quarter and full year in 2010,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “We continued to successfully execute our role-based strategy and achieved all-time highs in our client and dollar retention rates during 2010. While all of our client groups experienced healthy growth in 2010, Forrester’s differentiated offerings for marketing and strategy professionals continued to be the fastest-growing part of our business. Overall we are well positioned for 2011.”

“In 2010 we made significant investments to support our growth and will continue to do so in 2011,” said Colony. “We have expanded our available office space in key markets and will open a new corporate headquarters in Cambridge, Mass., later this year. We plan to keep hiring both research and sales personnel and are investing in customer-facing platforms to enhance our clients’ experience with Forrester.”

Year Ended December 31, 2010, Financial Performance

•		Total revenues were $250.7 million, compared with $233.4 million for 2009.
•		On a GAAP-reported basis, Forrester reported net income of $20.5 million, or $0.89 per diluted share for 2010, compared with net income of $18.9 million, or $0.82 per diluted share, for 2009. The effective tax rate for 2010 was 40 percent compared with 44 percent for 2009.
•		On a pro forma basis, net income was $24.8 million, or $1.07 per diluted share for 2010, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $4.9 million, amortization of $3.6 million of acquisition-related intangible assets, $0.1 million of acquisition-related credits, $0.9 million of duplicate lease costs and net investment gains of $2.3 million. This compares with pro forma net income of $29.1 million, or $1.27 per diluted share for 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income for 2009 excludes stock-based compensation of $6.1 million, amortization of $2.3 million of acquisition-related intangible assets, $5.4 million of reorganization costs and net investment losses of $1.0 million.

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

Forrester is providing first-quarter 2011 financial guidance as follows:

First-Quarter 2011 (GAAP):

•		Total revenues of approximately $63.0 million to $65.0 million.
•		Operating margin of approximately 5.5% to 7.5%.
•		Other income, net of $250,000.
•		An effective tax rate of 40 percent.
•		Diluted earnings per share of approximately $0.10 to $0.14.

First-Quarter 2011 (Pro Forma):

Pro forma financial guidance for the first quarter of 2011 excludes stock-based compensation of $1.0 million to $1.2 million, amortization of acquisition-related intangible assets of approximately $0.4 million, duplicate lease costs of $1.5 million and any investment gains or losses.

•		Pro forma operating margin of approximately 10.0% to 12.0%.
•		Pro forma effective tax rate of 40 percent.
•		Pro forma diluted earnings per share of approximately $0.17 to $0.21.

###

Forrester is providing full-year 2011 guidance as follows:

Full-Year 2011 (GAAP):

•		Total revenues of approximately $282 million to $288 million.
•		Operating margin of approximately 12.5% to 13.5%.
•		Other income of approximately $1.0 million.
•		An effective tax rate of 40 percent.
•		Diluted earnings per share of approximately $0.96 to $1.02.

Full-Year 2011 (Pro Forma):

Pro forma financial guidance for full-year 2011 excludes stock-based compensation expense of approximately $4.6 million to $5.0 million, amortization of acquisition-related intangible assets of approximately $1.8 million, duplicate lease costs of approximately $3.3 million to $3.8 million and any investment gains or losses.

•		Pro forma operating margin of approximately 16.0% to 17.0%.
•		Pro forma effective tax rate of 40 percent.
•		Pro forma diluted earnings per share of approximately $1.22 to $1.28.

About Forrester Research

Forrester Research, Inc. (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 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 27 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 guidance for the first quarter of and full-year 2011. 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 and the table of selected balance sheet and cash flow data 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

^© 2011, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

Forrester Research, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
		Three months ended								Year ended
		December 31,								December 31,
		2010				2009				2010				2009
Revenues:
Research services		$	45,445			$	40,758			$	168,508			$	157,726
Advisory services and other			21,671				20,728				82,218				75,626
Total revenues			67,116				61,486				250,726				233,352
Operating expenses:
Cost of services and fulfillment			25,079				18,442				94,105				84,266
Selling and marketing			23,627				22,076				84,663				76,094
General and administrative			9,547				7,993				33,960				28,461
Depreciation			888				1,069				3,628				4,380
Amortization of intangible assets			905				539				3,620				2,290
Reorganization costs			—				2,300				—				5,441
Total operating expenses			60,046				52,419				219,976				200,932
Income from operations			7,070				9,067				30,750				32,420
Other income (loss), net			(29	)			115				1,249				2,297
Gains (losses) on investments, net			472				701				2,301				(982	)
Income before income taxes			7,513				9,883				34,300				33,735
Income tax provision			3,384				4,100				13,793				14,869
Net Income		$	4,129			$	5,783			$	20,507			$	18,866
Diluted income per share		$	0.18			$	0.26			$	0.89			$	0.82
Diluted weighted average shares outstanding			23,134				22,678				23,063				22,884
Basic income per share		$	0.18			$	0.26			$	0.91			$	0.83
Basic weighted average shares outstanding			22,543				22,372				22,478				22,645
Pro forma data (1):
Income from operations		$	7,070			$	9,067			$	30,750			$	32,420
Amortization of intangible assets			905				539				3,620				2,290
Duplicate lease costs			487				—				875				—
Reorganization costs			—				2,300				—				5,441
Acquisitions costs (credits)			256				—				(70	)			—
Stock-based compensation included in the
following expense categories:
Cost of services and fulfillment			507				480				2,094				2,961
Selling and marketing			234				239				943				1,123
General and administrative			447				471				1,837				2,027
Pro forma income from operations			9,906				13,096				40,049				46,262
Other income (loss), net			(29	)			115				1,249				2,297
Pro forma income before income taxes			9,877				13,211				41,298				48,559
Pro forma income tax provision			3,951				5,284				16,519				19,424
Pro forma net income		$	5,926			$	7,927			$	24,779			$	29,135
Pro forma diluted income per share		$	0.26			$	0.35			$	1.07			$	1.27
Diluted weighted average shares outstanding			23,134				22,678				23,063				22,884

Forrester Research, Inc.
Consolidated Balance Sheet and Cash Flow Data (Unaudited, In thousands)

		December 31,
		2010				2009
Balance sheet data:
Cash, cash equivalents and marketable investments		$	216,034			$	259,792
Accounts receivable, net		$	73,574			$	67,436
Deferred revenue		$	131,521			$	117,888

		Year ended
		December 31,
		2010				2009
Cash flow data:
Net cash provided by operating activities		$	38,657			$	43,099
Cash used for acquisitions		$	(1,660	)		$	(5,592	)
Purchases of property and equipment		$	(13,426	)		$	(4,284	)
Repurchases of common stock		$	(21,345	)		$	(20,399	)
Dividend paid on common stock		$	(68,414	)		$	—