Welcome!

Microsoft Cloud Authors: Pat Romanski, Elizabeth White, Liz McMillan, Mihai Corbuleac, David Bermingham

News Feed Item

Forrester Research Reports 2012 Fourth-Quarter and Full-Year Financial Results

Forrester Research, Inc. (Nasdaq: FORR) today announced its 2012 fourth-quarter and full-year financial results.

Fourth-Quarter 2012 Financial Performance

  • Total revenues were $75.1 million for the fourth quarter of 2012, compared with $74.7 million for the fourth quarter of last year. Research revenues increased 3%, and advisory services and other revenue decreased 4% compared with the fourth quarter of last year.
  • On a GAAP basis, net income was $4.7 million, or $0.21 per diluted share, for the fourth quarter of 2012, compared with net income of $8.9 million, or $0.38 per diluted share, for the same period last year. On a pro forma basis, net income was $6.4 million, or $0.28 per diluted share, for the fourth quarter of 2012, which reflects a pro forma effective tax rate of 39%. Pro forma net income excludes stock-based compensation of $1.5 million, amortization of $0.7 million of acquisition-related intangible assets, and acquisition-related costs of $0.6 million related to M&A activity Forrester did not pursue. This compares with pro forma net income of $9.2 million, or $0.40 per diluted share, for the same period in 2011, which reflects a pro forma tax rate of 40%. Pro forma net income for the fourth quarter of 2011 excludes stock-based compensation of $0.5 million, amortization of $0.7 million of acquisition-related intangible assets, $0.4 million of reorganization costs, and net investment gains of $0.4 million.

“While our sales performance in 2012 will manifest itself in dampened revenue growth in 2013, we are aggressively taking action to correct what we believe were specific, one-time issues,” said George F. Colony, Forrester’s chairman and chief executive officer. “Our brand remains strong as evidenced by our stable client retention rates, and our market opportunity is large.”

“Today, stability is returning to our sales organization. A seasoned sales executive is instilling better process management and more discipline on the selling organization, which should result in improved productivity as we move through the year,” said Colony. “We are beginning to see some early, positive results in the form of lower sales attrition.”

“We are restructuring other parts of the company to streamline some support functions and get our costs more in line with projected revenue in 2013,” said Colony. “We are balancing our desire for near-term financial results with the proper level of investment to get us back on a growth trajectory in 2014.”

Year Ended December 31, 2012 Financial Performance

  • Total revenues were $292.9 million, compared with $283.6 million for the same period last year.
  • On a GAAP basis, net income was $26.0 million, or $1.13 per diluted share, for 2012, compared with net income of $23.0 million, or $0.99 per diluted share, for 2011. Net income in 2012 includes a $5.5 million deferred tax benefit resulting from the settlement of a tax audit at one of the company’s foreign subsidiaries.
  • On a pro forma basis, net income was $25.5 million, or $1.11 per diluted share, for 2012, which reflects a pro forma effective tax rate of 39%. Pro forma net income excludes stock-based compensation of $5.4 million, amortization of $2.4 million of acquisition-related intangible assets, $1.4 million of reorganization costs, acquisition-related costs of $0.6 million, and net investment gains of $0.3 million. This compares with pro forma net income of $29.4 million, or $1.27 per diluted share, for 2011, which reflects a pro forma tax rate of 40%. Pro forma net income for 2011 excludes stock-based compensation of $3.6 million, amortization of $2.6 million of acquisition-related intangible assets, $3.9 million of duplicate lease costs, $0.4 million of reorganization costs, $1.0 million of acquisition and integration costs, and net investment gains of $1.0 million.

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

Reorganization

Forrester is announcing a reduction of approximately 30 jobs or an estimated 2.5% of its workforce worldwide to streamline its operations and to bring costs more in line with projected revenues for 2013. The company anticipates incurring approximately $1.5 million to $1.8 million of severance and related benefit costs in the first quarter of 2013 related to the reduction.

Forrester is providing first-quarter 2013 financial guidance as follows:

First-Quarter 2013 (GAAP):

  • Total revenues of approximately $66.0 million to $69.0 million.
  • Operating margin of approximately (1.0%) to 1.0%.
  • Other income, net of approximately $0.2 million.
  • An effective tax rate of 39%.
  • Weighted average diluted shares outstanding of approximately 22.8 million.
  • Diluted earnings per share of approximately ($0.02) to $0.02.

First-Quarter 2013 (Pro Forma):

Pro forma financial guidance for the first quarter of 2013 excludes stock-based compensation expense of $1.9 million to $2.1 million, amortization of acquisition-related intangible assets of approximately $0.6 million, reorganization costs of $1.5 million to $1.8 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 5.0% to 7.0%.
  • Pro forma effective tax rate of 39%.
  • Pro forma diluted earnings per share of approximately $0.09 to $0.13.

Our full-year 2013 guidance as follows:

Full-Year 2013 (GAAP):

  • Total revenues of approximately $290.0 million to $298.0 million.
  • Operating margin of approximately 6.0% to 7.0%.
  • Other income, net of approximately $0.8 million.
  • An effective tax rate of 39%.
  • Weighted average diluted shares outstanding of approximately 21.9 million.
  • Diluted earnings per share of approximately $0.52 to $0.59.

Full-Year 2013 (Pro Forma):

Pro forma financial guidance for full-year 2013 excludes stock-based compensation expense of $5.7 million to $6.2 million, amortization of acquisition-related intangible assets of approximately $2.3 million, reorganization costs of $1.5 million to $1.8 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 9.5% to 10.5%.
  • Pro forma effective tax rate of 39%.
  • Pro forma diluted earnings per share of approximately $0.79 to $0.86.

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 17 roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 29 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 include, but are not limited to, statements about anticipated growth, productivity improvements, restructuring activities, and Forrester’s financial guidance for the first quarter of and full-year 2013. 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, technology spending, Forrester’s ability to respond to business and economic conditions and market trends, 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, the possibility of network disruptions and security breaches, 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. 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.

© 2013, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

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

Three months ended

Year ended

December 31,

December 31,

2012 2011 2012 2011
 
Revenues:
Research services $ 51,866 $ 50,518 $ 202,998 $ 191,648
Advisory services and other   23,200     24,132   89,932   91,968
Total revenues 75,066 74,650 292,930 283,616
 
Operating expenses:
Cost of services and fulfillment 28,726 24,978 111,228 103,571
Selling and marketing 25,681 25,067 101,390 101,468
General and administrative 10,199 8,108 36,866 33,284
Depreciation 2,411 2,024 8,921 5,359
Amortization of intangible assets 666 664 2,445 2,562
Reorganization costs (credits)   (10 )   375   1,421   375
Total operating expenses 67,673 61,216 262,271 246,619
 
Income from operations 7,393 13,434 30,659 36,997
 
Other income, net 404 357 1,300 630
Gains on investments, net   11     370   301   1,018
Income before income taxes 7,808 14,161 32,260 38,645
 
Income tax provision   3,107     5,264   6,236   15,635
Net Income $ 4,701   $ 8,897 $ 26,024 $ 23,010
 
Diluted income per share $ 0.21   $ 0.38 $ 1.13 $ 0.99
 
Diluted weighted average shares outstanding   22,652     23,118   22,929   23,164
 
Basic income per share $ 0.21   $ 0.39 $ 1.16 $ 1.02
 
Basic weighted average shares outstanding   22,282     22,646   22,500   22,666
 
Pro forma data (1):
 
Income from operations $ 7,393 $ 13,434 $ 30,659 $ 36,997
Amortization of intangible assets 666 664 2,445 2,562
Duplicate lease costs - - - 3,850
Reorganization costs (credits) (10 ) 375 1,421 375
Acquisition-related and integration costs 569 - 569 986
Stock-based compensation included in the
following expense categories:
Cost of services and fulfillment 872 319 3,085 1,644
Selling and marketing 256 65 894 751
General and administrative   348     165   1,418   1,247
 
Pro forma income from operations 10,094 15,022 40,491 48,412
 
Other income, net   404     357   1,300   630
Pro forma income before income taxes 10,498 15,379 41,791 49,042
 
Pro forma income tax provision   4,094     6,151   16,298   19,617
 
Pro forma net income $ 6,404   $ 9,228 $ 25,493 $ 29,425
 
Pro forma diluted income per share $ 0.28   $ 0.40 $ 1.11 $ 1.27
Diluted weighted average shares outstanding   22,652     23,118   22,929   23,164
 
(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, duplicate lease costs, costs associated with acquisition and integration activities,
stock-based compensation, reorganization costs and 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.
           
 
 
 
Forrester Research, Inc.
Key Financial Data                
(Unaudited, dollars in thousands)
 
December 31,
2012 2011
Balance sheet data:
Cash, cash equivalents and marketable investments $ 242,656 $ 227,603
Accounts receivable, net $ 74,623 $ 81,378
Deferred revenue $ 150,479 $ 147,887
 
 

Year ended

December 31,

2012 2011
Cash flow data:
Net cash provided by operating activities $ 53,147 $ 55,444
Cash used for acquisitions $ - $ (7,531 )
Purchases of property and equipment $ (5,103 ) $ (39,776 )
Repurchases of common stock $ (29,843 ) $ (18,405 )
Dividends paid $ (12,588 ) $ -
 
 
As of
December 31,
2012 2011
Metrics:
Agreement value $ 220,355 $ 221,089
Client retention 77 % 80 %
Dollar retention 90 % 90 %
Enrichment 95 % 101 %
Number of clients 2,462 2,495
 
As of
December 31,
2012 2011
Headcount:
Total headcount 1,236 1,208
Research staff 432 450
Sales staff 462 438
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
industrial company for a multi-year contract initially valued at over $4.0 million. In addition to DataV software, Bsquare will also provide comprehensive systems integration, support and maintenance services. DataV leverages advanced data analytics, predictive reasoning, data-driven diagnostics, and automated orchestration of remediation actions in order to improve asset uptime while reducing service and warranty costs.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...