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 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.

“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.
  • 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.