Forrester Research, Inc. (Nasdaq: FORR) today announced its 2011 fourth-quarter and full-year financial results. The company also announced that it has instituted a new quarterly dividend, with the first dividend of $0.14 per share to be payable March 21, 2012, to shareholders of record on March 7, 2012.

Fourth-Quarter Financial Performance

  • Total revenues were $74.7 million for the fourth quarter of 2011, compared with $67.1 million for the fourth quarter of last year.
  • On a GAAP basis, net income was $8.9 million, or $0.38 per diluted share, for the fourth quarter of 2011, compared with net income of $4.1 million, or $0.18 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $9.2 million, or $0.40 per diluted share, for the fourth quarter of 2011, which reflects a pro forma effective tax rate of 40%. Pro forma net income 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. This compares with pro forma net income of $5.9 million, or $0.26 per diluted share, for the same period in 2010, which reflects a pro forma tax rate of 40%. Pro forma net income for the fourth quarter of 2010 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.

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

“Revenue increased 11% in the quarter, which was in line with expectations, while operating margin and earnings per share exceeded guidance,” said George F. Colony, Forrester’s chairman and chief executive officer. “For the full year, we achieved revenue growth exceeding 13% and earnings-per-share growth of over 18%.”

“For 2012, we have realigned our sales force to simplify the sales process for our customers and to increase our sales productivity,” said Colony. “We will continue to invest in client-facing and sales support systems. Our 2012 operating margin guidance reflects the incremental costs of facility and technology investments in 2011 and 2012.”

Quarterly Dividend

Forrester also announced today that its Board of Directors has approved a quarterly dividend of $0.14 per share payable March 21, 2012, to shareholders of record on March 7, 2012. “We believe the decision to institute a regular quarterly dividend provides an appropriate return to our shareholders,” said Michael A. Doyle, Forrester’s chief financial officer. “Our strong balance sheet and cash flow allow us to implement this regular quarterly dividend while at the same time leave us well positioned to continue to invest for innovation and growth.”

Year Ended December 31, 2011, Financial Performance

  • Total revenues were $283.6 million for 2011, compared with $250.7 million for 2010.
  • On a GAAP basis, net income was $23.0 million, or $0.99 per diluted share, for 2011, compared with net income of $20.5 million, or $0.89 per diluted share, for 2010.
  • On a pro forma basis, net income was $29.4 million, or $1.27 per diluted share, for 2011, which reflects a pro forma effective tax rate of 40%. Pro forma net income 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, $1.0 million of acquisition and integration costs, $0.4 million of reorganization costs, and net investment gains of $1.0 million. This compares with pro forma net income of $24.8 million, or $1.07 per diluted share for 2010, which reflects a pro forma tax rate of 40%. Pro forma net income for 2010 excludes stock-based compensation of $4.9 million, amortization of $3.6 million of acquisition-related intangible assets, $0.9 million of duplicate lease costs, $0.1 million of acquisition-related credits, and net investment gains of $2.3 million.

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

Forrester is providing first-quarter 2012 financial guidance as follows:

First-Quarter 2012 (GAAP):

  • Total revenues of approximately $68.5 million to $71.5 million.
  • Operating margin of approximately 3.5% to 5.5%.
  • Other income, net of approximately $0.2 million.
  • An effective tax rate of 39%.
  • Diluted earnings per share of approximately $0.07 to $0.11.

First-Quarter 2012 (Pro Forma):

Pro forma financial guidance for the first quarter of 2012 excludes stock-based compensation expense of $1.1 million to $1.3 million, amortization of acquisition-related intangible assets of approximately $0.6 million, reorganization costs of $1.3 million to $1.5 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 8.0% to 10.0%.
  • Pro forma effective tax rate of 39%.
  • Pro forma diluted earnings per share of approximately $0.15 to $0.19.

Our full-year 2012 guidance is as follows:

Full-Year 2012 (GAAP):

  • Total revenues of approximately $308.0 million to $316.0 million.
  • Operating margin of approximately 11.0% to 12.0%.
  • Other income, net of approximately $0.8 million.
  • An effective tax rate of 39%.
  • Diluted earnings per share of approximately $0.94 to $1.00.

Full-Year 2012 (Pro Forma):

Pro forma financial guidance for full-year 2012 excludes stock-based compensation expense of $4.5 million to $5.0 million, amortization of acquisition-related intangible assets of approximately $2.4 million, reorganization costs of $1.3 million to $1.5 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 14.0% to 15.0%.
  • Pro forma effective tax rate of 39%.
  • Pro forma diluted earnings per share of approximately $1.16 to $1.22