Forrester Research, Inc. (Nasdaq: FORR) today announced its second-quarter ended June 30, 2005 financial results.

Second-Quarter Financial Performance

  • Total revenues were $39.2 million, compared with $34.9 million for the second quarter of last year.
  • On a GAAP-reported basis, which reflects an effective tax rate of 39 percent, Forrester reported net income of $2.7 million or $0.12 per diluted share, compared with a net loss of $2.3 million, or $0.11 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $3.4 million or $0.15 per diluted share, for the second quarter of 2005, which excludes amortization of $833,000 of acquisition-related intangible assets, and non-marketable investment gains of $112,000 and which reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $3.0 million, or $0.13 per diluted share, for the same period in 2004, which excludes amortization of $1.4 million of acquisition-related intangible assets, reorganization costs of $6.8 million primarily due to office space consolidations, and non-marketable investment gains of $57,000, and reflects a pro forma effective tax rate of 35 percent.

Six-Month Period Ended June 30, 2005, Financial Performance

  • Total revenues were $73.0 million, compared with $66.7 million for the same period last year.
  • On a GAAP-reported basis, which reflects an effective tax rate of 39 percent, Forrester reported net income of $5.5 million, or $0.25 per diluted share for the six months ended 2005, compared to a net loss of $2.6 million or $0.12 per diluted share for the same period last year.
  • On a pro forma basis, net income was $5.9 million or $0.27 per diluted share, for the six months ended June 30, 2005, which excludes amortization of $2.0 million of acquisition-related intangible assets, non-marketable investment gains of $1.8 million and which reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $5.5 million, or $0.24 per diluted share for the same period last year, which excludes amortization of $3.7 million of acquisition-related intangible assets, reorganization costs of $8.8 million primarily due to office space consolidations, and non-marketable investment gains of $57,000, and reflects a pro forma effective tax rate of 35 percent.

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

“Forrester reported a solid quarter of double-digit revenues and earnings per share growth,” said George F. Colony, chairman of the board and chief executive officer. “During the second quarter, we made progress on our key 2005 objective to regenerate our syndicated research business, as sales of WholeView 2™ improved. Demand for consulting services and the Forrester Oval Program™ remained strong, while year-over-year attendance at our three Events increased. Forrester had a healthy first half of 2005 and as a result is raising full-year guidance.”

Forrester is providing third-quarter 2005 financial guidance as follows:

Third-Quarter 2005 (GAAP):

  • Total revenues of approximately $37.0 million to $39.0 million.
  • Operating margin of approximately 10 percent to 12 percent.
  • Other income of approximately $750,000.
  • An effective tax rate of 39 percent.
  • Diluted earnings per share of approximately $0.12 to $0.16.

Third-Quarter 2005 (Pro Forma):

Pro forma financial guidance for the second quarter of 2005 excludes amortization of acquisition-related intangible assets of approximately $800,000 and any gains or impairment charges related to non-marketable investments.

  • Pro forma operating margin of approximately 12 percent to 14 percent.
  • Pro forma effective tax rate of 35 percent.
  • Pro forma diluted earnings per share of approximately $0.16 to $0.18.

Forrester is revising full-year 2005 guidance as follows:

Full-Year 2005 (GAAP):

  • Total revenues of approximately $152.0 million to $156.0 million.
  • Operating margin of approximately 10 percent to 12 percent.
  • Other income of approximately $3.0 million.
  • An effective tax rate of 39 percent.
  • Diluted earnings per share of approximately $0.55 to $0.63.

Full-Year 2005 (Pro Forma):

Pro forma financial guidance for full-year 2005 excludes amortization of acquisition-related intangible assets of approximately $3.5 million, as well as all gains and impairment charges related to marketable and non-marketable securities.

  • Pro forma operating margin of approximately 13 percent.
  • Pro forma diluted earnings per share of approximately $0.65 to $0.69.
  • An effective tax rate of 35 percent.