Forrester Research, Inc. (Nasdaq: FORR) today announced its second-quarter ended June 30, 2009 financial results.

Second-Quarter Financial Performance

  • Total revenues were $61.6 million, compared with $63.5 million for the second quarter of last year.
  • On a GAAP-reported basis, Forrester reported net income of $6.2 million, or $0.27 per diluted share, compared with net income of $8.6 million, or $0.37 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $8.8 million, or $0.38 per diluted share, for the second quarter of 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $1.3 million, amortization of $656,000 of acquisition-related intangible assets, and impairments of non-marketable investments of $951,000. This compares with pro forma net income of $8.6 million, or $0.37 per diluted share, for the same period in 2008, which reflects a pro forma effective tax rate of 39 percent. Pro forma net income for the second quarter of 2008 excludes stock-based compensation of $1.3 million, amortization of $23,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $1.6 million and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $666,000.

“Our performance for the quarter met our expectations, with revenue on target and operating margin and EPS slightly exceeding our guidance,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “As expected, the ongoing soft economy continues to impact our deferred revenue performance, declines that are already reflected in our existing guidance. We continue to carefully navigate this difficult economy through prudent expense management, innovating for our clients, and accelerating the role-based strategy so we are well-positioned when the economy begins to recover.”

Six-Month Period Ended June 30, 2009, Financial Performance

  • Total revenues were $118.0 million, compared with $118.4 million for the same period last year.
  • On a GAAP-reported basis, Forrester reported net income of $8.8 million, or $0.38 per diluted share for the six months ended June 30, 2009, compared with net income of $13.7 million or $0.58 per diluted share for the same period last year.
  • On a pro forma basis, net income was $15.0 million or $0.65 per diluted share, for the six months ended June 30, 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income for the six months ended June 30, 2009 excludes stock-based compensation of $3.5 million, amortization of $1.3 million of acquisition-related intangible assets, $3.1 million of reorganization costs, and impairments of non-marketable investments of $951,000. This compares with pro forma net income of $14.8 million, or $0.63 per diluted share, for the same period in 2008, which reflects a pro forma tax rate of 39 percent. Pro forma net income for the six months ended June 30, 2008 excludes stock-based compensation of $2.7 million, amortization of $194,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $2.1 million and expenses related to the restatement of the Company’s historical financial statements of $597,000.

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

Forrester is providing third-quarter 2009 financial guidance as follows:

Third-Quarter 2009 (GAAP):

  • Total revenues of approximately $50 million to $53 million.
  • Operating margin of approximately 5 percent to 8 percent.
  • Other income of approximately $800,000.
  • An effective tax rate of 40 percent.
  • Diluted earnings per share of approximately $0.09 to $0.13.

Third-Quarter 2009 (Pro Forma):

Pro forma financial guidance for the third quarter of 2009 excludes amortization of acquisition-related intangible assets of approximately $500,000, stock-based compensation expense of $1.1 million to $1.6 million, and any gains or impairment charges related to marketable and non-marketable investments.

  • Pro forma operating margin of approximately 9 percent to 11 percent.
  • Pro forma effective tax rate of 40 percent.
  • Pro forma diluted earnings per share of approximately $0.13 to $0.17.

Forrester is providing full-year 2009 guidance as follows:

Full-Year 2009 (GAAP):

  • Total revenues of approximately $220 million to $233 million.
  • Operating margin of approximately 10 percent to 13 percent.
  • Other income of approximately $3.0 million.
  • An effective tax rate of 40 percent.
  • Diluted earnings per share of approximately $0.66 to $0.84.

Full-Year 2009 (Pro Forma):

Pro forma financial guidance for full-year 2009 excludes stock-based compensation expense of $5.5 million to $6.5 million, reorganization costs of $3.1 million, amortization of acquisition-related intangible assets of approximately $2.1 million, and any gains or impairment charges related to marketable and non-marketable investments.

  • Pro forma operating margin of approximately 15 percent to 17 percent.
  • Pro forma effective tax rate of 40 percent.
  • Pro forma diluted earnings per share of approximately $1.00 to $ 1.11.