Forrester Research Reports Second-Quarter Financial Results And An Increase Of $25 Million In Share Repurchase Authorization
<p>Forrester Research, Inc. (Nasdaq: FORR) today announced its 2013 second-quarter financial results. The company also announced that its board of directors authorized a $25 million increase in the company’s stock repurchase program, bringing the total available repurchase authorization to approximately $80 million.</p>
<p><strong>Second-Quarter Financial Performance</strong></p>
<p>Total revenues were $78.2 million for the second quarter of 2013, compared with $79.1 million for the second quarter of last year. Research revenue and advisory services and other revenue both decreased 1% compared with the second quarter of last year. </p>
<p>On a GAAP basis, net income was $5.6 million, or $0.26 per diluted share, for the second quarter of 2013, compared with net income of $7.8 million, or $0.34 per diluted share, for the same period last year. On a pro forma basis, net income was $6.7 million, or $0.31 per diluted share, for the second quarter of 2013, which reflects a pro forma effective tax rate of 39%. Pro forma net income excludes stock-based compensation of $0.9 million, amortization of $0.6 million of acquisition-related intangible assets, reorganization costs of $0.3 million, and net investment losses of $0.1 million. This compares with pro forma net income of $8.2 million, or $0.36 per diluted share, for the same period in 2012, which reflects a pro forma tax rate of 39%. Pro forma net income for the second quarter of 2012 excludes stock-based compensation of $1.2 million, amortization of $0.6 million of acquisition-related intangible assets, $0.1 million of reorganization costs, and net investment gains of $0.1 million.</p>
<p>“Forrester met its revenue guidance and exceeded operating margin and earnings per share for the second quarter,” said George F. Colony, Forrester’s chairman and chief executive officer. “However, our recovery remains a work in progress and will not be without periodic setbacks. We continue to inject greater accountability, more discipline, and seasoned leadership into our organization. This maturation process will continue through the rest of this year.”</p>
<p><strong>Six-Month Period Ended June 30, 2013 Financial Performance</strong></p>
<p>Total revenues were $149.7 million, compared with $149.4 million for the same period last year.</p>
<p>On a GAAP basis, net income was $8.0 million, or $0.36 per diluted share, for the six months ended June 30, 2013, compared with net income of $11.0 million, or $0.47 per diluted share, for the same period last year. </p>
<p>On a pro forma basis, net income was $11.5 million, or $0.52 per diluted share, for the six months ended June 30, 2013, which reflects a pro forma effective tax rate of 39%. Pro forma net income excludes stock-based compensation of $2.7 million, amortization of $1.1 million of acquisition-related intangible assets, reorganization costs of $1.9 million, and net investment losses of $0.1 million. This compares with pro forma net income of $13.3 million, or $0.57 per diluted share, for the same period in 2012, which reflects a pro forma tax rate of 39%. Pro forma net income for the six months ended June 30, 2012, excludes stock-based compensation of $2.5 million, amortization of $1.2 million of acquisition-related intangible assets, $1.4 million of reorganization costs, and net investment gains of $0.1 million. </p>
<p>A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.</p>
<p>Forrester is providing third-quarter 2013 financial guidance as follows:</p>
<p><em>Third-Quarter 2013 (GAAP):</em></p>
<ul>
<li>Total revenues of approximately $67.0 million to $70.0 million.</li>
<li>Operating margin of approximately 3.0% to 5.0%.</li>
<li>Other income, net of approximately $0.1 million.</li>
<li>An effective tax rate of 39%.</li>
<li>Weighted average diluted shares outstanding of approximately 20.8 million.</li>
<li>Diluted earnings per share of approximately $0.07 to $0.11.</li>
</ul>
<p><strong> </strong></p>
<p><em>Third-Quarter 2013 (Pro Forma):</em></p>
<p>Pro forma financial guidance for the third quarter of 2013 excludes stock-based compensation expense of $1.6 million to $1.8 million, amortization of acquisition-related intangible assets of approximately $0.6 million, and any investment gains or losses.</p>
<ul>
<li>Pro forma operating margin of approximately 6.5% to 8.5%.</li>
<li>Pro forma effective tax rate of 39%.</li>
<li>Pro forma diluted earnings per share of approximately $0.13 to $0.17.</li>
</ul>
<p><strong> </strong></p>
<p>Our full-year 2013 guidance as follows:</p>
<p><em>Full-Year 2013 (GAAP):</em></p>
<ul>
<li>Total revenues of approximately $290.0 million to $298.0 million.</li>
<li>Operating margin of approximately 6.0% to 7.0%.</li>
<li>Other income, net of approximately $0.8 million.</li>
<li>An effective tax rate of 39%.</li>
<li>Weighted average diluted shares outstanding of approximately 21.5 million.</li>
<li>Diluted earnings per share of approximately $0.52 to $0.59.</li>
</ul>
<p><strong> </strong></p>
<p><em>Full-Year 2013 (Pro Forma):</em></p>
<p>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 approximately $1.9 million, and any investment gains or losses. </p>
<ul>
<li>Pro forma operating margin of approximately 9.5% to 10.5%.</li>
<li>Pro forma effective tax rate of 39%.</li>
<li>Pro forma diluted earnings per share of approximately $0.79 to $0.86.</li>
</ul>
<p><strong> </strong></p>
<p><strong>Quarterly Dividend</strong></p>
<p>Forrester also announced today that its board of directors has approved a quarterly dividend of $0.15 per share payable September 18, 2013, to shareholders of record on September 4, 2013.</p>
<p><strong>About Forrester Research</strong></p>
<p>Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. For more information, visit <a href=”http://www.forrester.com”>www.forrester.com</a>.</p>
<p>This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, Forrester’s financial guidance for the third quarter of and full-year 2013, statements about Forrester’s plans for the repurchase of its stock, and statements about Forrester’s future financial performance and financial condition. 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. Dividend declarations are at the discretion of Forrester’s board of directors, and plans for future dividends may be revised by the board at any time. 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.</p>