Forrester Research Reports Third-Quarter 2007 Financial Results, Files 10-Qs For First Three Quarters Of 2007
Forrester Research, Inc. (Nasdaq: FORR) today announced its third quarter ended September 30, 2007 financial results and filed its form 10-Qs for the first three quarters of 2007, regaining compliance with SEC and Nasdaq reporting requirements.
Third-Quarter Financial Performance
- Total revenues were $51.1 million, compared with $44.1 million for the third quarter of last year.
- On a GAAP-reported basis, Forrester reported net income of $6.8 million or $0.29 per diluted share, compared with net income of $6.3 million, or $0.27 per diluted share, for the same period last year.
- On a pro forma basis, net income was $6.7 million, or $0.28 per diluted share, for the third quarter of 2007, which excludes non-cash stock-based compensation of $1.4 million, amortization of $293,000 of acquisition-related intangible assets, net non-marketable investment gains of $98,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $808,000 and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $6.0 million, or $0.26 per diluted share, for the same period in 2006, which excludes non-cash stock-based compensation of $1.5 million, amortization of $474,000 of acquisition-related intangible assets, net non-marketable investment gains of $98,000, a $1.4 million gain on the disposal of discontinued operations and $51,000 of net income from discontinued operations and reflects a pro forma effective tax rate of 37 percent.
Nine-Month Period Ended September 30, 2007 Financial Performance
- Total revenues were $153.6 million, compared with $132.5 million for the same period last year.
- On a GAAP-reported basis, Forrester reported net income of $13.3 million, or $0.56 per diluted share, for the nine months ended September 30, 2007, compared with net income of $11.5 million, or $0.51 per diluted share, for the same period last year.
- On a pro forma basis, net income was $18.8 million, or $0.79 per diluted share, for the nine months ended September 30, 2007, which excludes non-cash stock-based compensation of $5.8 million, amortization of $978,000 of acquisition-related intangible assets, $1.7 million of net impairments from non-marketable investments, and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $3.6 million and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $15.0 million, or $0.66 per diluted share, for the same period last year, which excludes non-cash stock-based compensation of $5.2 million, amortization of $1.6 million of acquisition-related intangible assets, a net gain from the sale of discontinued operations of $1.4 million and $300,000 of net income from discontinued operations, and net non-marketable investment gains of $305,000, and which reflects a pro forma effective tax rate of 37 percent.
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
“Our business remains strong and we are on a path to achieve our full-year guidance,” said George F. Colony, chairman of the board and chief executive officer. “Clients are responding well to our role-based strategy and our more relevant, targeted offerings. We have spent much of this year ensuring that we have the necessary resources for continued growth. These include refining our products and increasing the research and sales staff which will enable us to successfully complete the implementation of our role-based strategy.”
Forrester is providing fourth-quarter 2007 financial guidance as follows:
Fourth Quarter 2007 (GAAP):
- Total revenues of approximately $54 million to $56 million.
- Operating margin of approximately 12 percent to 14 percent.
- Other income of approximately $2.1 million.
- An effective tax rate of 35 percent.
- Diluted earnings per share of approximately $0.22 to $0.26.
Fourth Quarter 2007 (Pro Forma):
Pro forma financial guidance for the fourth quarter of 2007 excludes amortization of acquisition-related intangible assets of approximately $300,000, non-cash stock-based compensation expense of $1.5 million to $2.0 million, costs related to the stock option investigation and restatement of the Company’s historical financial statements of $500,000 to $1.0 million and any gains or impairment charges related to non-marketable investments.
- Pro forma operating margin of approximately 16.5 percent to 18.5 percent.
- Pro forma effective tax rate of 39 percent.
- Pro forma diluted earnings per share of approximately $0.30 to $0.32.
Forrester is providing full-year 2007 guidance as follows:
Full Year 2007 (GAAP):
- Total revenues of approximately $207 million to $210 million.
- Operating margin of approximately 10 percent to 12 percent.
- Other income of approximately $6.5 million.
- An effective tax rate of approximately 32 percent.
- Diluted earnings per share of approximately $0.78 to $0.82.
Full Year 2007 (Pro Forma):
Pro forma financial guidance for full year 2007 excludes non-cash stock-based compensation expense of $7.3 million to $7.8 million, amortization of acquisition-related intangible assets of approximately $1.3 million, costs related to the stock option investigation and restatement of the Company’s historical financial statements of $4.1 to $4.6 million, as well as gains or impairment charges related to marketable and non-marketable investments.
- Pro forma operating margin of approximately 16 to 17 percent.
- Pro forma diluted earnings per share of approximately $1.09 to $1.12.
- An effective tax rate of 39 percent.
Forrester Files 10-Qs For First Three Quarters Of 2007, Regains Compliance With SEC And Nasdaq Reporting Requirements
On November 13, 2007, Forrester Research, Inc. (the “Company”) received an additional Staff Determination letter from the Listing Qualifications department of The Nasdaq Stock Market stating that the Company is not in compliance with Nasdaq Marketplace Rule 4310(c)(14). As anticipated, the letter was issued in accordance with Nasdaq procedures when the Company did not file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
As previously announced, the Company has received similar Staff Determination letters stating that the Company is not in compliance with Nasdaq Marketplace Rule 4310(c)(14) due to the delay in the filing of its Annual Report on Form 10-K for the year ended December 31, 2006, its Quarterly Report on Form 10-Q for the period ended March 31, 2007 and its Quarterly Report on Form 10-Q for the period ended June 30, 2007.
On November 5, 2007, the Company filed its Annual Report on Form 10-K for the year ended December 31, 2006. The Company filed today its Quarterly Reports on Form 10-Q for each of the quarters in 2007. The Company therefore currently is in compliance with Nasdaq Marketplace Rule 4310(c)(14).