EX-99.1 2 b79410exv99w1.htm EX-99.1 PRESS RELEASE DATED FEBRUARY 10, 2010 exv99w1
     
(FORRESTER LOGO)
  FOR IMMEDIATE RELEASE
Forrester Research Reports Fourth-Quarter And Full-Year Financial Results
Cambridge, Mass., February 10, 2010 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its fourth-quarter ended December 31, 2009 and full-year 2009 financial results.
Fourth-Quarter Financial Performance
•   Total revenues were $61.5 million, compared with $62.9 million for the fourth quarter of last year.
•   On a GAAP-reported basis, Forrester reported net income of $6.7 million, or $0.29 per diluted share, compared with net income of $9.2 million, or $0.39 per diluted share, for the fourth quarter of last year.
•   On a pro forma basis, net income was $7.9 million, or $0.35 per diluted share, for the fourth quarter of 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income excludes stock-based compensation of $1.2 million, reorganization costs of $2.3 million, amortization of $0.5 million of acquisition-related intangible assets, and net non-marketable investment gains of $0.7 million. This compares with pro forma net income of $9.0 million, or $0.38 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 fourth quarter of 2008 excludes stock-based compensation of $1.4 million, amortization of $1.0 million of acquisition-related intangible assets, net non-marketable investment losses of $0.7 million, and a net reimbursement of $0.2 million of professional fees related to the Company’s historical stock option investigation.
Year Ended December 31, 2009 Financial Performance
•   Total revenues were $233.4 million, compared with $240.9 million for 2008.
•   On a GAAP-reported basis, Forrester reported net income of $19.8 million, or $0.86 per diluted share for 2009, compared with net income of $29.2 million or $1.24 per diluted share for 2008.
•   On a pro forma basis, net income was $29.1 million or $1.27 per diluted share for 2009, which reflects a pro forma effective tax rate of 40 percent. Pro forma net income for 2009 excludes stock-based compensation of $6.1 million, amortization of $2.3 million of acquisition-related intangible assets, $5.4 million of reorganization costs, and net non-marketable investment losses of $1.0 million. This compares with pro forma net income of $31.1 million, or $1.32 per diluted share for 2008, which reflects a pro forma effective tax rate of 39 percent. Pro forma net income for 2008 excludes stock-based compensation of $5.4 million, amortization of $1.4 million of acquisition-related intangible assets, net marketable and non-marketable investment gains of $1.5 million, and net expenses of $0.9 million related to the Company’s historical stock option investigation.
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Forrester Fourth-Quarter 2009 Information / Page 2
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables. The attached financial tables include selected balance sheet and cash flow data. We are finalizing adjustments to tax accounts in our balance sheet; full consolidated financial statements will be included in our 2009 Annual Report on Form 10-K. We do not expect any adjustments to affect our reported pro forma operating results.
“Forrester’s performance accelerated in the fourth quarter of 2009, capping a year in which we beat our plan,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “We met or exceeded our financial targets including revenue, operating margin, and EPS, and ended the year with client and dollar retention approaching pre-recession levels. Forrester’s role-based strategy is yielding increased relevancy to our clients, as shown in our financial results in 2009.”
“Coming out of the 2009 recession, we believe that now is the time to expand the sales force, invest in the infrastructure of the business, and enhance our client-facing technology,” said Michael Doyle, Forrester’s chief financial officer. “These investments will dampen the operating margins in 2010 as reflected in our full-year guidance.”
Forrester is providing first-quarter 2010 financial guidance as follows:
First-Quarter 2010 (GAAP):
•   Total revenues of approximately $57.5 million to $59.5 million.
•   Operating margin of approximately 10% to 12%.
•   Other income of approximately $250,000.
•   An effective tax rate of 40 percent.
•   Diluted earnings per share of approximately $0.16 to $0.20.
First-Quarter 2010 (Pro Forma):
Pro forma financial guidance for the first quarter of 2010 excludes stock-based compensation of $1.0 million to $1.2 million, amortization of acquisition-related intangible assets of approximately $0.9 million, and any gains or losses related to marketable and non-marketable investments.
•   Pro forma operating margin of approximately 13.5% to 15.5%.
•   Pro forma effective tax rate of 40%.
•   Pro forma diluted earnings per share of approximately $0.21 to $0.25.
Forrester is providing full-year 2010 guidance as follows:
Full-Year 2010 (GAAP):
•   Total revenues of approximately $240 million to $248 million.
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Forrester Fourth-Quarter 2009 Information / Page 3
•   Operating margin of approximately 11% to 12%.
•   Other income of approximately $1.0 million.
•   An effective tax rate of 40 percent.
•   Diluted earnings per share of approximately $0.72 to $0.78.
Full-Year 2010 (Pro Forma):
Pro forma financial guidance for full-year 2010 excludes stock-based compensation expense of $5.0 million to $6.0 million, amortization of acquisition-related intangible assets of approximately $3.6 million, and any gains or losses related to marketable and non-marketable investments.
•   Pro forma operating margin of approximately 14.5% to 15.5%.
•   Pro forma effective tax rate of 40 percent.
•   Pro forma diluted earnings per share of approximately $0.97 to $1.03.
About Forrester Research
Forrester Research (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com.
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 first quarter of and full-year 2010. 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 respond to business and economic conditions, particularly in light of the global economic environment, technology spending, market trends, competition, industry consolidation, the ability to attract and retain professional staff, possible variations in Forrester’s quarterly operating results, any cost savings related to reductions in force and associated actions, risks associated with Forrester’s ability to offer new products and services, and Forrester’s dependence on renewals of its membership-based research services and on key personnel. 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.
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Forrester Fourth-Quarter 2009 Information / Page 4
The consolidated statements of income and the table of selected balance sheet and cash flow data are attached.
Contact:
     
Michael Doyle
       Karyl Levinson
Chief Financial Officer
  Vice President, Corporate Communications
Forrester Research, Inc.
  Forrester Research, Inc.
+1 617.613.6000
  +1 617.613.6262
mdoyle@forrester.com
  press@forrester.com
© 2010, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

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Forrester Fourth-Quarter and Full Year Fiscal 2009 Results/Page 5
Forrester Research, Inc.
Consolidated Statements of Income
(Unaudited; in thousands, except per share data)
                                 
    Three months ended     Year ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
Revenues:
                                
Research services
   $ 40,758     $ 41,203     $ 157,726     $ 155,339  
Advisory services and other
     20,728       21,718       75,626       85,536  
 
                        
 
                                
Total revenues
     61,486       62,921       233,352       240,875  
 
                                
Operating expenses:
                                
Cost of services and fulfillment
     20,960       21,954       84,266       87,802  
Selling and marketing
     19,558       19,825       76,094       79,944  
General and administrative
     7,993       6,778       28,461       29,723  
Depreciation
     1,069       1,009       4,380       4,007  
Reorganization costs
     2,300       —       5,441       —  
Amortization of intangible assets
     539       959       2,290       1,435  
 
                        
 
                                
Total operating expenses
     52,419       50,525       200,932       202,911  
 
Income from operations
     9,067       12,396       32,420       37,964  
 
Other income, net
     115       152       2,297       5,373  
Gains (losses) from investments, net
     701       (663 )     (982 )     1,473  
 
                        
 
                                
Income before income taxes
     9,883       11,885       33,735       44,810  
 
                                
Income tax provision
     3,196       2,731       13,965       15,595  
 
                        
 
                                
Net Income
   $ 6,687     $ 9,154     $ 19,770     $ 29,215  
 
                        
 
                                
Diluted income per share
   $ 0.29     $ 0.39     $ 0.86     $ 1.24  
 
                        
 
                                
Diluted weighted average shares outstanding
     22,677       23,377       22,884       23,585  
 
                        
 
                                
Basic income per share
   $ 0.30     $ 0.40     $ 0.87     $ 1.27  
 
                        
 
                                
Basic weighted average shares outstanding
     22,372       23,079       22,645       23,062  
 
                        
 
                                
Pro forma data (1):
                                
 
Income from operations
   $ 9,067     $ 12,396     $ 32,420     $ 37,964  
Amortization of intangible assets
     539       959       2,290       1,435  
Reorganization costs
     2,300       —       5,441       —  
Investigation related expenses
     —       (208 )     —       877  
 
                                
Stock-based compensation included in the following expense categories:
                                
Cost of services and fulfillment
     480       682       2,961       2,776  
Selling and marketing
     239       266       1,123       988  
General and administrative
     471       438       2,027       1,594  
 
                        
 
                                
Pro forma income from operations
     13,096       14,533       46,262       45,634  
 
                                
Other income, net
     115       152       2,297       5,373  
 
                        
Pro forma income before income taxes
     13,211       14,685       48,559       51,007  
 
                                
Pro forma income tax provision
     5,284       5,727       19,424       19,893  
 
                        
 
                                
Pro forma net income
   $ 7,927     $ 8,958     $ 29,135     $ 31,114  
 
                        
 
                                
Pro forma diluted income per share
   $ 0.35     $ 0.38     $ 1.27     $ 1.32  
 
                        
Diluted weighted average shares outstanding
     22,677       23,377       22,884       23,585  
 
                        
 
(1)   Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. Our pro forma presentation excludes reorganization costs, amortization of intangible assets, stock-based compensation, net gains or losses from marketable and non-marketable investments and costs associated with the historical stock option investigation, as well as their related tax effects. The pro forma data does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States.
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Forrester Fourth-Quarter and Full Year Fiscal 2009 Results/Page 6
Forrester Research, Inc.
Selected Balance Sheet and Cash Flow Data
(Unaudited, in thousands)
                 
    December 31,
    2009   2008
Balance sheet data:
                
Cash, cash equivalents and marketable investments
   $ 259,792     $ 259,929  
Accounts receivable, net
   $ 67,436     $ 64,226  
Deferred revenue
   $ 117,888     $ 113,844  
                 
    Year ended
    December 31,
    2009   2008
Cash flow data:
                
Net cash provided by operating activities
   $ 43,022     $ 43,652  
Cash used for acquisitions
   $ (5,592 )   $ (22,406 )
Purchases of property and equipment
   $ (4,284 )   $ (3,698 )
Repurchases of common stock
   $ (20,399 )   $ (30,423 )