Forrester Research Reports 2016 Fourth-Quarter And Full-Year Financial Results

CAMBRIDGE, Mass., Feb. 8, 2017 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2016 fourth-quarter and full-year financial results.

Fourth-Quarter Financial Performance

Total revenues were $83.4 million for the fourth quarter of 2016, compared with $81.0 million for the fourth quarter of 2015. Research revenues increased 1%, and advisory services and events revenues increased 7%, compared with the fourth quarter of 2015.

On a GAAP basis, net income was $5.8 million, or $0.31 per diluted share, for the fourth quarter of 2016, compared with net income of $2.0 million, or $0.11 per diluted share, for the same period in 2015.

On a pro forma basis, net income was $7.1 million, or $0.38 per diluted share, for the fourth quarter of 2016, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $2.2 million, amortization of acquisition-related intangible assets of $0.2 million, and net investment gains of $0.3 million. This compares with pro forma net income of $4.3 million, or $0.24 per diluted share, for the same period in 2015, which reflects a pro forma tax rate of 38%. Pro forma net income for the fourth quarter of 2015 excludes stock-based compensation of $2.5 million, amortization of acquisition-related intangible assets of $0.2 million, and net investment losses of $0.3 million.

"Forrester attained revenue guidance for 2016 while exceeding its operating income and EPS guidance for the fourth quarter and full year," said George F. Colony, Forrester's chairman and chief executive officer. "In 2017, the company will complete the rollout of its new selling model and accelerate the digitization of its product lines. These efforts will enable the company to reach double-digit growth in 2018 and beyond."

Year Ended December 31, 2016, Financial Performance

Total revenues were $326.1 million, compared with $313.7 million for the same period in 2015. Research revenues increased 2%, and advisory services and events revenues increased 7%, compared with 2015.

On a GAAP basis, net income was $17.7 million, or $0.97 per diluted share, for 2016, compared with net income of $12.0 million, or $0.66 per diluted share, for 2015.

On a pro forma basis, net income was $24.8 million, or $1.36 per diluted share, for 2016, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $8.0 million, amortization of acquisition-related intangible assets of $0.8 million, reorganization costs of $1.0 million, and net investment losses of $0.8 million. This compares with pro forma net income of $20.5 million, or $1.13 per diluted share, for 2015, which reflects a pro forma tax rate of 38%. Pro forma net income for 2015 excludes stock-based compensation of $8.3 million, amortization of acquisition-related intangible assets of $0.9 million, and reorganization costs of $4.4 million.

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

2017 Guidance

Forrester is providing first-quarter 2017 financial guidance as follows:

First-Quarter 2017 (GAAP):

• Total revenues of approximately $74.5 million to $77.5 million.
• Operating margin of approximately 2.0% to 4.0%.
• Other income, net of zero.
• An effective tax rate of 40%.
• Diluted earnings per share of approximately $0.05 to $0.09.

First-Quarter 2017 (Pro Forma):

Pro forma financial guidance for the first quarter of 2017 excludes stock-based compensation expense of $2.0 million to $2.2 million, amortization of acquisition-related intangible assets of approximately $0.2 million, and any investment gains or losses.

• Pro forma operating margin of approximately 5.0% to 7.0%.
• Pro forma effective tax rate of 40%.
• Pro forma diluted earnings per share of approximately $0.12 to $0.16.

Our full-year 2017 guidance is as follows:

Full-Year 2017 (GAAP):

• Total revenues of approximately $324.0 million to $332.0 million.
• Operating margin of approximately 7.8% to 8.8%.
• Other income, net of zero.
• An effective tax rate of 40%.
• Diluted earnings per share of approximately $0.84 to $0.91.

Full-Year 2017 (Pro Forma):

Pro forma financial guidance for full-year 2017 excludes stock-based compensation expense of $7.8 million to $8.3 million, amortization of acquisition-related intangible assets of approximately $0.8 million, and any investment gains or losses.

• Pro forma operating margin of approximately 10.5% to 11.5%.
• Pro forma effective tax rate of 40%.
• Pro forma diluted earnings per share of approximately $1.13 to $1.20.

Quarterly Dividend

Forrester is announcing today that its board of directors has authorized a 6% increase to its regular quarterly dividend from $0.18 per share to $0.19 per share. The next dividend of $0.19 per share is payable March 15, 2017, to shareholders of record on March 1, 2017.

About Forrester Research

Forrester Research is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester's unique insights are grounded in annual surveys of more than 500,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, visit 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 2017, statements about the success of operational improvements, 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.

The consolidated statements of income and the table of key financial data are attached.

Contact:

Michael Doyle
Chief Financial Officer
Forrester Research, Inc.
+1 617-613-6000
[email protected]

Meaghan Rhyasen
Public Relations
Forrester Research, Inc.
+1 617-613-6070
[email protected]

© 2017, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

SOURCE Forrester Research, Inc.

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