FOR IMMEDIATE RELEASE
Cambridge, Mass., July 18, 2001 . . . Forrester Research, Inc. (Nasdaq: FORR), a leading provider of research and analysis on emerging technologies, today announced its financial results for the three months ended June 30, 2001. For the second quarter of 2001, revenues increased 21% to $46.4 million from $38.3 million in the second quarter of 2000. Net income for the second quarter of 2001 rose 17% to $5.7 million, compared with net income of $4.9 million for the same period last year. Diluted earnings per share for the second quarter of 2001 increased to $0.24, compared with earnings of $0.20 per share for the second quarter of 2000. For the second quarter of 2001, the agreement value of Forrester`s core research and advisory services increased to $155.2 million from $148.6 million in the second quarter of 2000. Deferred revenue for the second quarter of 2001 decreased to $76.1 million at June 30, 2001, from $81.7 million in the second quarter of 2000.
"Forrester continued to record top- and bottom-line growth in a very challenging market environment," said George F. Colony, chairman of the board and chief executive officer. "While renewals were down from previous quarters, our overall performance reflects the loyalty of our solid Global 3,500 customer base, the value of our research product suite, our healthy Events offerings, and our continuing commitment to conservative financial management principles."
For the six-month period ended June 30, 2001, Forrester reported that revenues increased 30% to $90.1 million from $69.1 million for the same period one year ago. Net income for the first six months of 2001 was $10.5 million, a 26% increase over net income of $8.3 million for the same period last year. Diluted earnings per share increased to $0.44 per share in the six months ended June 30, 2001, compared with $0.35 per share in the comparable period of 2000.
"During the second quarter we continued to expand our product offerings," Colony stated. "For example, we increased the breadth of eBusiness TechRankings™, our product that helps companies choose the best emerging technologies for eBusiness. At a time when budgets are being cut, the inclusion of more than 100 new criteria on the vendor assessments in TechRankings provides our clients with an even greater return on investment quickly."
Forrester also launched the Consumer Packaged Goods (CPG) Market Focus during the quarter, building on the success of Netquity™, a product developed in partnership with Information Resources, Inc. (IRI). "We saw a tremendous opportunity to expand our CPG research, given the size and complexity of the market as brand-management strategies must evolve to incorporate technology," Colony said. "The result is a unique combination of hard-hitting strategic analysis, technology understanding, and industry-specific data that helps CPG companies implement new strategies to reach consumers."
Additionally, Forrester announced partnerships with Experian®, Mediamark Research (MRI), and Nielsen//NetRatings during the second quarter. As part of the partnerships, Forrester`s Technographics® consumer segmentation, which helps companies understand how technology impacts consumer attitudes and behavior, will be incorporated into products that extend the offerings of Forrester`s partners. "By partnering with Forrester, these companies are expanding the range of their products and providing marketers with highly advanced tools for targeting and acquiring customers," said Colony.
Events activity was a key performance area for the company during the second quarter of 2001. Forrester hosted five Forums during the period, among them the B2B Forum in Scottsdale, Ariz.; the Finance Forum in New York; and the first ever Telecom Forum in Washington, D.C. Internationally, the company hosted its inaugural eCommerce Canada Forum, as well as the Media Forum Europe in Amsterdam, Netherlands. "Despite diminished travel budgets, we are pleased to report that our Forum attendance and ratings remain strong and that participant feedback centers on Forrester`s ability to effectively address the business and technical issues that these attendees find critical," Colony said.
"While our business model remains solid, we expect to face a difficult economic climate for the near term as the slowdown in technology capital spending continues. Based on lower renewal rates and a decrease in deferred revenue, we are revising our guidance for the third quarter and full-year 2001," continued Colony. Forrester`s expectations for 2001 financial results are as follows: Year 2001
Forrester provided a financial outlook for 2001 when it released its first-quarter results on April 24, 2001. Since then, the economic environment has deteriorated. As a result, Forrester is removing all of its previously issued year 2001 guidance and issuing the following expectations for 2001:
Total revenues of approximately $165.0 million to $170.0 million.
Operating margin of approximately 15% to 16%.
Diluted earnings per share of approximately $0.87 to $0.89.
2001 estimates are exclusive of an expected one-time charge of $3.0 million to $4.0 million related to the reorganization and workforce reduction.
For the third quarter of 2001, Forrester aims to achieve the following financial targets:
Total revenues of approximately $37.0 million to $39.0 million.
Operating margin of approximately 14% to 15%.
Diluted earnings per share of approximately $0.19 to $0.20.
Third-quarter estimates are exclusive of an expected one-time charge of $3.0 million to $4.0 million related to the reorganization and workforce reduction.
For the fourth quarter of 2001, Forrester aims to achieve the following financial targets:
Total revenues of approximately $38.0 million to $41.0 million.
Operating margin of approximately 18% to 19%.
Diluted earnings per share of approximately $0.23 to $0.25.
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 and operating targets and statements about the potential success of product offerings. 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 anticipate business and economic conditions, market trends, competition, the need to retain professional staff, possible variations in Forrester`s quarterly operating results, Forrester`s dependence on renewals of its membership-based research services and on key personnel, and risks associated with Forrester`s ability to offer new products and services. Forrester Research 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.