Perficient, Inc. (NASDAQ: PRFT) (“Perficient”), the leading
digital transformation consulting firm serving Global 2000® and
other large enterprise customers throughout North America, today
reported its financial results for the quarter ended September 30,
2015.
Financial Highlights
For the quarter ended September 30, 2015:
- Revenue increased 3% to $120.9 million
from $117.0 million for the third quarter of 2014;
- Services revenue increased 5% to $105.4
million from $100.0 million for the third quarter of 2014;
- Gross margin increased 2% to $40.4
million from $39.5 million for the third quarter of 2014;
- Adjusted earnings per share results (a
non-GAAP measure; see attached schedule, which reconciles to GAAP
earnings per share) on a fully diluted basis decreased to $0.36
from $0.37 for the third quarter of 2014;
- Earnings per share results on a fully
diluted basis remained flat at $0.22 for both the third quarter of
2015 and 2014;
- EBITDAS (a non-GAAP measure; see
attached schedule, which reconciles to GAAP net income) decreased
to $19.9 million from $20.7 million for the third quarter of
2014;
- Net income increased to $7.4 million
from $7.3 million for the third quarter of 2014; and
- Perficient repurchased approximately
13,000 shares of its common stock at a total cost of $0.2
million.
“Momentum around cloud and SaaS implementations, coupled with
the market’s growing awareness of our dominant and differentiated
digital transformation capabilities drove a strong rebound in the
third quarter and has us positioned for continued strength going
forward,” said Jeff Davis, chief executive officer and president.
“We’re making investments now that will substantially accelerate
our digital momentum in 2016 and ensure the world’s leading and
most innovative enterprises fully understand our unparalleled
digital solutions expertise and experience.”
Other Highlights
Among other recent achievements, Perficient:
- Strengthened its IBM analytics
capabilities and increased its geographic footprint by acquiring
Market Street Solutions, Inc., a Chattanooga, Tenn.-based IT
consulting firm specializing in the development, implementation and
integration of analytics and financial performance management
solutions;
- Received IBM’s Worldwide Analytics
Business Partner of the Year award, a distinguished premium IBM
partner honor encompassing all solutions under IBM’s Analytics
software brands including Big Data, Business Analytics, Enterprise
Content Management, Information Management, and Watson;
- Acquired the Salesforce Fullforce
Service Cloud Master designation in recognition of Perficient’s
expertise as a Salesforce Platinum Consulting Partner in delivering
next-generation digital experiences, and business optimization and
industry-related Service Cloud solutions;
- Received the 2015 Partner Excellence
Award from Oracle’s Health Sciences Global Business Unit for
innovative and groundbreaking work as a Platinum-level partner on
Oracle’s portfolio of clinical and pharmacovigilance applications;
and
- Added new customer-relationship and
follow-on projects with leading companies such as American Family
Insurance, Blue Cross Blue Shield of Michigan, Caesars
Entertainment, Cengage Learning, Continuant, Emerson, FordDirect,
Galderma Pharmaceuticals, GuideWell, Herman Miller, HID Global,
Medtronic, Northeastern University, Northside Hospital Healthcare
System in Atlanta, Oncor Electric, Southwest Airlines, Speedo,
SunEdison, Toyota, Volkswagen Group of America, and
Whataburger.
Business Outlook
The following statements are based on current expectations.
These statements are forward-looking and actual results may differ
materially. See “Safe Harbor Statement” below.
Perficient expects its fourth quarter 2015 services and software
revenue, including reimbursed expenses, to be in the range of $118
million to $128 million, comprised of $107 million to $112 million
of revenue from services, including reimbursed expenses, and $11.0
million to $16.0 million of revenue from sales of software. The
midpoint of fourth quarter 2015 services revenue guidance
represents growth of 5% over fourth quarter 2014 services
revenue.
The company is revising its full year 2015 revenue guidance to
be in the range of $458 million to $468 million and 2015 adjusted
earnings per share guidance to be in the range of $1.20 to
$1.24.
Conference Call Details
Perficient will host a conference call regarding third quarter
2015 financial results today at 10 a.m. Eastern.
WHAT: Perficient Reports Third Quarter 2015
ResultsWHEN: Thursday, Nov. 5, 2015, at 10 a.m.
EasternCONFERENCE CALL NUMBERS: 877-703-6102 (U.S. and
Canada); 857-244-7301 (International)PARTICIPANT PASSCODE:
97616979REPLAY TIMES: Thursday, Nov. 5, 2015, at 3 p.m.
Eastern, through Thursday, Nov. 12, 2015, at 12:59 p.m.
EasternREPLAY NUMBER: 888-286-8010 (U.S. and Canada)
617-801-6888 (International)REPLAY PASSCODE: 47601295
About Perficient
Perficient is the leading digital transformation consulting firm
serving Global 2000® and enterprise customers throughout North
America. With unparalleled information technology, management
consulting and creative capabilities, Perficient delivers vision,
execution and value with outstanding digital experience, business
optimization and industry solutions. Our work enables clients to
improve productivity and competitiveness; grow and strengthen
relationships with customers, suppliers and partners; and reduce
costs. Perficient’s professionals serve clients from a network of
offices across North America and offshore locations in India and
China. Traded on the Nasdaq Global Select Market, Perficient is a
member of the Russell 2000 index and the S&P SmallCap 600
index. Perficient is an award-winning Premier Level IBM business
partner, a Microsoft National Service Provider and Gold Certified
Partner, an Oracle Platinum Partner, and a Platinum Salesforce
Cloud Alliance Partner. For more information, visit
www.perficient.com.
Safe Harbor Statement
Some of the statements contained in this news release that are
not purely historical statements discuss future expectations or
state other forward-looking information related to financial
results and business outlook for 2015. Those statements are subject
to known and unknown risks, uncertainties, and other factors that
could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is
based on management’s current intent, belief, expectations,
estimates, and projections regarding our company and our industry.
You should be aware that those statements only reflect our
predictions. Actual events or results may differ
substantially. Important factors that could cause our actual
results to be materially different from the forward-looking
statements include (but are not limited to) those disclosed under
the heading “Risk Factors” in our annual report on Form 10-K for
the year ended December 31, 2014, and the following:
(1) the possibility that our actual results do not meet the
projections and guidance contained in this news release;
(2) the impact of the general economy and economic uncertainty
on our business;
(3) risks associated with the operation of our business
generally, including:
a) client demand for our services and
solutions;
b) maintaining a balance of our supply of
skills and resources with client demand;
c) effectively competing in a highly
competitive market;
d) protecting our clients’ and our data and
information;
e) risks from international operations
including fluctuations in exchange rates;
f) obtaining favorable pricing to reflect
services provided;
g) adapting to changes in technologies and
offerings; and
h) risk of loss of one or more significant
software vendors;
(4) legal liabilities, including intellectual property
protection and infringement or personally identifiable
information;
(5) risks associated with managing growth organically and
through acquisitions; and
(6) the risks detailed from time to time within our filings with
the Securities and Exchange Commission.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements.
This cautionary statement is provided pursuant to Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking
statements in this release are made only as of the date hereof and
we undertake no obligation to update publicly any forward-looking
statement for any reason, even if new information becomes available
or other events occur in the future.
PERFICIENT, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share data)
Three Months Ended
September 30, Nine Months Ended September 30,
2015 2014 2015
2014 Revenues Services $ 105,351
$ 99,975 $ 301,166 $ 286,780 Software and hardware 11,520 12,192
27,490 31,108 Reimbursable expenses 4,038
4,804 11,315 12,962 Total
revenues 120,909 116,971 339,971
330,850 Cost of revenues Project related expenses
63,274 60,257 185,324 175,561 Software and hardware costs 10,195
10,438 23,559 27,333 Reimbursable expenses 4,038 4,804 11,315
12,962 Other project related expenses 1,809 750 4,833 2,644 Stock
compensation 1,191 1,185 3,577
3,507 Total cost of revenues 80,507
77,434 228,608 222,007
Gross margin 40,402 39,537 111,363 108,843
Selling, general and administrative 21,665 20,058 66,054 58,879
Stock compensation 2,050 2,181
6,517 6,475 Total selling, general and
administrative 23,715 22,239 72,571 65,354 Depreciation
1,148 932 3,322 2,713 Amortization 3,357 4,045 10,569 10,511
Acquisition costs 488 (74 ) 509 2,495 Adjustment to fair value of
contingent consideration 99 -
273 (1,463 ) Income from operations 11,595
12,395 24,119 29,233
Net interest expense (501 ) (462 ) (1,602 ) (1,055 )
Net other (expense) income (29 ) 10
(300 ) 79 Income before income taxes 11,065 11,943
22,217 28,257 Provision for income taxes 3,691
4,637 6,780 11,519 Net income $
7,374 $ 7,306 $ 15,437 $ 16,738
Basic earnings per share $ 0.22 $ 0.23 $ 0.46 $ 0.53 Diluted
earnings per share $ 0.22 $ 0.22 $ 0.45 $ 0.51 Shares used
in computing basic earnings per share 33,498 32,118 33,292 31,470
Shares used in computing diluted earnings per share 34,187 33,329
34,163 33,076
PERFICIENT, INC. CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands)
September 30, December
31, 2015 2014
ASSETS Current assets: Cash and cash equivalents $ 8,692 $
10,935 Accounts receivable, net 111,894 113,928 Prepaid expenses
3,745 2,476 Other current assets 3,261 4,679
Total current assets 127,592 132,018 Property and equipment,
net 8,040 7,966 Goodwill 259,140 236,130 Intangible assets, net
52,221 46,105 Other non-current assets 3,829
3,823 Total assets $ 450,822 $ 426,042
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 13,768 $ 22,035 Other current liabilities
27,884 33,028 Total current liabilities 41,652
55,063 Long-term debt 61,000 54,000 Other non-current liabilities
11,832 12,251 Total liabilities 114,484
121,314 Stockholders' equity: Common stock 44 43 Additional
paid-in capital 358,048 334,645 Accumulated other comprehensive
loss (1,398 ) (651 ) Treasury stock (101,837 ) (95,353 ) Retained
earnings 81,481 66,044 Total
stockholders' equity 336,338 304,728
Total liabilities and stockholders' equity $ 450,822 $
426,042
About Non-GAAP Financial Information
This news release includes non-GAAP financial measures. For a
description of these non-GAAP financial measures, including the
reasons management uses each measure, and reconciliations of these
non-GAAP financial measures to the most directly comparable
financial measures prepared in accordance with Generally Accepted
Accounting Principles (“GAAP”), please see the section entitled
“About Non-GAAP Financial Measures” and the accompanying tables
entitled “Reconciliation of GAAP to Non-GAAP Measures.”
About Non-GAAP Financial Measures
Perficient provides non-GAAP financial measures for EBITDAS
(earnings before interest, income taxes, depreciation,
amortization, and stock compensation), adjusted net income, and
adjusted earnings per share data as supplemental information
regarding Perficient’s business performance. Perficient believes
that these non-GAAP financial measures are useful to investors
because they provide investors with a better understanding of
Perficient’s past financial performance and future results.
Perficient’s management uses these non-GAAP financial measures when
it internally evaluates the performance of Perficient’s business
and makes operating decisions, including internal operating
budgeting, performance measurement, and the calculation of bonuses
and discretionary compensation. Management excludes stock-based
compensation related to employee stock options and restricted stock
awards, the amortization of intangible assets, acquisition costs,
adjustments to the fair value of contingent consideration, and
income tax effects of the foregoing, when making operational
decisions.
Perficient believes that providing the non-GAAP financial
measures to its investors is useful because it allows investors to
evaluate Perficient’s performance using the same methodology and
information used by Perficient’s management. Specifically, adjusted
net income is used by management primarily to review business
performance and determine performance-based incentive compensation
for executives and other employees. Management uses EBITDAS to
measure operating profitability, evaluate trends, and make
strategic business decisions.
Non-GAAP financial measures are subject to inherent limitations
because they do not include all of the expenses included under GAAP
and because they involve the exercise of discretionary judgment as
to which charges are excluded from the non-GAAP financial measure.
However, Perficient’s management compensates for these limitations
by providing the relevant disclosure of the items excluded in the
calculation of EBITDAS, adjusted net income, and adjusted earnings
per share. In addition, some items that are excluded from adjusted
net income and adjusted earnings per share can have a material
impact on cash. Management compensates for these limitations by
evaluating the non-GAAP measure together with the most directly
comparable GAAP measure. Perficient has historically provided
non-GAAP financial measures to the investment community as a
supplement to its GAAP results to enable investors to evaluate
Perficient’s business performance in the way that management does.
Perficient’s definition may be different from similar non-GAAP
financial measures used by other companies and/or analysts.
The non-GAAP adjustments, and the basis for excluding them, are
outlined below:
Amortization of Intangible Assets
Perficient has incurred expense on amortization of intangible
assets primarily related to various acquisitions. Management
excludes these items for the purposes of calculating EBITDAS,
adjusted net income, and adjusted earnings per share. Perficient
believes that eliminating this expense from its non-GAAP financial
measures is useful to investors because the amortization of
intangible assets can be inconsistent in amount and frequency, and
is significantly impacted by the timing and magnitude of
Perficient’s acquisition transactions, which also vary
substantially in frequency from period to period.
Acquisition Costs
Perficient incurs transaction costs related to acquisitions
which are expensed in its GAAP financial statements. Management
excludes these items for the purposes of calculating EBITDAS,
adjusted net income, and adjusted earnings per share. Perficient
believes that excluding these expenses from its non-GAAP financial
measures is useful to investors because these are expenses
associated with each transaction, and are inconsistent in amount
and frequency causing comparison of current and historical
financial results to be difficult.
Adjustments to Fair Value of Contingent Consideration
Perficient is required to remeasure its contingent consideration
liability related to acquisitions each reporting period until the
contingency is settled. Any changes in fair value are recognized in
earnings. Management excludes these items for the purposes of
calculating adjusted net income and adjusted earnings per share.
Perficient believes that excluding these adjustments from its
non-GAAP financial measures is useful to investors because they are
related to acquisitions, and are inconsistent in amount and
frequency from period to period.
Stock-Based Compensation
Perficient incurs stock-based compensation expense under
Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Compensation – Stock Compensation.
Perficient excludes this item for the purposes of calculating
EBITDAS, adjusted net income, and adjusted earnings per share
because it is a non-cash expense, which Perficient believes is not
reflective of its business performance. The nature of stock-based
compensation expense also makes it very difficult to estimate
prospectively, since the expense will vary with changes in the
stock price and market conditions at the time of new grants,
varying valuation methodologies, subjective assumptions, and
different award types, making the comparison of current results
with forward looking guidance potentially difficult for investors
to interpret. The tax effects of stock-based compensation expense
may also vary significantly from period to period, without any
change in underlying operational performance, thereby obscuring the
underlying profitability of operations relative to prior periods.
Perficient believes that non-GAAP measures of profitability, which
exclude stock-based compensation, are widely used by analysts and
investors.
PERFICIENT, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) (in
thousands, except per share data)
Three Months Ended
September 30, Nine Months Ended September 30,
2015 2014 2015
2014 GAAP Net Income $ 7,374 $ 7,306 $ 15,437 $
16,738 Additions: Provision for income taxes 3,691 4,637 6,780
11,519 Amortization 3,357 4,045 10,569 10,511 Acquisition costs 488
(74 ) 509 2,495 Adjustment to fair value of contingent
consideration 99 - 273 (1,463 ) Stock compensation 3,241
3,366 10,094 9,982 Adjusted Net
Income Before Tax 18,250 19,280 43,662 49,782 Adjusted income tax
(1) 6,095 7,114 14,321 18,768
Adjusted Net Income $ 12,155 $ 12,166 $ 29,341 $
31,014 GAAP Earnings Per Share (diluted) $ 0.22 $
0.22 $ 0.45 $ 0.51 Adjusted Earnings Per Share (diluted) $ 0.36 $
0.37 $ 0.86 $ 0.94 Shares used in computing GAAP and Adjusted
Earnings Per Share (diluted) 34,187 33,329 34,163 33,076 (1)
The estimated adjusted effective tax rate of 33.4% and 36.9% for
the three months ended September 30, 2015 and 2014, respectively,
and 32.8% and 37.7% for the nine months ended September 30, 2015
and 2014, respectively, has been used to calculate the provision
for income taxes for non-GAAP purposes.
PERFICIENT, INC. RECONCILIATION OF GAAP TO
NON-GAAP MEASURES (unaudited) (in thousands)
Three
Months Ended September 30, Nine Months Ended September
30, 2015 2014
2015 2014 GAAP Net Income $ 7,374
$ 7,306
$ 15,437
$ 16,738 Additions: Provision for income taxes 3,691 4,637 6,780
11,519 Net interest expense 501 462 1,602 1,055 Net other expense
(income) 29 (10 ) 300 (79 ) Depreciation 1,148 932 3,322 2,713
Amortization 3,357 4,045 10,569 10,511 Acquisition costs 488
(74 )
509
2,495 Adjustment to fair value of contingent consideration 99
-
273
(1,463 ) Stock compensation 3,241
3,366
10,094
9,982 EBITDAS (1) $ 19,928
$ 20,664
$ 48,886
$ 53,471 (1) EBITDAS is a non-GAAP performance
measure and is not intended to be a performance measure that should
be regarded as an alternative to or more meaningful than either
GAAP operating income or GAAP net income. EBITDAS measures
presented may not be comparable to similarly titled measures
presented by other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105005809/en/
Perficient, Inc.Bill Davis,
314-529-3555bill.davis@perficient.com
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