United States
Securities and Exchange Commission
Washington, DC 20549
 
Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported): March 5, 2015


PERFICIENT, INC.
(Exact Name of Registrant as Specified in its Charter)


Delaware
001-15169
74-2853258
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
555 Maryville University Drive, Suite 600, Saint Louis, Missouri
63141
(Address of Principal Executive Offices)
(Zip Code)

Registrant's telephone number, including area code (314) 529-3600
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
On March 5, 2015, Perficient, Inc. (“Perficient”) announced its financial results for the three and twelve months ended December 31, 2014. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.02.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
ITEM 8.01 OTHER EVENTS

On March 5, 2015, Perficient posted on the Investor Relations page of its website at www.perficient.com a slide presentation related to its fourth quarter 2014 financial results and operating metrics. A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information contained or incorporated in our website is not part of this filing.
 
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d)
Exhibits.
 
Exhibit
 
Number
Description
   
99.1
Perficient, Inc. Press Release, dated March 5, 2015, announcing financial results for the three and twelve months ended December 31, 2014
99.2
Perficient, Inc. Q4 2014 Financial Results Presentation
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
PERFICIENT, INC.
     
Date: March 5, 2015
By:
/s/ Paul E. Martin
   
Paul E. Martin
   
Chief Financial Officer
 

Exhibit Index
Exhibit
 
Number
Description
   
99.1
Perficient, Inc. Press Release, dated March 5, 2015, announcing financial results for the three and twelve months ended December 31, 2014
99.2
Perficient, Inc. Q4 2014 Financial Results Presentation




EXHIBIT 99.1
 
For more information, please contact:
Bill Davis, Perficient, 314-529-3555
bill.davis@perficient.com


PERFICIENT REPORTS FOURTH QUARTER AND FULL-YEAR 2014 RESULTS
~Revenue up 29%, EBITDAS up 21%; Provides 2015 Revenue Guidance Range of $470M to $505M
and Adjusted Earnings Per Share Range of $1.38 to $1.49~

SAINT LOUIS (March 5, 2014) – Perficient, Inc. (NASDAQ: PRFT) ("Perficient"), a leading information technology and management consulting firm serving Global 2000® and other large enterprise customers throughout North America, today reported its financial results for the quarter and year ended December 31, 2014.

Financial Highlights

For the quarter ended December 31, 2014:
·
Revenue increased 29% to $125.8 million from $97.5 million for the fourth quarter 2013;
·
Services revenue increased 16% to $99.9 million from $86.0 million for the fourth quarter 2013;
·
Adjusted earnings per share results (a non-GAAP measure; see attached schedule, which reconciles to GAAP earnings per share) on a fully diluted basis increased to $0.36 from $0.30 for the fourth quarter 2013;
·
Earnings per share results on a fully diluted basis increased to $0.19 from $0.17 for the fourth quarter 2013;
·
EBITDAS (a non-GAAP measure; see attached schedule, which reconciles to GAAP net income) increased to $19.0 million from $15.7 million for the fourth quarter 2013;
·
Net income increased 16% to $6.4 million from $5.5 million for the fourth quarter 2013; and
·
Perficient repurchased 351,000 shares of its common stock at a cost of $6.0 million.

For the year ended December 31, 2014:
·
Revenue increased 22% to $456.7 million from $373.3 million for 2013;
·
Services revenue increased 18% to $386.7 million from $326.6 million for 2013;
·
Adjusted earnings per share results (a non-GAAP measure; see attached schedule, which reconciles to GAAP earnings per share) on a fully diluted basis increased to $1.30 from $1.11 for 2013;
·
Earnings per share results on a fully diluted basis increased to $0.70 from $0.67 for 2013;
·
EBITDAS (a non-GAAP measure; see attached schedule, which reconciles to GAAP net income) increased to $72.5 million from $56.6 million for 2013;
·
Net income increased 8% to $23.2 million from $21.4 million for 2013; and
·
Perficient repurchased 807,000 shares of its common stock at a cost of $14.3 million.

"The fourth quarter capped another year of solid revenue and earnings growth at Perficient," said Jeffrey Davis, chief executive officer and president. "The methodical pursuit of our vision to be one of the world's leading consulting firms is rooted in a passion for helping the world's leading enterprises innovate and achieve. Our consistent and dependable growth results from a focused fiscal discipline and a commitment to growing our business for clients, employees, and shareholders."

"Strong software results, coupled with 40% services gross margin excluding stock compensation, drove top and bottom line results that exceeded our expectations during the quarter" said Paul Martin, chief financial officer. "We're well-positioned in 2015 to continue to take market share, and grow revenue and earnings."

 
Other Highlights
Among other recent achievements, Perficient:
 
·
Completed the acquisition of Zeon Solutions, Inc. and its subsidiary, Grand River Interactive LLC, which enhances and expands Perficient's e-commerce, content management, product information management, mobile and digital marketing services and solution expertise;
 
·
Expanded our service commitment to Partners In Health, a Boston-based nonprofit that delivers high-quality healthcare and serves impoverished communities around the world, from Haiti to Rwanda to Siberia;
 
·
Received the prestigious IBM Beacon Award for Outstanding Information Management Solution, a top honor awarded to those elite IBM Business Partners who have delivered exceptional solutions that drive business value and transform the way clients and industries do business; and
 
 
·
Added new customer relationships and follow-on projects with leading companies including Archer Daniels Midland, Cheniere Energy, Federated Co-operatives Limited, FordDirect, H&R Block, Kaiser Permanente, KLX, Kodak, NRG, PepsiCo, Sears Canada, the University of Houston, and Volkswagen Group of America
 
 
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 first quarter 2015 services and software revenue, including reimbursed expenses, to be in the range of $107.0 million to $116.5 million, comprised of $102.0 million to $107.5 million of revenue from services including reimbursed expenses and $5.0 million to $9.0 million of revenue from sales of software. The midpoint of first quarter 2015 services revenue guidance represents growth of 18% over first quarter 2014 services revenue.

The company is issuing a full year 2015 revenue guidance range of $470 million to $505 million and a 2015 adjusted earnings per share guidance range of $1.38 to $1.49. 
 
Conference Call Details
Perficient will host a conference call regarding fourth quarter and full-year 2014 financial results March 5 at 10 a.m. Eastern.

WHAT: Perficient Reports Fourth Quarter and Full-Year 2014 Results
WHEN: Thursday, March 5, 2015, at 10 a.m. Eastern
CONFERENCE CALL NUMBERS: 877-280-4960 (U.S. and Canada); 857-244-7317 (International)
PARTICIPANT PASSCODE: 70078770
REPLAY TIMES: Thursday, March 5, 2015, at 2 p.m. Eastern, through Thursday, March 12, 2015
REPLAY NUMBER: 888-286-8010 (U.S. and Canada) 617-801-6888 (International)
REPLAY PASSCODE: 79036253

About Perficient
Perficient is a leading information technology and management consulting firm serving Global 2000 and enterprise customers throughout North America. Perficient serves clients from a network of offices across North America and global locations in India and China. Perficient helps clients use Internet-based technologies to improve productivity and competitiveness; strengthen relationships with customers, suppliers and partners; and reduce information technology costs. 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.com 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 2014. 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, 2013 and the Form 10-Q for the period ended June 30, 2014:

(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;
f)
obtaining favorable pricing to reflect services provided;
g)
adapting to changes in technologies and offerings;
h)
risk of loss of one or more significant software vendors; and
i)
the recent implementation of our new Enterprise Resource Planning system;
(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.

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."


 
PERFICIENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
   
Three Months Ended
   
Year Ended
 
   
December 31,
 
December 31,
 
   
2014
 
2013
 
2014
 
2013
 
           
Revenues
         
Services
 
$
99,888
 
$
86,040
 
$
386,668
 
$
326,589
 
Software and hardware
   
21,668
   
7,055
   
52,776
   
30,224
 
Reimbursable expenses
   
4,286
   
4,370
   
17,248
   
16,512
 
Total revenues
   
125,842
   
97,465
   
456,692
   
373,325
 
                           
Cost of revenues
                         
Project personnel costs
   
59,237
   
52,026
   
235,151
   
199,664
 
Software and hardware costs
   
19,902
   
6,177
   
47,235
   
26,648
 
Reimbursable expenses
   
4,286
   
4,370
   
17,248
   
16,512
 
Other project related expenses
   
723
   
895
   
3,012
   
4,169
 
Stock compensation
   
1,203
   
873
   
4,711
   
3,233
 
Total cost of revenues
   
85,351
   
64,341
   
307,357
   
250,226
 
                           
Gross margin
   
40,491
   
33,124
   
149,335
   
123,099
 
                           
Selling, general and administrative
   
22,673
   
18,329
   
81,552
   
69,706
 
Stock compensation
   
2,174
   
2,019
   
8,650
   
7,895
 
     
15,644
   
12,776
   
59,133
   
45,498
 
                           
Depreciation
   
1,021
   
928
   
3,734
   
3,262
 
Amortization
   
3,942
   
2,224
   
14,453
   
7,974
 
Acquisition costs
   
951
   
854
   
3,446
   
2,297
 
Adjustment to fair value of contingent consideration
   
-
   
184
   
(1,463
)
 
287
 
Income from operations
   
9,730
   
8,586
   
38,963
   
31,678
 
                           
Net interest expense
   
(383
)
 
(138
)
 
(1,438
)
 
(293
)
Net other income (expense)
   
(84
)
 
142
   
(5
)
 
112
 
Income before income taxes
   
9,263
   
8,590
   
37,520
   
31,497
 
Provision for income taxes
   
2,839
   
3,077
   
14,357
   
10,065
 
Net income
 
$
6,424
 
$
5,513
 
$
23,163
 
$
21,432
 
                           
Basic earnings per share
 
$
0.20
 
$
0.18
 
$
0.73
 
$
0.71
 
Diluted earnings per share
 
$
0.19
 
$
0.17
 
$
0.70
 
$
0.67
 
                           
Shares used in computing basic earnings per share
   
32,383
   
30,314
   
31,698
   
30,294
 
Shares used in computing diluted earnings per share
   
33,403
   
32,155
   
33,158
   
31,808
 
 

PERFICIENT, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
         
    
December 31,
   
December 31,
 
   
2014
   
2013
 
ASSETS
       
Current assets:
       
Cash and cash equivalents
 
$
10,935
   
$
7,018
 
Accounts receivable, net
   
113,928
     
78,887
 
Prepaid expenses
   
2,476
     
2,569
 
Other current assets
   
4,679
     
6,759
 
Total current assets
   
132,018
     
95,233
 
Property and equipment, net
   
7,966
     
7,709
 
Goodwill
   
236,130
     
193,510
 
Intangible assets, net
   
46,105
     
25,487
 
Other non-current assets
   
3,823
     
3,810
 
Total assets
 
$
426,042
   
$
325,749
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
 
$
22,035
   
$
7,667
 
Other current liabilities
   
33,028
     
30,298
 
Total current liabilities
   
55,063
     
37,965
 
Long-term debt
   
54,000
     
19,000
 
Other non-current liabilities
   
12,251
     
9,294
 
Total liabilities
   
121,314
     
66,259
 
                 
Stockholders' equity:
               
Common stock
   
43
     
41
 
Additional paid-in capital
   
334,645
     
297,997
 
Accumulated other comprehensive loss
   
(651
)
   
(378
)
Treasury stock
   
(95,353
)
   
(81,051
)
Retained earnings
   
66,044
     
42,881
 
Total stockholders' equity
   
304,728
     
259,490
 
Total liabilities and stockholders' equity
 
$
426,042
   
$
325,749
 
                 
 

 
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
      
Year Ended
 
   
December 31,
   
December 31,
 
   
2014
   
2013
   
2014
   
2013
 
GAAP Net Income
 
$
6,424
   
$
5,513
   
$
23,163
   
$
21,432
 
    Additions:
                               
    Provision for income taxes
   
2,839
     
3,077
     
14,357
     
10,065
 
    Amortization
   
3,942
     
2,224
     
14,453
     
7,974
 
    Acquisition costs
   
951
     
854
     
3,446
     
2,297
 
    Adjustment to fair value of contingent consideration
   
-
     
184
     
(1,463
)
   
287
 
    Stock compensation
   
3,377
     
2,892
     
13,361
     
11,128
 
Adjusted Net Income Before Tax
   
17,533
     
14,744
     
67,317
     
53,183
 
    Adjusted income tax (1)
   
5,558
     
5,205
     
24,326
     
17,923
 
Adjusted Net Income
 
$
11,975
   
$
9,539
   
$
42,991
   
$
35,260
 
                                 
GAAP Earnings Per Share (diluted)
 
$
0.19
   
$
0.17
   
$
0.70
   
$
0.67
 
Adjusted Earnings Per Share (diluted)
 
$
0.36
   
$
0.30
   
$
1.30
   
$
1.11
 
Shares used in computing GAAP and Adjusted Earnings Per Share (diluted)
   
33,403
     
32,155
     
33,158
     
31,808
 

(1) The estimated adjusted effective tax rate of 31.7% and 35.3% for the three months ended December 31, 2014 and 2013, respectively, and 36.1% and 33.7% for the year ended  December 31, 2014 and 2013, 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 December 31,
     
Year Ended December 31,
 
   
2014
   
2013
     
2014
     
2013
 
GAAP Net Income
 
$
6,424
   
$
5,513
     
$
23,163
     
$
21,432
 
    Additions:
                                   
    Provision for income taxes
   
2,839
     
3,077
       
14,357
       
10,065
 
    Net interest expense
   
383
     
138
       
1,438
       
293
 
    Net other expense (income)
   
84
     
(142
)
     
5
       
(112
)
    Depreciation
   
1,021
     
928
       
3,734
       
3,262
 
    Amortization
   
3,942
     
2,224
       
14,453
       
7,974
 
    Acquisition costs
   
951
     
854
       
3,446
       
2,297
 
    Adjustment to fair value of contingent consideration
   
-
     
184
       
(1,463
)
     
287
 
    Stock compensation
   
3,377
     
2,892
       
13,361
       
11,128
 
EBITDAS (1)
 
$
19,021
   
$
15,668
     
$
72,494
     
$
56,626
 

(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.



EXHIBIT 99.2

 

 

 

 

 

 

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