~ Revenue Up 12%, Net Income Up 33%; Expands
Share Repurchase Program ~
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 March 31,
2016.
Financial Highlights
For the quarter ended March 31, 2016:
- Revenue increased 12% to $123.8 million
from $110.6 million for the first quarter 2015;
- Services revenue increased 11% to
$109.7 million from $98.6 million for the first quarter 2015;
- Gross margin increased 12% to $40.2
million from $36.1 million for the first quarter 2015;
- 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 $0.29
from $0.26 for the first quarter 2015;
- Earnings per share results on a fully
diluted basis increased to $0.16 from $0.12 for the first quarter
2015;
- Net income increased 33% to $5.4
million from $4.1 million for the first quarter 2015.
“Solid performance and record sales in Q1 have laid the
foundation for a strong year of growth for Perficient,” said Jeff
Davis, chief executive officer and president. “The world’s most
innovative enterprises continue to partner with Perficient on
digital experience, business optimization, and industry solutions
to drive business success. We expect the recent launch of our
full-service digital agency, Perficient Digital, to be a
significant contributor in the months and years ahead.”
Other Highlights
Among other recent achievements, Perficient:
- Launched a full-service digital agency,
Perficient Digital, to deliver exceptional, transformative customer
experiences and expand Perficient’s capacity to deliver creative
solutions that scale across complex businesses;
- Formally unveiled a newly-expanded
Domestic Delivery Center facility in Lafayette, La., to complement
Perficient’s Global Delivery Center network and strategy;
- Received recognition as a leading
vendor for API strategy and delivery from independent technology
and market advisor Forrester Research;
- Entered into a multi-year partnership
with Major League Baseball’s St. Louis Cardinals that includes a
variety of high-profile marketing and corporate engagement
benefits;
- Added new customer-relationship and
follow-on projects with leading companies such as Ancestry.com,
Baylor Scott & White Health, The Bon-Ton Stores, Ford Motor
Credit Co., GoPro, Herman Miller, NextGen, PCCA, Sports Endeavors,
and Varsity Spirit; and
- On May 3, 2016, Perficient's Board of
Directors expanded Perficient's stock repurchase program by
authorizing the repurchase of up to additional $10.0 million of our
common stock for a total repurchase program of $110.0 million and
extended the expiration date of the program from June 30, 2016, to
December 31, 2017. Since the program's inception in 2008,
Perficient has repurchased a total of 9.6 million shares at a cost
of $84.4 million.
Business Outlook
Perficient expects its second quarter 2016 services and software
revenue, including reimbursed expenses, to be in the range of $119
million to $129 million, comprised of $113 million to $119 million
of revenue from services (including reimbursed expenses) and $6
million to $10 million of revenue from sales of software. The
midpoint of second quarter 2016 services revenue (including
reimbursed expenses) guidance represents growth of 15% over second
quarter 2015.
Conference Call Details
Perficient will host a conference call regarding first quarter
2016 financial results today at 10 a.m. Eastern.
WHAT: Perficient Reports First Quarter 2016
ResultsWHEN: Thursday, May 5, 2016, at 10 a.m.
EasternCONFERENCE CALL NUMBERS: 866-515-2911 (U.S. and
Canada); 617-399-5125 (International)PARTICIPANT PASSCODE:
29619590REPLAY TIMES: Thursday, May 5, 2016, at 2 p.m.
Eastern, through Thursday, May 12, 2016REPLAY NUMBER:
888-286-8010 (U.S. and Canada); 617-801-6888
(International)REPLAY PASSCODE: 39724959
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 and its Perficient
Digital agency deliver 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, an Adobe Business Solution Partner, and a Gold
Salesforce Consulting 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 2016. 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, 2015 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;
h) risk of loss of one or more significant
software vendors;
i) making appropriate estimates and
assumptions in connection with preparing our consolidated financial
statements;
j) maintaining effective internal controls;
and
k) managing fluctuations in foreign currency
exchange rates;
(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
March 31, 2016 2015 Revenues Services $ 109,747 $
98,629 Software and hardware 9,476 8,502 Reimbursable expenses
4,620 3,467 Total revenues 123,843
110,598 Cost of revenues Cost of services 70,175 63,144
Software and hardware costs 7,412 6,728 Reimbursable expenses 4,620
3,467 Stock compensation 1,412 1,199 Total cost of
revenues 83,619 74,538 Gross margin 40,224
36,060 Selling, general and administrative 24,473 21,735
Stock compensation 2,241 2,308 Total selling, general
and administrative 26,714 24,043 Depreciation 1,192 1,081
Amortization 3,365 3,801 Acquisition costs 243 - Adjustment to fair
value of contingent consideration 238 85 Income from
operations 8,472 7,050 Net interest expense
520 553 Net other expense 103 280 Income before
income taxes 7,849 6,217 Provision for income taxes 2,443
2,151 Net income $ 5,406 $ 4,066 Basic
earnings per share $ 0.16 $ 0.12 Diluted earnings per share $ 0.16
$ 0.12 Shares used in computing basic earnings per share
33,911 33,046 Shares used in computing diluted earnings per share
34,842 34,164
PERFICIENT, INC. CONSOLIDATED
BALANCE SHEETS (unaudited) (in thousands)
March 31, December 31,
2016
2015 ASSETS Current assets: Cash and cash equivalents
$ 9,016 $ 8,811 Accounts receivable, net 116,428 120,612 Prepaid
expenses 3,456 3,297 Other current assets 6,067
7,032 Total current assets 134,967 139,752 Property
and equipment, net 7,781 7,891 Goodwill 269,606 269,383 Intangible
assets, net 50,706 53,408 Other non-current assets 3,813
3,930 Total assets $ 466,873 $ 474,364
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 12,736 $ 18,793 Other current
liabilities 28,997 37,783 Total current
liabilities 41,733 56,576 Long-term debt 56,000 56,000 Other
non-current liabilities 13,507 12,978
Total liabilities 111,240 125,554 Stockholders' equity:
Common stock 45 45 Additional paid-in capital 368,362 364,786
Accumulated other comprehensive loss (1,683 ) (1,875 ) Treasury
stock (105,548 ) (103,197 ) Retained earnings 94,457
89,051 Total stockholders' equity 355,633
348,810 Total liabilities and stockholders'
equity $ 466,873 $ 474,364
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 merger and
acquisition-related activities 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. In
addition, the Company adopted Accounting Standards Update No.
2016-09, Improvements to Employee Share-Based Payment Accounting,
on January 1, 2016. Perficient excludes stock-based compensation
expense and the related tax effects for the purposes of calculating
EBITDAS, adjusted net income, and adjusted earnings per share
because stock-based compensation 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 March 31,
2016 2015 GAAP Net Income
$ 5,406 $ 4,066 Additions: Provision for income taxes 2,443 2,151
Amortization 3,365 3,801 Acquisition costs 243 - Adjustment to fair
value of contingent consideration 238 85 Stock compensation
3,653 3,507 Adjusted Net Income Before Tax 15,348 13,610
Adjusted income tax (1) 5,372 4,832 Adjusted Net
Income $ 9,976 $ 8,778 GAAP Earnings Per Share (diluted) $
0.16 $ 0.12 Adjusted Earnings Per Share (diluted) $ 0.29 $ 0.26
Shares used in computing GAAP and Adjusted Earnings Per Share
(diluted) 34,842 34,164
(1) The estimated adjusted effective tax
rate of 35.0% and 35.5% for the three months ended March 31, 2016
and 2015, 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 March 31, 2016
2015 GAAP Net Income $ 5,406
$ 4,066 Additions: Provision for income taxes 2,443 2,151 Net
interest expense 520 553 Net other expense 103 280 Depreciation
1,192 1,081 Amortization 3,365 3,801 Acquisition costs 243
- Adjustment to fair value of contingent consideration 238
85 Stock compensation 3,653
3,507 EBITDAS (1) $ 17,163
$ 15,524 (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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160505005741/en/
PerficientBill Davis, 314-529-3555bill.davis@perficient.com
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