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
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 ResultsWHEN: Thursday, March 5, 2015, at 10 a.m.
EasternCONFERENCE CALL NUMBERS: 877-280-4960 (U.S. and
Canada); 857-244-7317 (International)PARTICIPANT PASSCODE:
70078770REPLAY TIMES: Thursday, March 5, 2015, at 2 p.m.
Eastern, through Thursday, March 12, 2015REPLAY 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 December 31,
Year Ended 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 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 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.
PerficientBill Davis, 314-529-3555bill.davis@perficient.com
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