~ Company 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 and year ended
December 31, 2016.
Financial Highlights
For the quarter ended December 31, 2016:
- Revenue decreased 11% to $119.6 million
from $133.7 million for the fourth quarter 2015;
- Services revenue decreased 11% to $98.0
million from $110.3 million for the fourth quarter 2015;
- Net income decreased 51% to $3.7
million from $7.6 million for the fourth quarter 2015;
- GAAP earnings per share results on a
fully diluted basis decreased to $0.11 from $0.22 for the fourth
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 decreased to $0.27
from $0.37 for the fourth quarter 2015; and
- EBITDAS (a non-GAAP measure; see
attached schedule, which reconciles to GAAP net income) decreased
to $15.4 million from $19.8 million for the fourth quarter
2015.
For the year ended December 31, 2016:
- Revenue increased 3% to $487.0 million
from $473.6 million for 2015;
- Services revenue increased 2% to $418.6
million from $411.5 million for 2015;
- Net income decreased 11% to $20.5
million from $23.0 million for 2015;
- GAAP earnings per share results on a
fully diluted basis decreased to $0.58 from $0.67 for 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 decreased to $1.08
from $1.22 for 2015; and
- EBITDAS (a non-GAAP measure; see
attached schedule, which reconciles to GAAP net income) decreased
to $64.2 million from $68.7 million for 2015.
“2016 was marked by the formal launch of Perficient Digital,
increased leverage of our Global Delivery Centers, an investment in
expanded sales capacity, growth in many key client relationships
and the continued strengthening of our enterprise partnerships with
Adobe, IBM, Microsoft, Oracle, and Salesforce,” said Jeffrey Davis,
chief executive officer and president. “In 2017, we’re focused on a
comprehensive plan we’re confident will drive margin growth, and
we’re optimistic we’ll continue to expand our portfolio and
geographic presence through an active and ongoing M&A
program.”
Other Highlights
Among other recent achievements, Perficient:
- Strengthened its management consultancy
capabilities with the acquisition of RAS & Associates, LLC, a
Denver-based firm specializing in strategy, operations and business
process optimization consulting;
- Received a third-consecutive IBM Beacon
Award, this time for Outstanding Watson Solution, which recognizes
a Watson-based predictive modeling solution that reduces patient
readmission rates at healthcare facilities;
- Received the 2016 Salesforce Partner
Innovation Award in Healthcare and Life Sciences for helping
NextGen Healthcare implement Community Cloud to enhance its case
and knowledge management and boost its self-service capabilities
while improving customer satisfaction by 31%;
- Received through its digital agency,
Perficient Digital, the Web Marketing Association’s 2016
MobileWebAward for design and development of a timekeeping
application serving Lathem Time Corp, a world leader in the design
and manufacture of timekeeping products for business;
- Added new customer relationships and
follow-on projects with leading companies such as Alliant Energy,
American Express, BayCare, Enterprise Rent-a-Car, Flagstar Bank,
FordDirect, Hulu, Hunter Douglas, Jack Henry, Learning Care Group,
Lids, National Geographic, State Farm, Texas Instruments, US Bank,
and Volkswagen Group of America;
- Expanded Perficient's stock repurchase
program on February 21, 2017, by authorizing the repurchase of up
to an additional $25.0 million of our common stock for a total
repurchase program of $135.0 million since the program’s inception
in 2008, and extended the expiration date of the program to
December 31, 2018 (as of December 31, 2016, Perficient has
repurchased a total of 10.6 million shares at a cost of $102.4
million); and
- Named CEO and President Jeffrey Davis
as Chairman of the Board of Directors.
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 2017 services and software
revenue, including reimbursed expenses, to be in the range of
$109.7 million to $120.2 million, comprised of $102.0 million to
$107.5 million of revenue from services including reimbursed
expenses and $7.7 million to $12.7 million of revenue from sales of
software.
The company is issuing its full year 2017 revenue guidance range
of $485 million to $515 million, its 2017 GAAP earnings per share
guidance of $0.60 to $0.75 and 2017 adjusted earnings per share (a
non-GAAP measure; see attached schedule which reconciles to GAAP
earnings per share guidance) range of $1.17 to $1.31.
Conference Call Details
Perficient will host a conference call regarding fourth quarter
and full-year 2016 financial results on Tuesday, February 28, 2017,
at 10 a.m. Eastern time.
WHAT: Perficient Reports Fourth Quarter and Full-Year
2016 ResultsWHEN: Tuesday, February 28, 2017, at 10 a.m.
Eastern timeCONFERENCE CALL NUMBERS: 844-742-4248 (U.S. and
Canada); 661-378-9471 (International)PARTICIPANT PASSCODE:
57852097REPLAY TIMES: Tuesday, February 28, at 1 p.m.
Eastern time, through Tuesday, March 7REPLAY NUMBER:
855-859-2056 (U.S. and Canada); 404-537-3406
(International)REPLAY PASSCODE: 57852097
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
Platinum 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 2017. 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 most recently filed annual report
on Form 10-K, 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 uncertainties resulting from changes
to policies and laws following the U.S. elections in November
2016;
(4) 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) changes to immigration policies;
g) obtaining favorable pricing to reflect
services provided;
h) adapting to changes in technologies and
offerings;
i) risk of loss of one or more significant
software vendors;
j) making appropriate estimates and
assumptions in connection with preparing our consolidated financial
statements;
k) maintaining effective internal controls;
and
l) changes to tax levels, audits,
investigations, tax laws or their interpretation;
(5) legal liabilities, including intellectual property
protection and infringement or the disclosure of personally
identifiable information;
(6) risks associated with managing growth organically and
through acquisitions; and
(7) 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 December 31, Year
Ended December 31, 2016 2015 2016
2015 Revenues Services $ 98,002 $ 110,303 $ 418,589 $
411,469 Software and hardware 18,047 19,132 49,954 46,622
Reimbursable expenses 3,541 4,215
18,439 15,530 Total revenues 119,590
133,650 486,982 473,621
Cost of revenues (exclusive of
depreciation and amortization, shown separately below)
Cost of services 62,138 66,743 268,347 256,900 Software and
hardware costs 16,233 17,611 43,581 41,170 Reimbursable expenses
3,541 4,215 18,439 15,530 Stock compensation 1,354
1,234 5,335 4,811 Total cost of
revenues 83,266 89,803 335,702
318,411 Gross margin 36,324 43,847 151,280
155,210 Selling, general and administrative 22,236 25,250
92,380 91,304 Stock compensation 2,248 2,142
8,884 8,659 Total selling, general and
administrative 24,484 27,392 101,264 99,963 Depreciation
1,249 1,174 4,867 4,496 Amortization 3,434 3,250 13,371 13,819
Acquisition costs 537 726 1,252 1,235 Adjustment to fair value of
contingent consideration 138 172 (1,679
) 445 Income from operations 6,482
11,133 32,205 35,252 Net
interest expense 313 483 1,636 2,085 Net other (income) expense
(34 ) 32 60 332 Income
before income taxes 6,203 10,618 30,509 32,835
Provision for income taxes 2,510 3,048
10,050 9,828 Net income $ 3,693 $ 7,570
$ 20,459 $ 23,007 Basic earnings per share $
0.11 $ 0.22 $ 0.60 $ 0.69 Diluted earnings per share $ 0.11 $ 0.22
$ 0.58 $ 0.67 Shares used in computing basic earnings per
share 33,971 33,729 34,023 33,408 Shares used in computing diluted
earnings per share 34,873 34,548 35,001 34,324
PERFICIENT, INC. CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands)
December 31, December
31, 2016 2015 ASSETS Current assets: Cash
and cash equivalents $ 10,113 $ 8,811 Accounts receivable, net
103,702 120,612 Prepaid expenses 3,353 3,297 Other current assets
5,331 7,032 Total current assets
122,499 139,752 Property and equipment, net 8,888 7,891 Goodwill
275,205 269,383 Intangible assets, net 45,115 53,408 Other
non-current assets 4,869 3,930 Total
assets $ 456,576 $ 474,364
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
18,416 $ 18,793 Other current liabilities 27,637
37,783 Total current liabilities 46,053 56,576
Long-term debt 32,000 56,000 Other non-current liabilities
19,058 12,978 Total liabilities 97,111 125,554
Stockholders' equity: Common stock 46 45 Additional paid-in
capital 379,094 364,786 Accumulated other comprehensive loss (2,743
) (1,875 ) Treasury stock (126,442 ) (103,197 ) Retained earnings
109,510 89,051 Total stockholders'
equity 359,465 348,810 Total
liabilities and stockholders' equity $ 456,576 $ 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, stock compensation, acquisition costs, and adjustment
to fair value of contingent consideration), 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, net
other income and expense, 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 December 31,
Year Ended December 31, 2016 2015 2016
2015 GAAP Net Income $ 3,693 $ 7,570 $ 20,459 $ 23,007
Adjustments: Provision for income taxes 2,510 3,048 10,050 9,828
Amortization 3,434 3,250 13,371 13,819 Acquisition costs 537 726
1,252 1,235 Adjustment to fair value of contingent consideration
138 172 (1,679 ) 445 Stock compensation 3,602 3,376
14,219 13,470 Adjusted Net Income Before Tax
13,914 18,142 57,672 61,804 Adjusted income tax (1) 4,647
5,424 19,781 19,777 Adjusted Net Income
$ 9,267 $ 12,718 $ 37,891 $ 42,027 GAAP Earnings Per
Share (diluted) $ 0.11 $ 0.22 $ 0.58 $ 0.67 Adjusted Earnings Per
Share (diluted) $ 0.27 $ 0.37 $ 1.08 $ 1.22 Shares used in
computing GAAP and Adjusted Earnings Per Share (diluted) 34,873
34,548 35,001 34,324
(1) The estimated adjusted effective tax rate of 33.4% and 29.9%
for the three months ended December 31, 2016 and 2015,
respectively, and 34.3% and 32.0% for the year ended December 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 December 31, Year
Ended December 31, 2016 2015 2016
2015 GAAP Net Income $ 3,693 $ 7,570 $ 20,459 $ 23,007
Adjustments: Provision for income taxes 2,510 3,048 10,050 9,828
Net interest expense 313 483 1,636 2,085 Net other (income) expense
(34 ) 32 60 332 Depreciation 1,249 1,174 4,867 4,496 Amortization
3,434 3,250 13,371 13,819 Acquisition costs 537 726 1,252 1,235
Adjustment to fair value of contingent consideration 138 172 (1,679
) 445 Stock compensation 3,602 3,376
14,219 13,470 EBITDAS (1) $ 15,442 $ 19,831 $
64,235 $ 68,717
(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.
PERFICIENT, INC. RECONCILIATION OF GAAP TO NON-GAAP
MEASURES (unaudited)
2017 - Low end
2017 - High end
of adjusted goal
of adjusted goal Full Year GAAP EPS $ 0.60 $ 0.75 Non-GAAP
adjustment (1): Non-GAAP reconciling items 0.89 0.87 Tax effect of
reconciling items (0.32 ) (0.31 ) Full Year Adjusted
EPS $ 1.17 $ 1.31
(1) Non-GAAP adjustment represents the impact of amortization
expense, stock compensation, acquisition costs, and adjustments to
fair value of contingent consideration, net of the tax effect of
these adjustments, divided by fully diluted shares. Perficient
currently expects its 2017 effective income tax rate to be
34.1%.
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version on businesswire.com: http://www.businesswire.com/news/home/20170228005964/en/
PerficientBill Davis, 314-529-3555Bill.Davis@perficient.com
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