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 ended
June 30, 2015.
Financial Highlights
For the quarter ended June 30, 2015:
- Revenue decreased 7% to $108.5 million
from $116.7 million for the second quarter of 2014;
- Services revenue decreased 1% to $97.2
million from $98.3 million for the second quarter of 2014;
- Gross margin decreased 8% to $34.9
million from $37.8 million for the second 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 $0.25
from $0.33 for the second quarter of 2014;
- Earnings per share results on a fully
diluted basis decreased to $0.12 from $0.19 for the second quarter
of 2014;
- EBITDAS (a non-GAAP measure; see
attached schedule, which reconciles to GAAP net income) decreased
to $13.4 million from $18.8 million for the second quarter of
2014;
- Net income decreased to $4.0 million
from $6.4 million for the second quarter of 2014; and
- Perficient repurchased approximately
130,000 shares of its common stock at a total cost of $2.6
million.
“We believe strong second quarter bookings and business momentum
will drive substantial margin and earnings improvements in the
second half of 2015,” said Jeff Davis, chief executive officer and
president. “The world’s most innovative enterprises continue to
seek our partnership and guidance on digital experience, business
optimization and industry solutions that leverage a variety of
leading technology products and platforms.”
Other Highlights
Among other recent achievements, Perficient:
- Received U.S. Partner and Industry Team
Partner of the Year honors from Microsoft, the result of Perficient
sweeping Microsoft’s regional Enterprise Platform Group awards.
Perficient was named Microsoft’s East Region National Solution
Provider Partner of the Year, Central Region NSP Partner of the
Year, and West Region NSP Partner of the Year, the first time
Perficient has won all three honors at once;
- Received 2015 Top Workplace awards from
the St. Louis Post-Dispatch and Minneapolis Star Tribune. The honor
was the third in a row from the Post-Dispatch. Perficient was
honored previously by the Star Tribune in 2012 and 2013; and
- Added new customer relationships and
follow-on projects with leading companies such as Bell Aliant, Blue
Shield of California, Cengage Learning, Energizer Holdings, Gulf
States Toyota, Kaiser Permanente, Royal Caribbean Cruise Lines, the
St. Louis Rams, and Symantec.
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 third quarter 2015 services and software
revenue, including reimbursed expenses, to be in the range of
$111.5 million to $122.0 million, comprised of $104.5 million to
$110.0 million of revenue from services including reimbursed
expenses and $7.0 million to $12.0 million of revenue from sales of
software. The midpoint of third quarter 2015 services revenue
guidance represents growth of 7% over third quarter 2014 services
revenue.
Conference Call Details
Perficient will host a conference call regarding second quarter
2015 financial results today at 10 a.m. Eastern.
WHAT: Perficient Reports Second Quarter 2015
ResultsWHEN: Thursday, July 30, 2015, at 10 a.m.
EasternCONFERENCE CALL NUMBERS: 800-884-5695 (U.S. and
Canada); 617-786-2960 (International)PARTICIPANT PASSCODE:
62080438REPLAY TIMES: Thursday, July 30, 2015, at 1 p.m.
Eastern, through Thursday, Aug. 6, 2015, at 11:59 p.m.
EasternREPLAY NUMBER: 888-286-8010 (U.S. and Canada)
617-801-6888 (International)REPLAY PASSCODE: 69293494
About Perficient
Perficient is a leading information technology and management
consulting firm serving Global 2000 and enterprise customers
throughout North America. Perficient delivers digital experience,
business optimization and industry solutions that enable clients to
improve productivity and competitiveness; strengthen relationships
with customers, suppliers and partners; and reduce costs.
Perficient’s professionals serve clients from locations across
North America and offshore facilities in Europe, 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 Solution 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;
h) risk of loss of one or more significant
software vendors; and
i) the implementation of our new enterprise
resource planning system in July 2014;
(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 June 30, Six Months
Ended June 30, 2015 2014 2015 2014
Revenues Services $ 97,186 $ 98,316 $ 195,815 $ 186,805 Software
and hardware 7,468 13,913 15,970 18,916 Reimbursable expenses
3,810 4,480 7,277
8,158 Total revenues 108,464 116,709
219,062 213,879 Cost of
revenues Project personnel costs 61,103 59,862 123,350 115,525
Software and hardware costs 6,636 12,393 13,364 16,895 Reimbursable
expenses 3,810 4,480 7,277 8,158 Other project related expenses 827
886 1,723 1,672 Stock compensation 1,187 1,240
2,387 2,322 Total cost of
revenues 73,563 78,861 148,101
144,572 Gross margin 34,901 37,848
70,961 69,307 Selling, general and administrative 22,653
20,253 44,389 38,823 Stock compensation 2,160
2,180 4,467 4,293 Total selling,
general and administrative 24,813 22,433 48,856 43,116
Depreciation 1,093 870 2,174 1,781 Amortization 3,411 3,730 7,212
6,466 Acquisition costs 21 1,076 21 2,569 Adjustment to fair value
of contingent consideration 89 (1,677 )
174 (1,463 ) Income from operations 5,474
11,416 12,524 16,838
Net interest expense (548 ) (425 ) (1,101 ) (593 )
Net other income (expense) 9 49
(271 ) 69 Income before income taxes 4,935 11,040
11,152 16,314 Provision for income taxes 938
4,653 3,089 6,881 Net income $
3,997 $ 6,387 $ 8,063 $ 9,433
Basic earnings per share $ 0.12 $ 0.20 $ 0.24 $ 0.30 Diluted
earnings per share $ 0.12 $ 0.19 $ 0.24 $ 0.29 Shares used
in computing basic earnings per share 33,333 31,564 33,190 31,147
Shares used in computing diluted earnings per share 34,138 33,271
34,151 32,949
PERFICIENT, INC.
CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)
June 30, December 31, 2015 2014
ASSETS Current assets: Cash and cash equivalents $ 6,839 $
10,935 Accounts receivable, net 96,734 113,928 Prepaid expenses
3,519 2,476 Other current assets 7,028 4,679
Total current assets 114,120 132,018 Property and equipment,
net 8,619 7,966 Goodwill 255,189 236,130 Intangible assets, net
51,968 46,105 Other non-current assets 4,017
3,823 Total assets $ 433,913 $ 426,042
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 11,160 $ 22,035 Other current liabilities
26,851 33,028 Total current liabilities 38,011
55,063 Long-term debt 60,000 54,000 Other non-current liabilities
10,419 12,251 Total liabilities 108,430
121,314 Stockholders' equity: Common stock 44 43 Additional
paid-in capital 353,759 334,645 Accumulated other comprehensive
loss (803 ) (651 ) Treasury stock (101,624 ) (95,353 ) Retained
earnings 74,107 66,044 Total
stockholders' equity 325,483 304,728
Total liabilities and stockholders' equity $ 433,913 $
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 June
30, Six Months Ended June 30, 2015 2014
2015 2014 GAAP Net Income $ 3,997 $ 6,387 $ 8,063 $
9,433 Additions: Provision for income taxes 938 4,653 3,089 6,881
Amortization 3,411 3,730 7,212 6,466 Acquisition costs 21 1,076 21
2,569 Adjustment to fair value of contingent consideration 89
(1,677 ) 174 (1,463 ) Stock compensation 3,347 3,420
6,854 6,615 Adjusted Net Income Before
Tax 11,803 17,589 25,413 30,501 Adjusted income tax (1)
3,423 6,782 8,234 11,651
Adjusted Net Income $ 8,380 $ 10,807 $ 17,179 $ 18,850
GAAP Earnings Per Share (diluted) $ 0.12 $ 0.19 $
0.24 $ 0.29 Adjusted Earnings Per Share (diluted) $ 0.25 $ 0.33 $
0.50 $ 0.57 Shares used in computing GAAP and Adjusted Earnings Per
Share (diluted) 34,138 33,271 34,151 32,949 (1) The
estimated adjusted effective tax rate of 29.0% and 38.5% for the
three months ended June 30, 2015 and 2014, respectively, and 32.4%
and 38.2% for the six months ended June 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 June 30, Six Months Ended June 30, 2015
2014 2015 2014 GAAP Net Income $ 3,997
$ 6,387
$ 8,063
$ 9,433 Additions: Provision for income taxes 938 4,653 3,089 6,881
Net interest expense 548 425 1,101
593
Net other (income) expense (9 ) (49 ) 271 (69 ) Depreciation 1,093
870 2,174 1,781 Amortization 3,411 3,730 7,212 6,466 Acquisition
costs 21
1,076
21
2,569 Adjustment to fair value of contingent consideration 89
(1,677 )
174
(1,463 ) Stock compensation 3,347
3,420
6,854
6,615 EBITDAS (1) $ 13,435
$ 18,835
$ 28,959
$ 32,806 (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/20150730005762/en/
Perficient, Inc.Bill Davis,
314-529-3555bill.davis@perficient.com
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