Forrester Research, Inc. · NASDAQ:FORR
Forrester Research — Investor Presentation (March 2009)
31 slides from Forrester Research's investor presentation, Mar 25, 2009
Slide 1: Forrester Research, Inc.
Forrester Research, Inc. Charles Rutstein COO Michael Doyle CFO
Slide 2: Safe Harbor
Safe Harbor This presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. These projections or statements are only predictions. Actual events or results may differ materially from those in the projections or
Slide 3: Forrester summary
Forrester summary Independent technology research company Founded in 1983, IPO 1996; secondary in 2000 23.6 million shares outstanding 1,048 employees in 26 global locations as of 12/31/08 Strong balance sheet $260 million in cash & securities as of 12/31/08 No debt 2,643 client companies, including
Slide 4: Agenda
Agenda Investment highlights Products Growth and operational imperatives Acquisitions Financials
Slide 5: Investment Highlights
Investment Highlights Attractive business model Recurring revenue model Demonstrated track record of accelerating revenue growth, expanding margins Healthy cash flow Strong balance sheet with $11/share in cash Consolidating market Large, global, market opportunity: 25,000 companies Primarily organic
Slide 6: Agenda
Agenda Investment highlights Products Growth and operational imperatives Acquisitions Financials
Slide 7: Forrester goes to market by...roles
Forrester goes to market by...roles
Slide 8: The advantages of roles
The advantages of roles Higher relevancy Differentiation from competitors Deeper client relationships Resulting in: Stronger renewal rates Higher new business win rates
Slide 9: Proprietary sources and Products
Proprietary sources Products Products 4,500 vendor briefings per year 16,800 client inquiries per year 275,000 consumer surveys 14,000 large company surveys Research Boards Data Consulting Events
Slide 10: Research services: 64% of 2008 revenues
Research services: 64% of 2008 revenues Research: 40% of total revenue Boards: 19% of total revenue Data: 5% of total revenue
Slide 11: Research
Research $29,000 per RoleView member seat 22,000 reports Daily conference calls Attend a Forrester event Unlimited analyst inquiry
Slide 12: Boards
Boards Launched in 2002 $36,000 per Forrester Leadership Board seat 15 boards 1,552 members at the end of Q4, 2008
Slide 13: Data
Data Surveying 70% of the world's GDP Second longest-running proprietary survey in the U.S.
Slide 14: Advisory Services & Other: 36% of 2008 Revenues
Advisory Services & Other: 36% of 2008 Revenues Consulting: 31% of total revenue Events: 5% of total revenue
Slide 15: Consulting
Consulting 50% are one- and two-day projects 50% are large, multi-week projects A "nobody on the beach" model
Slide 16: Events
Events $1,995 per seat 300 to 1,500 attendees per event 14 events worldwide in 2009
Slide 17: Agenda
Agenda Investment highlights Products Growth and operational imperatives Acquisitions Financials
Slide 18: Forrester's addressable market
Forrester's addressable market 4 million executives $9 billion To date, we are less than 5% penetrated.
Slide 19: Three operational imperatives
Three operational imperatives Completing the build-out of role-based ("R") Growing our sales platform Increasing the quotient of syndicated business ("Q").
Slide 20: Agenda
Agenda Investment highlights Products Growth and operational imperatives Acquisitions Financials
Slide 21: Acquisitions
Acquisitions 4 acquisitions prior to 2008 - 3 very successful Largest was Giga in 2003 for $60 million Acquired Jupiter Research 7/31/08 for $23mm Look to fill a geographical, role, or product gap Economic downturn could create interesting buying opportunities Note: we are highly selective...
Slide 22: Agenda
Agenda Investment highlights Products Growth and operational imperatives Acquisitions Financials
Slide 23: Financial Review
Financial Review 2008 continued positive financial trends of the past 6 years - -- Accelerating revenue growth, expanding margins 2009 will be challenging as a result of the significant global economic downturn: We expect 2009 performance to deviate from our historical performance levels We have tak
Slide 24: Revenue
Revenue 17% '05 to '08 CAGR 14% '02 to '08 CAGR $96.9 $126.0 $138.5 $151.4 $181.5 $212.1 $240.9 $- $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 $175.0 $200.0 $225.0 $250.0 2002 2003 2004 2005 2006 2007 2008
Slide 25: Proforma Operating Income and Margin
Proforma Operating Income and Margin '02 to '08 CAGR 33% '05 to '08 CAGR 31% 19.0% 17.4% Proforma Op Margin 16.5% 13.4% 12.2% 11.1% 11.4% $11.0 $14.0 $16.9 $20.2 $29.7 $36.8 $45.6 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 2002 2003 2004 2005 2006 2007 2008
Slide 26: Cash flows from operations
Cash flows from operations 2007 and 2008 includes investigation costs and restatement $5.6 $4.1 $18.0 $23.9 $45.8 $38.1 $43.6 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 2002 2003 2004 2005 2006 2007 * 2008 *
Slide 27: FY 2008 Pro Forma Income Statement
FY 2008 Pro Forma Income Statement FY 2007 Actual FY 2008 Actual Growth Revenue 212.1 $ 240.9 $ 14% Expense 175.3 $ 195.2 $ 11% Operating income 36.8 $ 45.6 $ 24% Operating margin 17.4% 18.9% 9% Net income 27.6 $ 31.1 $ 13% WASO 23.7 23.6 - -1% EPS 1.16 $ 1.32 $ 14%
Slide 28: Select balance sheet items
Select balance sheet items (in millions) 12/31/06 12/31/07 Cash and securities: $207.8 $249.0 $260.0* Accounts receivable: $ 59.7 $ 69.9 $ 64.2 Total assets: $384.1 $426.4 $454.9 Stockholders' equity: $244.9 $275.0 $303.5 Deferred revenue: $ 99.9 $111.4 $113.8 12/31/08 *39.6 million carried as long
Slide 29: Key metrics
Key metrics 12/31/06 12/31/07 Agreement value: $172.8 $197.2 $222.5 Client company retention: 77% 75% 73% Dollar retention: 86% 85% 84% Client companies: 2,312 2,468 2,643 12/31/08 Roles Per Client: - - 3.1
Slide 30: 2009 Outlook
2009 Outlook Revenues of $215-$235 Million Pro-Forma Operating Margin of 15 to 17 percent Pro-Forma Earnings per Share of $0.88 to $1.11 Operating cash flow between $20 to $30 million
Slide 31: Summary
Summary The global economic downturn will present short term challenges and interesting opportunities for Forrester in 2009 but... Clear long term growth path and strategy Attractive business model Roles enhance the model Business execution against role-based strategy continues to improve
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