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 March 31, 2015.
Financial Highlights
For the quarter ended March 31, 2015:
-
Revenue increased 14% to $110.6 million from $97.2 million for the
first quarter of 2014;
-
Services revenue increased 11% to $98.6 million from $88.5 million for
the first quarter of 2014;
-
Gross Margin increased 15% to $36.1 million from $31.5 million for the
first 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 increased to $0.26 from $0.25 for the first quarter of
2014;
-
Earnings per share results on a fully diluted basis increased to $0.12
from $0.09 for the first quarter of 2014;
-
EBITDAS (a non-GAAP measure; see attached schedule, which
reconciles to GAAP net income) increased to $15.5 million from $14.0
million for the first quarter of 2014;
-
Net income increased to $4.1 million from $3.0 million for the first
quarter of 2014; and
-
Perficient repurchased 187,000 shares of its common stock at a total
cost of $3.7 million.
“Perficient’s digital experience, business optimization and industry
solutions are resonating well in the market as evidenced by a growing
pipeline of opportunities and strong bookings trends in recent months,”
said Jeff Davis, chief executive officer and president. “We’re
well-positioned for another year of solid top- and bottom-line growth.”
“Higher than anticipated benefit costs negatively impacted margins
during the quarter,” said Paul Martin, chief financial officer. “We
anticipate margin improvement in the current quarter and second half of
the year.”
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;
-
Earned the Platinum Implementation Partner designation from Sitecore
due to our advanced implementation capability and our demonstrated
leadership in customer experience management with Sitecore clients;
-
Received the prestigious IBM Beacon Award for Outstanding Information
Management Solution, awarded to elite IBM Business Partners who
deliver exceptional solutions that drive business value and transform
the way clients and industries do business;
-
Received two accolades from Magento – the Spirit of Excellence Award
for North America, recognizing exemplary service to Magento clients,
and the Best B2B User Experience Award, for best-in-class innovation
and brilliance in creating e-commerce solutions; and
-
Added new customer relationships and follow-on projects with leading
companies such as Blue Cross Blue Shield of Massachusetts, Bon-Ton,
Carhatt, Cigna, Citizens Financial Group, Cole-Parmer, C&S Wholesale
Grocers, Depository Trust and Clearing Corp., Fidelis, Health Data
Compass, Laclede Gas, MoneyGram International, NRG Energy,
Presbyterian Health Care Services, Scottrade, Sears Canada, Transpace,
U.S. Concrete, the University of Houston, and Zoetis.
Business Outlook
Perficient expects its second quarter 2015 services and software
revenue, including reimbursed expenses, to be in the range of $110.5
million to $120.9 million, comprised of $104.5 million to $109.9 million
of revenue from services including reimbursed expenses and $6.0 million
to $11.0 million of revenue from sales of software. The midpoint of
second quarter 2015 services revenue guidance represents growth of 21%
over second quarter 2014 services revenue.
The company is narrowing its full year 2015 revenue guidance range of
$470 million to $495 million and reaffirming its 2015 adjusted earnings
per share guidance range of $1.38 to $1.49.
Conference Call Details
Perficient will host a conference call regarding first quarter 2015
financial results today at 10 a.m. Eastern.
|
WHAT: Perficient Reports First Quarter 2015 Results
|
WHEN: Thursday, May 7, 2015, at 10 a.m. Eastern
|
CONFERENCE CALL NUMBERS: 877-415-3178 (U.S. and Canada);
857-244-7321 (International)
|
PARTICIPANT PASSCODE: 93252544
|
REPLAY TIMES: Thursday, May 7, 2015, at 2 p.m. Eastern,
through Thursday, May 14, 2015
|
REPLAY NUMBER: 888-286-8010 (U.S. and Canada) 617-801-6888
(International)
|
REPLAY PASSCODE: 54878916
|
|
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 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, 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 recent implementation of our new Employee Resource Planning
system;
|
(4) legal liabilities, including intellectual property protection
and infringement or the disclosure of 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,
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
Services
|
|
$
|
98,629
|
|
|
$
|
88,489
|
|
Software and hardware
|
|
|
8,502
|
|
|
|
5,003
|
|
Reimbursable expenses
|
|
|
3,467
|
|
|
|
3,678
|
|
Total revenues
|
|
|
110,598
|
|
|
|
97,170
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
Project personnel costs
|
|
|
62,248
|
|
|
|
55,663
|
|
Software and hardware costs
|
|
|
6,728
|
|
|
|
4,502
|
|
Reimbursable expenses
|
|
|
3,467
|
|
|
|
3,678
|
|
Other project related expenses
|
|
|
896
|
|
|
|
786
|
|
Stock compensation
|
|
|
1,199
|
|
|
|
1,082
|
|
Total cost of revenues
|
|
|
74,538
|
|
|
|
65,711
|
|
|
|
|
|
|
Gross margin
|
|
|
36,060
|
|
|
|
31,459
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
21,735
|
|
|
|
18,568
|
|
Stock compensation
|
|
|
2,308
|
|
|
|
2,115
|
|
|
|
|
12,017
|
|
|
|
10,776
|
|
|
|
|
|
|
Depreciation
|
|
|
1,081
|
|
|
|
912
|
|
Amortization
|
|
|
3,801
|
|
|
|
2,736
|
|
Acquisition costs
|
|
|
-
|
|
|
|
1,493
|
|
Adjustment to fair value of contingent consideration
|
|
|
85
|
|
|
|
214
|
|
Income from operations
|
|
|
7,050
|
|
|
|
5,421
|
|
|
|
|
|
|
Net interest expense
|
|
|
(553
|
)
|
|
|
(167
|
)
|
Net other (expense) income
|
|
|
(280
|
)
|
|
|
20
|
|
Income before income taxes
|
|
|
6,217
|
|
|
|
5,274
|
|
Provision for income taxes
|
|
|
2,151
|
|
|
|
2,229
|
|
Net income
|
|
$
|
4,066
|
|
|
$
|
3,045
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.12
|
|
|
$
|
0.10
|
|
Diluted earnings per share
|
|
$
|
0.12
|
|
|
$
|
0.09
|
|
|
|
|
|
|
Shares used in computing basic earnings per share
|
|
|
33,046
|
|
|
|
30,729
|
|
Shares used in computing diluted earnings per share
|
|
|
34,164
|
|
|
|
32,628
|
|
|
PERFICIENT, INC.
|
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,353
|
|
|
$
|
10,935
|
|
Accounts receivable, net
|
|
|
99,427
|
|
|
|
113,928
|
|
Prepaid expenses
|
|
|
3,910
|
|
|
|
2,476
|
|
Other current assets
|
|
|
5,105
|
|
|
|
4,679
|
|
Total current assets
|
|
|
114,795
|
|
|
|
132,018
|
|
Property and equipment, net
|
|
|
8,336
|
|
|
|
7,966
|
|
Goodwill
|
|
|
252,819
|
|
|
|
236,130
|
|
Intangible assets, net
|
|
|
55,333
|
|
|
|
46,105
|
|
Other non-current assets
|
|
|
4,251
|
|
|
|
3,823
|
|
Total assets
|
|
$
|
435,534
|
|
|
$
|
426,042
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
10,901
|
|
|
$
|
22,035
|
|
Other current liabilities
|
|
|
26,476
|
|
|
|
33,028
|
|
Total current liabilities
|
|
|
37,377
|
|
|
|
55,063
|
|
Long-term debt
|
|
|
67,500
|
|
|
|
54,000
|
|
Other non-current liabilities
|
|
|
10,375
|
|
|
|
12,251
|
|
Total liabilities
|
|
|
115,252
|
|
|
|
121,314
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
|
44
|
|
|
|
43
|
|
Additional paid-in capital
|
|
|
349,980
|
|
|
|
334,645
|
|
Accumulated other comprehensive loss
|
|
|
(822
|
)
|
|
|
(651
|
)
|
Treasury stock
|
|
|
(99,030
|
)
|
|
|
(95,353
|
)
|
Retained earnings
|
|
|
70,110
|
|
|
|
66,044
|
|
Total stockholders' equity
|
|
|
320,282
|
|
|
|
304,728
|
|
Total liabilities and stockholders' equity
|
|
$
|
435,534
|
|
|
$
|
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 March 31,
|
|
|
|
2015
|
|
|
2014
|
GAAP Net Income
|
|
$
|
4,066
|
|
$
|
3,045
|
Additions:
|
|
|
|
|
Provision for income taxes
|
|
|
2,151
|
|
|
2,229
|
Amortization
|
|
|
3,801
|
|
|
2,736
|
Acquisition costs
|
|
|
-
|
|
|
1,493
|
Adjustment to fair value of contingent consideration
|
|
|
85
|
|
|
214
|
Stock compensation
|
|
|
3,507
|
|
|
3,197
|
Adjusted Net Income Before Tax
|
|
|
13,610
|
|
|
12,914
|
Adjusted income tax (1)
|
|
|
4,832
|
|
|
4,869
|
Adjusted Net Income
|
|
$
|
8,778
|
|
$
|
8,045
|
|
|
|
|
|
GAAP Earnings Per Share (diluted)
|
|
$
|
0.12
|
|
$
|
0.09
|
Adjusted Earnings Per Share (diluted)
|
|
$
|
0.26
|
|
$
|
0.25
|
Shares used in computing GAAP and Adjusted Earnings Per Share
(diluted)
|
|
|
34,164
|
|
|
32,628
|
|
|
|
|
|
(1) The estimated adjusted effective tax rate of 35.5% and 37.7% for
the three months ended March 31, 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 March 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
GAAP Net Income
|
|
$
|
4,066
|
|
$
|
3,045
|
|
Additions:
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
2,151
|
|
|
2,229
|
|
Net interest expense
|
|
|
553
|
|
|
167
|
|
Net other expense (income)
|
|
|
280
|
|
|
(20
|
)
|
Depreciation
|
|
|
1,081
|
|
|
912
|
|
Amortization
|
|
|
3,801
|
|
|
2,736
|
|
Acquisition costs
|
|
|
-
|
|
|
1,493
|
|
Adjustment to fair value of contingent consideration
|
|
|
85
|
|
|
214
|
|
Stock compensation
|
|
|
3,507
|
|
|
3,197
|
|
EBITDAS (1)
|
|
$
|
15,524
|
|
$
|
13,973
|
|
|
|
|
|
|
|
|
(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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