Press Release Source: Perficient, Inc.
Perficient Reports First Quarter 2007 Results
Thursday May 10, 8:02 am ET
Company Reports Record Quarterly Revenues, Realizes Higher Gross and EBITDA
Margins and Exceeds Consensus Analysts' Earnings Forecast
AUSTIN, Texas--(BUSINESS WIRE)--Perficient, Inc. (NASDAQ: PRFT - News) a leading
information technology consulting firm serving Global 2000 and other large
enterprise customers throughout the United States, today reported financial
results for the quarter ended March 31, 2007.
Financial Highlights
For the first quarter ended March 31, 2007:
o Revenues increased 69% to $50.0 million compared to $29.6 million during
the first quarter of 2006;
o Services revenues, including reimbursed expenses, increased 69% to $43.3
million compared to $25.6 million during the first quarter of 2006;
o Earnings per share on a fully diluted basis were up 57% to $0.11 compared
to $0.07 per share during the first quarter of 2006;
o Non-GAAP earnings per share (formerly called cash earnings per share or
Cash EPS as defined in the schedule that reconciles to GAAP EPS which
accompanies this release) on a fully diluted basis were up 60% to $0.16
compared to $0.10 per share during the first quarter of 2006;
o Net income was up 88% to $3.2 million compared to $1.7 million during the
first quarter of 2006;
o Non-GAAP net income was up 92% to $4.8 million compared to $2.5 million
during the first quarter of 2006;
o EBITDA (a non GAAP measure, see attached schedule which reconciles to GAAP
net income and net cash flows from operating activities) was up 84% to
$6.8 million compared to $3.7 million during the first quarter of 2006.
EBITDA included GAAP non-cash stock compensation expense of approximately
$1.6 million and $0.7 million in the first quarter of 2007 and 2006,
respectively;
o Gross margin for services revenue was 37.8% compared to 34.7% in the first
quarter of 2006. Gross profit for services revenue included GAAP non-cash
stock compensation expense of approximately $365,000 and $232,000 in the
first quarter of 2007 and 2006, respectively. Gross margin for services
revenue excluding stock compensation expense was 38.6% compared to 35.6%
in the first quarter of 2006; and
o Gross margin for software revenue was 16.8% compared to 14.7% in the first
quarter of 2006.
"The first quarter was another record for Perficient, with 69% year-over-year
growth in services revenue and record profitability," said Jack McDonald,
Perficient's chairman and chief executive. "We expanded our geographic footprint
with the acquisition of E-Tech Solutions, and enter the second quarter at an
annualized revenue run-rate of more than $200 million. Our acquisition pipeline
has never been stronger and we continue to execute aggressively against our
growth goals. Moreover, we are beginning to see the benefits of operating
leverage and scale on our bottom line, which should positively impact
profitability in the second quarter."
"We continue to execute strongly against key operating metrics," said Jeffrey
Davis, Perficient's president and chief operating officer. "Rising average bill
rates, coupled with utilization that remained strong helped increase EBITDA
margins excluding stock compensation from 14.8% to 16.6% year over year. Strong
cash flow, coupled with increased diligence around DSO collections, left us with
just $2.9 million of debt, even after accounting for the acquisition of E-Tech
Solutions and the payment of year-end bonuses. We're well-positioned for another
year of strong growth from our existing business in 2007."
Other First Quarter Highlights:
Among other achievements in the first quarter, Perficient:
o Completed the acquisition of E-Tech Solutions, a transaction that added a
significant presence in the northeastern United States;
o Added new customer relationships and follow-on projects with leading
companies and government agencies including: Affinia, AG Edwards, Berry
Plastics, Centene, Classified Ventures, Cord Blood Registry, Erie
Insurance, Fiskars Brands, Highmark, Johnson Controls, Luxxotica, NetJets,
Royal Carribean, The Capital Group, Johnson Controls and many others;
o Posted its 15th consecutive quarter of positive net income and earnings
per share;
o Completed and filed our Form 10-K annual report on March 5th, 2007, which
included the Company's and its external audit firm's unqualified opinion
on internal controls, eliminating the 'material weakness' opinion included
in our 2005 Form 10-K annual report filing; and
o Was named a "Hidden Gem" in the March 1st, 2007 edition of the Wall Street
Journal.
Business Outlook
The following statements are based on current expectations. These statements are
forward-looking and actual results may differ materially.
The company expects its second quarter 2007 services and software revenue,
including reimbursed expenses, to be in the range of $48.5 million to $51.2
million, comprised of $46.9 million to $49.3 million of revenue from services
including reimbursed expenses and $1.6 million to $1.9 million of revenue from
sales of software. The guidance range of services revenue including reimbursed
expenses would represent services revenue growth of 34.9% to 41.3% over the
second quarter of 2006.
Conference Call Details
Perficient will host a conference call regarding first quarter 2007 financial
results today at 9:00 a.m. Eastern.
WHAT: Perficient First Quarter 2007 Results
WHEN: Thursday, May 10, 2007, at 9:00 a.m.
Eastern.
CONFERENCE CALL NUMBERS: 800.638.5439 (domestic)
617.614.2706 (international)
PARTICIPANT PASSCODE: 45126123
REPLAY TIMES: Thursday, May 10, 2006, at 11:00 a.m.
Eastern, through Thursday, May 17, 2006
REPLAY NUMBER: 888.286.8010 (domestic)
617.801.6888 (international)
REPLAY PASSCODE: 98822398
About Perficient
Perficient is a leading information technology consulting firm serving Global
2000 and other large enterprise customers throughout the United States.
Perficient helps clients gain competitive advantage by using Internet-based
technologies to make their businesses more responsive to market opportunities
and threats, strengthen relationships with customers, suppliers and partners,
improve productivity and reduce information technology costs. Perficient is a
member of the Russell 2000(R) index and is traded on the Nasdaq Global Select
Market(SM), a market for public companies that meet the highest listing
standards in the world. Perficient is an award-winning "Premier Level" IBM
business partner, a TeamTIBCO partner, a Microsoft Gold Certified Partner, a
Documentum Select Services Team Partner and an Oracle-Siebel partner. For more
information about Perficient, which employs more than 1,100 professionals,
please visit www.perficient.com.
Safe Harbor Statement
This news release contains forward-looking statements that are subject to risk
and uncertainties. These forward-looking statements are based on management's
current expectations and are subject to certain risks and uncertainties that
could cause actual results to differ materially from management's current
expectations and the forward-looking statements made in this press release.
These risks and uncertainties include, but not limited to, the impact of
competitive services, demand for services like those provided by the company and
market acceptance risks, fluctuations in operating results, cyclical market
pressures on the technology industry, the ability to manage strains associated
with the company's growth, credit risks associated with the company's accounts
receivable, the company's ability to continue to attract and retain high quality
employees, accurately set fees for and timely complete its current and future
client projects, the company's ability to identify, compete for and complete
strategic acquisition and partnership opportunities, and other risks detailed
from time to time in the company's filings with Securities and Exchange
Commission, including the most recent Form 10-K and Form 10-Q.
About Non-GAAP Financial Information
This press 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 information)
Three Months Ended March 31,
----------------------------
2007 2006
-------- --------
Revenue
Services $ 43,297 $ 25,606
Software 4,192 2,682
Reimbursable expenses 2,560 1,356
-------- --------
Total revenue 50,049 29,644
Cost of revenue
Project personnel costs 26,266 16,265
Software costs 3,486 2,288
Reimbursable expenses 2,560 1,356
Other project related
expenses 685 447
-------- --------
Total cost of revenue 32,997 20,356
-------- --------
Gross margin 17,052 9,288
Selling, general and
administrative 9,085 5,146
Stock compensation 1,214 492
-------- --------
6,753 3,650
Depreciation 337 168
Amortization of intangibles 846 425
-------- --------
Income from operations 5,570 3,057
Interest income 49 2
Interest expense (50) (84)
Other 6 59
-------- --------
Income before income taxes 5,575 3,034
Provision for income taxes 2,415 1,329
-------- --------
Net income $ 3,160 $ 1,705
======== ========
Basic net income per share $ 0.12 $ 0.07
======== ========
Diluted net income per
share $ 0.11 $ 0.07
======== ========
Shares used in computing
basic
net income per share 27,081 23,538
======== ========
Shares used in computing
diluted
net income per share 29,449 26,183
======== ========
PERFICIENT, INC
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
March 31, December 31,
2007 2006
--------- ---------
ASSETS
Current assets:
Cash $ 996 $ 4,549
Accounts receivable, net 40,930 38,600
Prepaid expenses 681 1,171
Other current assets 2,071 2,799
--------- ---------
Total current assets 44,678 47,119
Net property and equipment 2,006 1,806
Net Goodwill 77,748 69,170
Net intangible assets 14,620 11,886
Other noncurrent assets 1,017 1,019
--------- ---------
Total assets $ 140,069 $ 131,000
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,234 $ 5,025
Current portion of long term debt 989 1,201
Other current liabilities 11,078 16,034
--------- ---------
Total current liabilities 15,301 22,260
Long term debt, net of current portion 1,900 137
Long term deferred taxes 2,093 1,251
--------- ---------
Total liabilities 19,294 23,648
Stockholders' equity:
Common stock 27 27
Additional paid-in capital 157,297 147,028
Accumulated other comprehensive loss (131) (125)
Accumulated deficit (36,418) (39,578)
--------- ---------
Total stockholders' equity 120,775 107,352
--------- ---------
Total liabilities and stockholders'
equity $ 140,069 $ 131,000
========= =========
About Non-GAAP Financial Measures
Perficient, Inc. ("Perficient") provides non-GAAP measures for EBITDA, net
income and net income 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 exclude non-operating
charges. Perficient's management excludes these non-operating charges when it
internally evaluates the performance of Perficient's business and makes
operating decisions, including internal budgeting, performance measurement and
the calculation of bonuses and discretionary compensation, because these
measures provide a consistent method of comparison to historical periods.
Moreover, management believes these non-GAAP measures reflect the essential
operating activities of Perficient. Accordingly, management excludes stock-based
compensation related to employee stock options and restricted stock awards, the
amortization of purchased intangible assets, and income tax effects of the
foregoing, when making operational decisions.
Perficient believes that providing the non-GAAP measures that management uses to
its investors is useful to investors for a number of reasons. The non-GAAP
measures provide a consistent basis for investors to understand Perficient's
financial performance in comparison to historical periods. In addition, it
allows investors to evaluate Perficient's performance using the same methodology
and information as that used by Perficient's management.
Non-GAAP 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 judgment of 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
non-GAAP EBITDA, non-GAAP net income and non-GAAP net income per share. In
addition, some items that are excluded from non-GAAP net income and non-GAAP
earnings per share can have a material impact on cash flows and stock
compensation charges can have a significant impact on earnings. 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 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 measures used by other companies and/or analysts.
The non-GAAP adjustments, and the basis for excluding them, are outlined below:
Stock-based Compensation
Perficient incurs stock-based compensation expense under SFAS 123R. Perficient
excludes this item for the purposes of calculating non-GAAP EBITDA, non-GAAP net
income and non-GAAP net income per share because it is a non-cash expense that
Perficient believes is not reflective of its business performance. The nature of
the 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 expenses 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 (including prior periods following the
adoption of SFAS 123R). The exclusion of stock-based compensation from the
non-GAAP measures also allows a consistent comparison of Perficient's relative
historical financial performance, since the method for accounting for
stock-based compensation changed at the beginning of fiscal 2006 when Perficient
adopted SFAS 123R. Finally, Perficient believes that non-GAAP measures of
profitability that exclude stock-based compensation are widely used by analysts
and investors.
Amortization of Intangible Assets
Perficient has incurred amortization of intangible assets, included in its GAAP
financial statements, related to various acquisitions Perficient has made.
Management excludes these items, for the purposes of calculating non-GAAP
EBITDA, non-GAAP net income and non-GAAP net income per share. Perficient
believes that eliminating this expense from its non-GAAP 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.
PERFICIENT, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(unaudited)
(in thousands, except net income per share)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
-------- --------
GAAP Net Income $ 3,160 $ 1,705
Additions:
Income tax provision 2,415 1,329
Amortization of intangible assets 846 425
Stock-based compensation 1,580 724
-------- --------
Non-GAAP Adjusted Net Income Before Tax 8,001 4,183
Income tax for non-GAAP items (1) (3,248) (1,641)
-------- --------
Non-GAAP Net Income $ 4,753 $ 2,542
======== ========
GAAP Net Income Per Share (diluted) $ 0.11 $ 0.07
Non-GAAP Net Income Per Share (diluted) $ 0.16 $ 0.10
Shares used in computing net income per
share (diluted) 29,449 26,183
(1) The estimated non-GAAP effective tax rate was 40.6% and 39.2% for the
three months ended March 31, 2007 and 2006, respectively, and 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, except net income per share)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2006
------- -------
GAAP Net Income $ 3,160 $ 1,705
Additions:
Provision for income taxes 2,415 1,329
Other (6) (59)
Interest expense, net of income 1 82
Amortization of intangible assets 846 425
Depreciation 337 168
------- -------
EBITDA (1) $ 6,753 $ 3,650
======= =======
EBITDA (1) $ 6,753 $ 3,650
Provision for income taxes (2,415) (1,329)
Other 6 59
Interest expense, net of income (1) (82)
Stock-based compensation 1,580 724
Non-cash interest expense -- 5
Changes in operating assets &
liabilities (7,657) (3,734)
------- -------
Net cash flows used in operating
activities $(1,734) $ (707)
======= =======
(1) EBITDA 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. EBITDA
measures presented may not be comparable to similarly titled measures
presented by other companies.
Contact:
Perficient, Inc.
Bill Davis, 314-995-8822
bill.davis@perficient.com