Perficient Reports Third Quarter 2012 Results

  Perficient Reports Third Quarter 2012 Results

     Revenues Increase 25%, Company Delivers Record Revenues and Earnings

Business Wire

ST. LOUIS -- November 01, 2012

Perficient, Inc. (NASDAQ: PRFT) (“Perficient”), a leading information
technology consulting firm serving Global 2000 and other large enterprise
customers throughout North America, today reported its financial results for
the quarter ended September 30, 2012.

Financial Highlights

For the quarter ended September 30, 2012:

  *Revenues increased 25% to $87.5 million from $70.2 million for the third
    quarter 2011;
  *Services revenue increased 22% to $76.0 million from $62.5 million for the
    third quarter 2011;
  *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 $0.22 for the third quarter 2011;
  *Earnings per share results on a fully diluted basis increased to $0.16
    from $0.12 for the third quarter 2011;
  *EBITDAS ^ (a non-GAAP measure; see attached schedule, which reconciles to
    GAAP net income) increased 19% to $13.1 million from $11.0 million for the
    third quarter 2011; and
  *Net income increased 48% to $5.1 million compared to $3.5 million for the
    second quarter 2011.

“Perficient’s business in the third quarter exhibited continued strength and
resiliency,” said Jeffrey Davis, Perficient’s chief executive officer and
president. “Average billing rates at record highs contributed to improved
margins and earnings while an exceptionally strong software quarter
contributed to record revenues. Heading into 2013, we remain well-positioned
to continue to gain market share and deliver growth and outperformance.”

Other Highlights

Among other recent achievements, Perficient:

  *Added new customer relationships and follow-up projects with leading
    companies including: Adesa, Ameritas Holding Company, Best Buy, Capital
    Group, DTE Energy, Green Dot, Roche Diagnostics, Texas Health Resources,
    Union Bank, YUM Restaurant Services Group, and many others;
  *Was ranked in the top 10 of the 2013 Vault Top IT Consulting list, marking
    the third consecutive year Perficient has ranked as a leader among top
    information technology and management consulting firms; and
  *Was recognized with IBM’s 2012 Information Management Integration
    Excellence Award and 2012 Business Analytics Partner Achievement Award for
    its work with Premier healthcare alliance and IBM in developing and
    delivering PremierConnect, a technology platform that houses the largest
    virtual healthcare community in the country.

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 fourth quarter 2012 services and software revenue,
including reimbursed expenses, to be in the range of $81.0 million to $85.0
million, comprised of $75.7 million to $79.3 million of revenue from services
including reimbursed expenses and $5.3 million to $5.7 million of revenue from
sales of software. The midpoint of fourth quarter 2012 services revenue
guidance represents growth of 18% over fourth quarter 2011 services revenue.

The Company is narrowing its full year 2012 revenue guidance to a range of
$325 million to $329 million from the previously provided range of $317
million to $332 million.

The Company is narrowing its full year Adjusted GAAP earnings per share
guidance to a range of $0.91 to $0.95 from the previously provided range of
$0.90 to $0.96.

Conference Call Details

Perficient will host a conference call regarding third quarter 2012 financial
results today at 10 a.m. Eastern.


WHAT: Perficient Third Quarter 2012 Results
WHEN: Thursday, Nov. 1, 2012, at 10 a.m. Eastern
CONFERENCE CALL NUMBERS: 800-706-7749 (U.S. and Canada) 617-614-3474
(International)
PARTICIPANT PASSCODE: 32837535
REPLAY TIMES: Thursday, Nov. 1, 2012, at 12 p.m. Eastern, through Thursday,
Nov. 8, 2012
REPLAY NUMBER: 888-286-8010 (U.S. and Canada) 617-801-6888 (International)
REPLAY PASSCODE: 59934417


About Perficient

Perficient is a leading information technology consulting firm serving Global
2000 and enterprise customers throughout North America. Perficient’s
professionals serve clients from a network of offices across North America and
three offshore locations, in Eastern Europe, India, and China. Perficient
helps clients use Internet-based technologies to improve productivity and
competitiveness, strengthen relationships with customers, suppliers and
partners, and reduce information technology costs. Perficient, traded on the
Nasdaq Global Select Market(SM), 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 TeamTIBCO partner, a Microsoft National Systems Integrator
and Gold Certified Partner, an EMC Select Services Team Partner, and an Oracle
Platinum Partner. For more information, please 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 2012. 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
are disclosed under the heading “Risk Factors” in our annual report on Form
10-K for the year ended December 31, 2011 and our quarterly reports on Form
10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30,
2012. 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 and Section 21E
of the Securities Exchange Act of 1934. 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.

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 data)
                                                          
                    Three Months Ended             Nine Months Ended September
                    September 30,                  30,
                    2012            2011           2012            2011
                                                                   
Revenues
Services            $  75,948       $ 62,486       $ 214,793       $ 171,911
Software and           7,450          3,868          17,122          10,618
hardware
Reimbursable          4,076        3,820        12,053        9,477   
expenses
Total revenues        87,474       70,174       243,968       192,006 
                                                                   
Cost of
revenues
Project                47,190         38,715         134,872         107,365
personnel costs
Software and           6,301          3,425          14,554          9,223
hardware costs
Reimbursable           4,076          3,820          12,053          9,477
expenses
Other project
related                1,027          1,320          2,988           4,454
expenses
Stock                 653          577          1,870         1,659   
compensation
Total cost of         59,247       47,857       166,337       132,178 
revenues
                                                                   
Gross margin           28,227         22,317         77,631          59,828
                                                                   
Selling,
general and            15,811         11,938         43,895          33,141
administrative
Stock                 1,903        1,859        5,170         5,142   
compensation
                       10,513         8,520          28,566          21,545
                                                                   
Depreciation           612            484            1,590           1,207
Amortization           2,258          1,984          5,664           4,663
Acquisition            9              1              1,831           1,231
costs
Adjustment to
fair value of         97           334          435           852     
contingent
consideration
Income from           7,537        5,717        19,046        13,592  
operations
                                                                   
Net interest
(expense)              (93    )       (1     )       (131    )       67
income
Net other
income                5            13           49            (6      )
(expense)
Income before          7,449          5,729          18,964          13,653
income taxes
Provision for         2,307        2,263        7,233         5,627   
income taxes
Net income          $  5,142       $ 3,466       $ 11,731       $ 8,026   
                                                                   
Basic net
income per          $  0.17         $ 0.12         $ 0.40          $ 0.29
share
Diluted net
income per          $  0.16         $ 0.12         $ 0.38          $ 0.28
share
                                                                   
Shares used in
computing basic        30,021         27,744         29,273          27,679
net income per
share
Shares used in
computing
diluted net            31,674         29,518         30,844          29,054
income per
share

                                                           
PERFICIENT, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
                                                                 
                                               September 30,     December 31,
                                               2012              2011
ASSETS
Current assets:
    Cash and cash equivalents                  $  3,481          $  9,732
    Accounts receivable, net                      78,091            60,892
    Prepaid expenses                              1,564             1,246
    Other current assets                         3,097           3,118   
Total current assets                              86,233            74,988
Property and equipment, net                       4,526             3,490
Goodwill                                          160,199           132,038
Intangible assets, net                            19,408            10,128
Other non-current assets                         3,600           3,288   
Total assets                                   $  273,966       $  223,932 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                           $  7,538          $  5,029
    Other current liabilities                    20,678          18,483  
Total current liabilities                         28,216            23,512
    Long-term debt                                11,500            -
    Other non-current liabilities                1,359           1,461   
Total liabilities                                 41,075            24,973
                                                                 
Stockholders' equity:
    Common stock                                  38                36
    Additional paid-in capital                    272,232           248,855
    Accumulated other comprehensive loss          (270     )        (279    )
    Treasury stock                                (56,182  )        (54,995 )
    Retained earnings                            17,073          5,342   
Total stockholders' equity                       232,891         198,959 
Total liabilities and stockholders' equity     $  273,966       $  223,932 

About Non-GAAP Financial Measures

Perficient provides non-GAAP measures for EBITDAS (earnings before interest,
income taxes, depreciation, amortization, and stock compensation), adjusted
net income, and adjusted 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 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 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 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 net income
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 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:

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 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.

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 net income
per share. Perficient believes that excluding these expenses from its non-GAAP
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 net income per share. Perficient believes that excluding these
adjustments from its non-GAAP 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 net income 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 September    Nine Months Ended
                         30,                             September 30,
                         2012             2011           2012         2011
GAAP Net Income          $  5,142         $  3,466       $ 11,731     $ 8,026
Additions:
Provision for               2,307            2,263         7,233        5,627
income taxes
Amortization                2,258            1,984         5,664        4,663
Acquisition                 9                1             1,831        1,231
costs
Adjustment to
fair value of               97               334           435          852
contingent
consideration
Stock                      2,556           2,436        7,040       6,801
compensation
Adjusted Net
Income Before               12,369           10,484        33,934       27,200
Tax
Adjusted income            4,255           4,110        12,691      10,662
tax (1)
Adjusted Net             $  8,114         $  6,374       $ 21,243     $ 16,538
Income
                                                                      
GAAP Net Income
Per Share                $  0.16          $  0.12        $ 0.38       $ 0.28
(diluted)
Adjusted Net
Income Per               $  0.26          $  0.22        $ 0.69       $ 0.57
Share (diluted)
Shares used in
computing GAAP
and Adjusted                31,674           29,518        30,844       29,054
Net Income Per
Share (diluted)
                                                                      
(1) The estimated adjusted effective tax rate of 34.4% and 39.2% for the three
months ended September 30, 2012 and 2011, respectively, and 37.4% and 39.2%
for the nine months ended September 30, 2012 and 2011 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              Nine Months Ended
                     September 30,                   September 30,
                       2012         2011           2012           2011
GAAP Net             $  5,142         $ 3,466        $ 11,731       $ 8,026
Income
Additions:
Provision for           2,307           2,263          7,233          5,627
income taxes
Net interest
expense                 93              1              131            (67    )
(income)
Net other
(income)                (5      )       (13    )       (49    )       6
expense
Depreciation            612             484            1,590          1,207
Amortization            2,258           1,984          5,664          4,663
Acquisition             9               1              1,831          1,231
costs
Adjustment to
fair value of           97              334            435            852
contingent
consideration
Stock                  2,556         2,436        7,040        6,801  
compensation
EBITDAS (1)          $  13,069       $ 10,956      $ 35,606      $ 28,346 
                                                                    
(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.

Contact:

Perficient, Inc.
Bill Davis, 314-529-3555
bill.davis@perficient.com
 
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