Company Quick10K Filing
Forrester Research
Price45.93 EPS-0
Shares19 P/E-94
MCap855 P/FCF19
Net Debt65 EBIT-1
TEV920 TEV/EBIT-980
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-08
10-Q 2018-09-30 Filed 2018-11-06
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-09
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-09
10-K 2016-12-31 Filed 2017-03-10
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-03-11
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-03-11
10-Q 2014-09-30 Filed 2014-11-05
10-Q 2014-06-30 Filed 2014-08-06
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-03-13
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-07
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-18
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-03-09
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-14
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-05
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-12
8-K 2020-07-30 Earnings, Exhibits
8-K 2020-07-30 Earnings, Exhibits
8-K 2020-06-23
8-K 2020-05-12
8-K 2020-05-07
8-K 2020-04-02
8-K 2020-03-13
8-K 2020-02-13
8-K 2019-10-24
8-K 2019-07-31
8-K 2019-05-14
8-K 2019-04-30
8-K 2019-02-13
8-K 2019-01-03
8-K 2018-11-26
8-K 2018-10-23
8-K 2018-10-04
8-K 2018-07-24
8-K 2018-07-10
8-K 2018-05-08
8-K 2018-04-24
8-K 2018-02-06
8-K 2018-01-29

FORR 10Q Quarterly Report

Part I.
Item 1. Financial Statements
Note 1 - Interim Consolidated Financial Statements
Note 2 - Acquisitions
Note 3 - Goodwill and Other Intangible Assets
Note 4 - Debt
Note 5 - Leases
Note 6 - Contract Assets and Liabilities
Note 7 - Derivatives and Hedging
Note 8 - Fair Value Measurements
Note 9 - Income Taxes
Note 10 - Accumulated Other Comprehensive Loss
Note 11 - Net Income (Loss) per Common Share
Note 12 - Stockholders' Equity
Note 13 - Non - Marketable Investments
Note 14 - Operating Segments
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 forr-ex311_9.htm
EX-31.2 forr-ex312_8.htm
EX-32.1 forr-ex321_6.htm
EX-32.2 forr-ex322_7.htm

Forrester Research Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
64551638725812902012201420172020
Assets, Equity
130101724314-152012201420172020
Rev, G Profit, Net Income
15575-5-85-165-2452012201420172020
Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NUMBER: 000-21433

 

FORRESTER RESEARCH, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

04-2797789

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

60 Acorn Park Drive

Cambridge, Massachusetts

 

02140

(Zip Code)

(Address of principal executive offices)

 

 

 

(617613-6000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

 

Trading Symbol(s)

 

Name of Each Exchange on Which Registered

Common Stock, $.01 Par Value

 

FORR

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

As of August 4, 2020, 18,893,000 shares of the registrant’s common stock were outstanding.

 

1


FORRESTER RESEARCH, INC.

INDEX TO FORM 10-Q

 

 

 

Page

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

3

 

Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019

3

 

Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019

4

 

Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020 and 2019

5

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019

6

 

Notes to Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

Item 3.

Defaults Upon Senior Securities

35

Item 4.

Mine Safety Disclosures

35

Item 5.

Other Information

36

Item 6.

Exhibits

36

 

 

 

SIGNATURES

37

 

 

 

 

 

2


 

PART I.

ITEM 1. FINANCIAL STATEMENTS

FORRESTER RESEARCH, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data, unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

68,377

 

 

$

67,904

 

Accounts receivable, net of allowance for expected credit losses of $931 and $628 as

   of June 30, 2020 and December 31, 2019, respectively

 

 

54,108

 

 

 

84,605

 

Deferred commissions

 

 

15,029

 

 

 

20,326

 

Prepaid expenses and other current assets

 

 

21,417

 

 

 

19,201

 

Total current assets

 

 

158,931

 

 

 

192,036

 

Property and equipment, net

 

 

29,019

 

 

 

29,937

 

Operating lease right-of-use assets

 

 

63,837

 

 

 

69,100

 

Goodwill

 

 

243,201

 

 

 

243,895

 

Intangible assets, net

 

 

87,994

 

 

 

97,363

 

Other assets

 

 

5,577

 

 

 

6,829

 

Total assets

 

$

588,559

 

 

$

639,160

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,201

 

 

$

505

 

Accrued expenses and other current liabilities

 

 

44,272

 

 

 

79,857

 

Current portion of long-term debt

 

 

10,938

 

 

 

9,375

 

Deferred revenue

 

 

170,777

 

 

 

179,194

 

Total current liabilities

 

 

227,188

 

 

 

268,931

 

Long-term debt, net of deferred financing fees

 

 

101,235

 

 

 

121,170

 

Non-current operating lease liabilities

 

 

63,490

 

 

 

67,062

 

Other non-current liabilities

 

 

23,237

 

 

 

23,909

 

Total liabilities

 

 

415,150

 

 

 

481,072

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Note 12):

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value

 

 

 

 

 

 

 

 

Authorized - 500 shares; issued and outstanding - none

 

 

 

 

 

 

Common stock, $0.01 par value

 

 

 

 

 

 

 

 

Authorized - 125,000 shares

 

 

 

 

 

 

 

 

Issued - 23,401 and 23,275 shares as of June 30, 2020 and December 31, 2019,

   respectively

 

 

 

 

 

 

 

 

Outstanding - 18,770 and 18,644 shares as of June 30, 2020 and

   December 31, 2019, respectively

 

 

234

 

 

 

233

 

Additional paid-in capital

 

 

222,778

 

 

 

216,454

 

Retained earnings

 

 

129,314

 

 

 

118,147

 

Treasury stock - 4,631 shares as of June 30, 2020 and December 31, 2019

 

 

(171,889

)

 

 

(171,889

)

Accumulated other comprehensive loss

 

 

(7,028

)

 

 

(4,857

)

Total stockholders’ equity

 

 

173,409

 

 

 

158,088

 

Total liabilities and stockholders’ equity

 

$

588,559

 

 

$

639,160

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

3


 

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research

 

$

73,621

 

 

$

76,279

 

 

$

146,417

 

 

$

144,888

 

Consulting

 

 

34,888

 

 

 

34,017

 

 

 

68,347

 

 

 

65,803

 

Events

 

 

5,032

 

 

 

17,887

 

 

 

5,122

 

 

 

18,141

 

Total revenues

 

 

113,541

 

 

 

128,183

 

 

 

219,886

 

 

 

228,832

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and fulfillment

 

 

43,964

 

 

 

56,571

 

 

 

87,317

 

 

 

101,681

 

Selling and marketing

 

 

39,117

 

 

 

44,017

 

 

 

79,390

 

 

 

86,050

 

General and administrative

 

 

11,456

 

 

 

13,221

 

 

 

23,461

 

 

 

26,411

 

Depreciation

 

 

2,448

 

 

 

2,166

 

 

 

4,854

 

 

 

4,189

 

Amortization of intangible assets

 

 

4,713

 

 

 

5,099

 

 

 

9,425

 

 

 

11,309

 

Acquisition and integration costs

 

 

612

 

 

 

2,487

 

 

 

3,487

 

 

 

5,454

 

Total operating expenses

 

 

102,310

 

 

 

123,561

 

 

 

207,934

 

 

 

235,094

 

Income (loss) from operations

 

 

11,231

 

 

 

4,622

 

 

 

11,952

 

 

 

(6,262

)

Interest expense

 

 

(1,307

)

 

 

(2,085

)

 

 

(2,845

)

 

 

(4,437

)

Other income (expense), net

 

 

(201

)

 

 

(86

)

 

 

109

 

 

 

(356

)

Gain (loss) on investments, net

 

 

2,352

 

 

 

(8

)

 

 

2,365

 

 

 

(44

)

Income (loss) before income taxes

 

 

12,075

 

 

 

2,443

 

 

 

11,581

 

 

 

(11,099

)

Income tax expense

 

 

238

 

 

 

888

 

 

 

257

 

 

 

662

 

Net income (loss)

 

$

11,837

 

 

$

1,555

 

 

$

11,324

 

 

$

(11,761

)

Basic income (loss) per common share

 

$

0.63

 

 

$

0.08

 

 

$

0.60

 

 

$

(0.64

)

Diluted income (loss) per common share

 

$

0.63

 

 

$

0.08

 

 

$

0.60

 

 

$

(0.64

)

Basic weighted average common shares outstanding

 

 

18,759

 

 

 

18,435

 

 

 

18,732

 

 

 

18,399

 

Diluted weighted average common shares outstanding

 

 

18,831

 

 

 

18,780

 

 

 

18,828

 

 

 

18,399

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

4


 

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

$

11,837

 

 

$

1,555

 

 

$

11,324

 

 

$

(11,761

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

885

 

 

 

594

 

 

 

(1,035

)

 

 

164

 

Net change in fair value of interest rate swap

 

45

 

 

 

 

 

 

(1,136

)

 

 

 

Other comprehensive income (loss)

 

930

 

 

 

594

 

 

 

(2,171

)

 

 

164

 

Comprehensive income (loss)

$

12,767

 

 

$

2,149

 

 

$

9,153

 

 

$

(11,597

)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

5


 

FORRESTER RESEARCH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

 

Six Months Ended

 

 

June 30,

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

11,324

 

 

$

(11,761

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

4,854

 

 

 

4,189

 

Impairment of property and equipment

 

626

 

 

 

 

Amortization of intangible assets

 

9,425

 

 

 

11,309

 

Net (gains) losses from investments

 

(2,365

)

 

 

44

 

Deferred income taxes

 

(1,737

)

 

 

(10,814

)

Stock-based compensation

 

5,266

 

 

 

5,533

 

Operating lease right-of-use asset amortization and impairments

 

7,417

 

 

 

6,415

 

Amortization of deferred financing fees

 

490

 

 

 

474

 

Foreign currency (gains) losses

 

(2

)

 

 

498

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

Accounts receivable

 

29,955

 

 

 

22,476

 

Deferred commissions

 

5,295

 

 

 

840

 

Prepaid expenses and other current assets

 

404

 

 

 

(1,451

)

Accounts payable

 

704

 

 

 

3,170

 

Accrued expenses and other liabilities

 

(33,548

)

 

 

(9,976

)

Deferred revenue

 

(6,902

)

 

 

18,799

 

Operating lease liabilities

 

(6,204

)

 

 

(6,216

)

Net cash provided by operating activities

 

25,002

 

 

 

33,529

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

 

 

 

(238,943

)

Purchases of property and equipment

 

(5,110

)

 

 

(4,666

)

Other investing activity

 

 

 

 

30

 

Net cash used in investing activities

 

(5,110

)

 

 

(243,579

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from borrowings, net of costs

 

 

 

 

171,275

 

Payments on borrowings

 

(18,688

)

 

 

(33,125

)

Payment of debt issuance costs

 

 

 

 

(857

)

Deferred acquisition payments

 

 

 

 

(766

)

Proceeds from issuance of common stock under employee equity incentive plans

 

2,010

 

 

 

4,280

 

Taxes paid related to net share settlements of stock-based compensation awards

 

(951

)

 

 

(130

)

Net cash provided by (used in) financing activities

 

(17,629

)

 

 

140,677

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(2,254

)

 

 

189

 

Net change in cash, cash equivalents and restricted cash

 

9

 

 

 

(69,184

)

Cash, cash equivalents and restricted cash, beginning of period

 

69,192

 

 

 

140,296

 

Cash, cash equivalents and restricted cash, end of period

$

69,201

 

 

$

71,112

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Cash paid for interest

$

2,368

 

 

$

3,791

 

Cash (received) paid for income taxes

$

(273

)

 

$

2,540

 

 

Non-cash financing activities for the six months ended June 30, 2019 include $3.7 million of debt issuance costs deducted directly from the proceeds of borrowings by the lender. Refer to Note 4 – Debt for further information.

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6


 

FORRESTER RESEARCH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1 — Interim Consolidated Financial Statements

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Forrester Research, Inc. (“Forrester”) Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations, comprehensive income (loss), and cash flows as of the dates and for the periods presented have been included. The results of operations for the three and six months ended June 30, 2020 may not be indicative of the results for the year ending December 31, 2020, or any other period.

Due to the Company’s operating segment realignment during the three months ended June 30, 2020, the revenue line items in the Consolidated Statements of Operations were updated to present Events revenues as a separate financial statement line. In the prior presentation, Events revenues were combined within the “Advisory services and events revenues” financial statement line. Prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the amount of total revenues previously reported.

 

Liquidity and Impact of COVID-19

The COVID-19 pandemic has significantly affected the Company beginning in March 2020 primarily through lower contract bookings and a reduction in revenues from the conversion of the Company’s events from in-person to virtual events. The Company also announced that its events in the second half of 2020 will be held as virtual events. While the duration and severity of this pandemic is uncertain, the Company currently expects a reduction in its subscription Research, Connect and Analytics revenues during the second half of 2020 due to reduced customer contract booking activity that began in March 2020, and which is expected to continue through at least the third quarter of 2020. The extent to which the COVID-19 pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from the Company’s current estimates due to inherent uncertainties regarding the duration and further spread of the outbreak, its severity, actions taken to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

The Company has implemented several cost-reduction measures that include reductions to travel, new hiring, and employee incentive compensation programs. The Company will continue to proactively respond to the situation and may take further actions that alter the Company’s business operations as may be required by governmental authorities, or that the Company determines are in the best interests of its employees and customers.

As of June 30, 2020, the Company is in compliance with its financial covenants under its Credit Agreement (refer to Note 4 – Debt). The Company currently forecasts that it will be in compliance with its financial covenants for at least one year from the issuance of these interim financial statements, after taking into consideration the measures noted above. If the impact of COVID-19 is more severe than currently forecasted this may impact the Company’s ability to comply with its financial covenants which could have a material adverse effect on the Company.

The Company assessed certain accounting estimates that generally require consideration of forecasted financial information in context with the information reasonably available to it and the unknown future impacts COVID-19 as of June 30, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the allowance for expected credit losses, the carrying value of its goodwill and other long-lived assets, valuation allowances for tax assets, and revenue recognition. While there was not a material impact to the consolidated financial statements resulting from the Company’s assessments as of and for the three and six months ended June 30, 2020, the Company’s future assessment of its current expectations of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to its consolidated financial statements in future reporting periods.

 

7


 

Presentation of Restricted Cash

The following table summarizes the end-of-period cash and cash equivalents from the Company's Consolidated Balance Sheets and the total cash, cash equivalents and restricted cash as presented in the accompanying Consolidated Statements of Cash Flows (in thousands).

 

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

Cash and cash equivalents

$

68,377

 

 

$

69,762

 

Restricted cash classified in (1):

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

787

 

 

 

203

 

Other assets

 

37

 

 

 

1,147

 

Cash, cash equivalents and restricted cash shown in statement of cash flows

$

69,201

 

 

$

71,112

 

 

(1)

Restricted cash consists primarily of collateral required for letters of credit. The short-term or long-term classification is determined in accordance with the expiration of the underlying lease as the letters of credit are non-cancellable while the leases are in effect.

Adoption of New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The standard amends the existing financial instrument incurred loss impairment model by requiring entities to use a forward-looking approach based on expected losses and to consider a broader range of reasonable and supportable information to estimate credit losses on certain types of financial instruments, including trade receivables. On January 1, 2020, the Company adopted the standard using the modified retrospective method in which prior periods are not adjusted and recorded a cumulative effect adjustment of $0.2 million to decrease retained earnings. Expected losses are based, in part, on the Company’s historical loss rate experience as well as management’s expectations of future losses as informed by current economic conditions.

The allowance for expected credit losses on accounts receivable for the six months ended June 30, 2020 is summarized as follows (in thousands):

 

 

Total

Allowance

 

Balance at December 31, 2019

$

628

 

Cumulative effect adjustment of adopting Topic 326

 

218

 

Provision for expected credit losses

 

550

 

Net write-offs

 

(456

)

Translation adjustments

 

(9

)

Balance at June 30, 2020

$

931

 

 

The Company adopted the guidance in ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment on January 1, 2020. The new standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and requires that instead, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The adoption of this standard did not impact the Company’s financial position or results of operations.

The Company adopted the guidance in ASU No. 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. The new standard modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including changes to fair value transfers and Level 3 fair value measurements. Changes required upon adoption of this standard are included in Note 8 – Fair Value Measurements and did not impact the Company’s financial position or results of operations.

The Company adopted the guidance in ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract on January 1, 2020. The new standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

 

8


 

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new standard provides guidance to simplify the accounting for income taxes in certain areas, changes the accounting for select income tax transactions, and makes other minor improvements. The new standard will be effective for the Company on January 1, 2021. The Company is currently evaluating the potential impact that this standard may have on its financial position and results of operations.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Finance Reporting. The new standard provides optional guidance for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting due to the risk of cessation of the London Interbank Offered Rate (“LIBOR”). The updates apply to contracts, hedging relationships, and other transactions that reference LIBOR, or another reference rate expected to be discontinued because of reference rate reform, and as a result require a modification. An entity may elect to apply the amendments immediately or at any point through December 31, 2022. The Company is currently evaluating the potential impact that this standard may have on its financial position and results of operations, including the standard’s potential impact on any contractual changes in the future that may result from reference rate reform.

Note 2 — Acquisitions

Forrester accounts for business combinations in accordance with the acquisition method of accounting as prescribed by Accounts Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”). The acquisition method of accounting requires the Company to record the assets and liabilities acquired based on their estimated fair values as of the acquisition date, with any excess of the consideration transferred over the estimated fair value of the net assets acquired, including identifiable intangible assets, to be recorded to goodwill. The Company did not have any business combinations during the six months ended June 30, 2020.

SiriusDecisions, Inc.

On January 3, 2019, Forrester acquired 100% of the issued and outstanding shares of SiriusDecisions, Inc. (“SiriusDecisions”), a privately-held company based in Wilton, Connecticut with approximately 350 employees globally. SiriusDecisions equips business-to-business (B2B) sales, marketing, and product leaders with the actionable research, frameworks, tools, operational benchmarks and expert advice they need to maximize performance and drive alignment. The acquisition creates several opportunities for the Company, including cross-selling services to the Company’s respective client bases, extending SiriusDecisions’ platform, methodologies, data, and best-practices tools into new roles, and accelerating international and industry growth. The acquisition of SiriusDecisions was determined to be an acquisition of a business under the provisions of Topic 805.

Pursuant to the terms of the merger agreement, the Company paid $246.8 million at closing after certain transaction expense adjustments, which was subject to a working capital adjustment.

SiriusDecisions’ operating results are reported within the Company’s Research, Consulting and Events segments. During the year ended December 31, 2019, the Company finalized the purchase price allocation and related accounting for the acquisition.

The Company recognized $1.7 million of acquisition costs in the six months ended June 30, 2019 related to the SiriusDecisions acquisition. The costs primarily consisted of investment banker fees and other professional services costs and are included in acquisition and integration costs within the Consolidated Statements of Operations.

Note 3 — Goodwill and Other Intangible Assets

Goodwill

 

The change in the carrying amount of goodwill for the six months ended June 30, 2020 is summarized as follows (in thousands):

 

 

Total

 

Balance at December 31, 2019

$

243,895

 

Translation adjustments

 

(694

)

Balance at June 30, 2020

$

243,201

 

 

The Company assesses goodwill for impairment annually on November 30, or on an interim basis if an event indicates a specific impairment may exist. As a result of the Company’s segment realignment during the three months ended June 30, 2020 (refer to Note 14 – Operating Segments for additional information), the Company performed a qualitative assessment of goodwill for all reporting units immediately prior to and after the reporting unit change. The Company concluded that no impairment existed.

As of June 30, 2020, the Company had no accumulated goodwill impairment losses.

 

9


 

Finite-Lived Intangible Assets

The carrying values of finite-lived intangible assets are as follows (in thousands):

 

 

June 30, 2020

 

 

Gross

 

 

 

 

 

 

Net

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Amount

 

 

Amortization

 

 

Amount

 

Amortizable intangible assets

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

$

109,688

 

 

$

44,303

 

 

$

65,385

 

Technology

 

16,719

 

 

 

8,550

 

 

 

8,169

 

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