Perficient, Inc. ( PRFT) Q4 2011 Earnings Call March 1, 2012; 10:00 am ET Executives Jeff Davis - President & Chief Executive Officer Paul Martin - Chief Financial Officer Analysts George Price - BB&T Capital Markets Brian Kinstlinger - Sidoti & Co. Peter Heckmann - Avondale Partners Matthew Mccormack - BGB Securities, Inc. Presentation Operator
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At times during this call we will refer to adjusted EPS. Our earnings press release includes a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles or GAAP. This is posted on our website at www.perficient.com.We have also posted a slide deck which includes a reconciliation of certain non-GAAP goals to the most directly comparable financial measures prepared in accordance with GAAP, along with additional operating metrics and revenue analysis by solution industry and platform on our website at www.perficient.com under Investor Relations. Jeff. Jeff Davis Thanks Paul. Well, again thanks everyone for joining, we are glad to be with you. This morning I am pleased to share our Q4 and full year 2011 results, as well as Q1 and 2012 guidance a little later in the presentation.
So the fourth quarter was a strong close for what we view as a great year for the company. Very consecutive revenue, record quarter with services revenue up 31%. EBITDA net of stock comp was up 25% and net income more than doubled. GAAP earnings per share doubled and adjusted earnings per share was up 19%. Services gross margins excluding stock comp improved 70 basis points and during the quarter billing rates for U.S. employees were at $125 an hour, that’s up about $5 from the year ago quarter. So running in that $125 range we expect that will improve again this year. Utilization as always is impacted due to seasonality. In the fourth quarter it was 78%. This year it was down about 1% from the prior year, but we expect it will again rebound back into the 80’s in the first quarter and we actually expect utilization overall to be higher for the year than it was in 2011 by a couple of points.
Investments in industry solutions and focus on key verticals continue to make a material impact. You’ve heard me talk about this before. We are very excited and please actually with the results we’ve gotten around those investments, particularly in healthcare. Another strong quarter for healthcare, represented 33% of revenues in the fourth quarter.Financial services are coming at a strong second for us and another area as you know we are investing in. 14% of revenues in the quarter, with automotive, energy and telecom, each representing 7% and then a smattering of others, obviously making up the difference. In addition to the solid delivery performance, bookings during the quarter were very strong, our highest ever in fact. We sold 16 deals north of $0.5 million during the quarter and you know that we don’t typically report specific booking at any given month, but January by the way was another record bookings month for Perficient, that’s both organic and of course with the acquisitions, but even net of acquisitions it was a record. So on a trailing 12-month basis through January, we are running about 20% year-over-year on bookings. So a strong backlog moving into the year here. We exited the quarter and the year with cash on hand and no debt. The cash we generated was put to use in the recent acquisition of PointBridge, which I’ll speak to in more detail in a few minutes. Client base, as well as the size of many of those relationships continues to grow. About 60% to 65% of our revenue now is coming from Fortune 1000 companies. That’s where we tend to focus our efforts. It’s an opportunity to build a relationship that can last and yield many years of multi-million dollar revenue. So during the year 2011 we had 53 clients at $1 million plus for the year. Half of those were actually north of $2 million and nine of those were north of $5 million, the largest being just under $10 million and I expect that will continue to increase in 2012 and it’s likely that we’ll have at least a couple if not a hand full of $10 million plus clients this year. Read the rest of this transcript for free on seekingalpha.com