Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Perficient, Inc. (NASDAQ:PRFT)

Q1 2012 Earnings Call

May 3, 2012 10:00 AM ET

Executives

Jeff Davis – President and CEO

Paul Martin – CFO

Analysts

George Price – BB&T Capital Markets

Peter Heckmann – Avondale

Brian Kinstlinger – Sidoti & Company

Operator

Good day, ladies and gentlemen, and welcome to the Q1 2012 Perficient Earnings Conference Call. My name is Laura, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, President and CEO, Jeff Davis. Please proceed.

Jeff Davis

Thank you very much and thanks everyone for joining. With me on the call today as usual is Paul Martin, our CFO. I want to thank you all for your time today. We’re excited to talk about our results and outlook. We’ve got about pretty usual 10 to 15 minutes of prepared comments and then we’ll open the call up of course for questions. Before we proceed, Paul, will you please read the Safe Harbor statement?

Paul Martin

Thanks, Jeff, and good morning, everyone. Some of the things we will discuss in today’s call concerning future company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today’s discussion.

At times during this call, we will refer to adjusted EPS. Our earnings press release including 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, 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 on our website at www.perficient.com under Investor Relations. Jeff?

Jeff Davis

Thanks, Paul. Well, again, thanks everyone for joining. As I mentioned the intro, we’re excited to be here today to talk about our quarter. Q1 got off I think, it’s a great start, got a year overall off to a strong start, we’ll obviously talk more about that later. But the quarter itself was the fourth consecutive revenue quarter – record revenue quarter with revenue growth of 33%.

By the way, I think it’s just one of many more that I expect in terms of record revenues, we are on a good – have a good momentum running right now and I expect that to continue. Again, we’ll talk a little bit more about that later. EBITDA increased 56% in the quarter and expanded by 160 basis points on a year-over-year basis while net income increased 67% on a year-over-year basis. GAAP EPS was up 67% and adjusted earnings per share was up 33%.

Utilization for North American employees was 81% during the quarter, slightly below where we like to run, but still a solid quarter and actually expects that to be moving into higher numbers right now in the current quarter and going forward.

Average bill rate increased $127 to $127 an hour for our North American employees and $117 an hour for all employees including offshore. That’s a high point we’ve reached just once previously and we expect ABR to continue to increase. I’d mentioned before that there was a GAAP between us and some of our higher price competitors that I think we can continue to close and we continue to approve that or validate that theory with the each quarter taking by.

I think the best news though for the quarter on top of the strong revenue was that we realized even more impressive quarter for bookings as you probably saw in the press release. Quarterly bookings were up 75% year-over-year in total, 40% higher than the Q4 2011 bookings which previously represented the strongest bookings quarter in company history. The press release also mentioned that we are winning larger and longer term deals.

We sold 28 deals north of $0.5 million during the quarter and those deals averaged about $1.2 million each and that compares with 16 deals over $0.5 a million in the fourth quarter of 2011, that average about $946,000 each and 22 in the first quarter of 2011 that averaged $866,000. So not only more deals are over $0.5 million, but considerably larger deals over $0.5 million as well.

So Paul is going to share some financial details for the quarter and I will be back to share some more insight into our performance of Q1 and the outlook for Q2. Paul?

Paul Martin

Thanks, Jeff. Total revenues for the first quarter of 2012 were $74.7 million, which represents a 33% increase over the year-ago quarter. Services revenue for the first quarter of 2012, excluding reimbursable expenses, increased 32% to $66.2 million. Year-over-year organic growth was 13%.

Services gross margin for the first quarter of 2012, excluding stock compensation and reimbursable expenses, increased to 34.1% from 32.4% in the first quarter of 2011, continuing our ongoing trend of year-over-year margin improvement.

SG&A expenses increased to $14.8 million in the first quarter of 2012 from $11.3 million in the comparable prior-year quarter. SG&A as a percentage of revenue was 19.8% in the first quarter of 2012 compared to 20% in the first quarter of 2011.

EBITDAS, defined as earnings before interest, taxes, depreciation, amortization and stock compensation for the first quarter of 2012 was $10.1 million or 13.5% of revenues compared to $7.1 million or 12.6% of revenues in the first quarter of 2011 and represents a 42% increase.

The first quarter of 2012 included amortization of $1.6 million compared to $1.1 million in the comparable prior-year quarter. This increase was associated with the acquisitions we’ve completed in 2011 and 2012.

The first quarter of 2012 also included acquisition cost of $0.7 million related to the acquisition of PointBridge completed in the quarter and accretion of the fair value of continued consideration related to 2011 acquisition of $0.2 million. Net income increased 67% to $3 million for the first quarter of 2012 from $1.8 million generated in the first quarter of 2011.

Diluted GAAP earnings per share increased to $0.10 a share for the first quarter of 2012 from $0.06 a share in the comparable prior year. Adjusted GAAP earnings per share increased to $0.20 a share for the first quarter of 2012 from $0.15 a share in the first quarter of 2011. Adjusted earnings per share is defined as GAAP earnings per share plus amortization expense non-cash stock compensation, transaction cost and fair value adjustments of continued consideration net related taxes divided by fully diluted shares outstanding for the period.

Our effective tax rate for the first quarter of 2012 was 40.1% compared to 40.9% for the first quarter of 2011. The decrease in the effective tax rate is primarily due to certain fixed items being recognized over a larger income base. Our ending global head count at March 31, 2012 was 1,507 colleagues including 1,310 global consultants and 197 sub contractors, this includes the additional of 67 global consultants and 36 subcontractors acquired as part of the PointBridge acquisition completed during the quarter.

Ending SG&A head count at March 31, 2012 was 273 which includes 12 SG&A employees acquired in the PointBridge acquisition. During the first quarter of 2012 we bought back 54,000 shares for a cost of $597,000 and as of March 31, 2012 we have spent $55.6 million on buying back 7.5 million shares since the program’s inception in 2008. We continue to believe that our share repurchase will drive future accretion in shareholder value.

We ended the quarter with $6.2 million in outstanding debt and $2.7 million in cash and cash equivalents. Our balance sheet continues to leave us well positioned to execute against our strategic plan. Our day sales are outstanding on account receivable were 78 days at the end of first quarter which is flat with the fourth quarter of 2011.

I will now turn the call over to Jeff for little more commentary behind the metrics. Jeff.

Jeff Davis

Thanks, Paul. Well again a great quarter all around and particularly when you consider how does the booking that we’ve talked about really the last couple of quarters will translate to revenue throughout the remainder of the year. I think it validates the optimism that we shared as we started the year and probably even extended from my perspective. So we’re very pleased with those results. And we continued to make great progress in the healthcare vertical and I wanted to highlight our success in partnering with Blue Cross Blue Shield entities. We continue to rapidly expand within that group. During the first quarter we served nine distinct Blue Cross, Blue Shield organizations and we continued to as they said aggressively pursue that. We’ve got a very, very strong put hold I would say within those organizations and a lot of referenceability among them while they are independent, there’s no centralization. There’s a lot of discussion in sharing and again referenceability. We’ve got the great success moving forward within those organizations substantial amount of revenue on a run rate basis and again I expect that to only increase.

Additionally, our landed expand go-to-market strategies continued to help us secure new clients and then grow them into large recurring relationships. I referred earlier in the call to those larger deals the number of them as well as the size. So I wanted to highlight this as well. During the quarter our top 50 customers represented about 64% of our total revenue and that customer subset at an average annualized run rate of $3.4 million a year, so on average top 50 customers producing $3.4 million a year on revenue.

You can imagine the efficiencies that come along with that and it also speaks to our strategy that we enacted really going back a couple of years to move more towards that Fortune 1000 base at least large customer IT spending base that allows us to do that. So that 64% and $3.4 million compares with 60% of total revenue at a run rate of $2.9 million for those customers, those top 50 customers in 2011. So we’ve increased that again by about – or nearly 20% from $2.9 million to $3.4 million per customer and from 60% of our total revenue to 64% in the first quarter of this year.

So we’re able to discuss on the M&A front, the PointBridge acquisition some on the year end call and again we want to reiterate that was a very impressive business, solid customers, great set of folks and capabilities. Added to the next year, great bill rates as well. And it’s really accelerated our momentum with Microsoft. And in fact, I’m confident we’re far and away the largest Microsoft National systems integrator in the U.S. now.

In the integration there with PointBridge by the way is largely complete and their simulation is well underway. So the guys are fitting in right away. I’m already leveraging those skills on existing accounts or new pursuits with the Legacy Company. As you know, when we did these acquisitions, we integrate them very tightly. We get the – the kind of basic block and tackle stuff done very, very quickly, typically within the first 30 days and then we’re on to cross selling and really assimilating these guys under our teams.

Regarding M&A, as I said before, our goal remains to add an additional $50 million in run rate revenue before the yearend and to do the same thing in 2013. So as I think I said on the last call, I kind of viewed PointBridge as a carryover from last year’s M&A program. And so, we still expect to get three more distinct deals done this year, trying to drive towards about $50 million additional on top of PointBridge run rate revenue.

We remain in active discussions with several firms, the pipeline there remained strong. The business has significant momentum right now as I mentioned earlier. I don’t know that I’ve ever been more excited as you can probably tell from my tone about our performance and prospects and while there is no guarantees on this, it appears that 2012 could well exceed our original projections. So we are excited about that and as I said – as long as that momentum continues we should be posting some really solid numbers for several quarters if not years to come.

So on to Q2 in 2012 Perficient expected second quarter 2012 services and software revenue including reimbursed expenses to be in the range of $77.5 million to $82.3 million comprised of $74.1 million to $77.9 million of the revenue from services including reimbursed expenses and $3.4 million to $4.4 million of revenue from sales and software.

The midpoint of the second quarter of 2012 services revenue guidance represents 21% growth over the second quarter of 2011 services revenue, so 21% year-over-year. We are optimistic about that or are actually excited about those results and those numbers. So we are looking forward to stamping out another good quarter here as we move into the Q2. And as you may have noted, the midpoint of that range in total services is pretty close to $80 million or pretty close to $320 million run rate.

Hence my comment earlier about an opportunity here for us to potentially exceed our original guidance range. Now despite that potential and opportunity, we are still going to reaffirm the existing range that we put out just a couple of months ago of $320 million in top line revenue and our full year adjusted earnings per share guidance of $0.88 to $0.98. Again we may be addressing that down the road, but given that we provided just a couple of months ago, we are going to stick with that range.

With that, we can open the call up for questions. Operator?

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, if you would like to ask a question. (Operator Instructions) Your first question comes from the line of George Price from BB&T Capital Markets. Please proceed.

George Price – BB&T Capital Markets

Thanks very much for taking my questions and guys congratulations on a very nice quarter and a very positive outlook.

Jeff Davis

Thanks, George.

George Price – BB&T Capital Markets

Just, Jeff my first question, right at the end there given that we didn’t see anything in the press release on 2012, so sounds like you’re very comfortable with the guidance you gave. I guess maybe since you said you don’t want to be more specific now but can you may be just talk a little bit about what you think is behind the momentum in the business from the demand perspective, I mean are you seeing why you think clients kind of moving forward with more work or is it just success and kind of broadening the market, the client base that you’re going after?

Jeff Davis

It’s probably – I think its combination of things first of all. I think we continue to see recovery for the type of work that we do. I probably referred to this before, the larger big brand name guys, the mega integrators I think it’s the first opportunity and a recovery for some of the pent up demand.

And I think frankly some of that block and tackle heavy lifting that they do is kind of winding down and a lot of projects are shifting or spend to shifting more to the boutique or fine tuning high value, high ROI work that we do. I see that first and foremost, because we’re seeing this across the board. But I think right behind that healthcare is there too. I’ll talk about that in a second but right behind I don’t think actually is the strategy that I referred to in this land and expand approach to go into market where we are pursuing larger accounts where we’ve got a broaden up portfolio now, to get in there perform good work and expand those relationships.

A lot of those accounts there is top 50 that I alluded to many of those start at a couple of hundred thousand dollars and are now running $3.4 million annualized per year and I expect that to only increase. I think that speaks a lot to the talent of our folks and our capabilities, our value proposition although our rates are increasing, as I mentioned. So it’s not necessarily a low cost provider, but honestly I think we position ourselves and hear from our clients that we are breath of fresh air, compared to some of the larger competitors or easier to work with, where more nimble of flexible and I think that deliver higher value ultimately.

And then, of course, I can’t go without mentioning healthcare, the healthcare vertical continues to drive nice revenue for us in growth. I will tell you that the relative growth in healthcare may be a little less than I expected only because we are seeing so much improvement across other sectors. So we are excited about that and I guess that for us a pipeline remains just incredible. And you know, the future looking forward from here at least in the near-term looks very strong. So I hope that answers your question.

George Price – BB&T Capital Markets

Yeah, right now it does. I guess specifically on healthcare, what percent of revenue was healthcare in the quarter?

Paul Martin

32 I think for the quarter.

George Price – BB&T Capital Markets

Okay, okay. And then just to confirm Paul that I got them all, but you have 900 K of acquisition one-time acquisition related expenses in the quarter?

Paul Martin

Right, right.

George Price – BB&T Capital Markets

Now, are the one-time expense there are benefits?

Paul Martin

Yeah, so there is a 900 K of acquisition cost and amortization was around a $1.06 million, I mean it will be similar to what we had in Q2 and that as I said has ramped up related to the recently completed acquisitions.

George Price – BB&T Capital Markets

Okay. Okay. And I guess lastly and then I will turn it over, you gave some nice revenue guidance for the second quarter, qualitatively talked about gross margin further gross margin improvement and earnings improvement. Can you – would you care to kind of quantify that at all or maybe extend on that?

Paul Martin

For the year, I would just reiterate what I said at the onset that we are looking for about 100 to 150 (inaudible) improvement in gross margins on net services and about the same amount on EBITDA for the year. So I hope that we can exceed that, but ultimately the goal again is to drive those two figures to close to 40% on gross margins and probably about 15% on EBITDA or high teen close to 20 on EBITDA and stock comp by it’s hard to get to that $500 million run rate by the end of next year.

So we expanded I think about 150 or so last year and again we are looking for about the same thing this year maybe a little slower momentum there, a little slower velocity, so 100 to 150 but again working hard to improve that. And I think we will see again improvement in Q2, if you look back at last year there is natural improvement in gross margins and EBITDA as we burn off a lot of the state and federal payroll taxes and things like that. And so we have additional costs in Q1 that go away in Q2.

And in addition Q2 is always a higher utilization quarter as well. so we are pushing for moving from 81% to 85% utilization which should deliver improved margins as well in the quarter, but again for the year overall a 100 to 150 on both those metrics.

George Price – BB&T Capital Markets

Okay, great, thanks very much. Good job.

Jeff Davis

Thank you.

Operator

Your next question comes from the line of Peter Heckmann from Avondale. Please proceed.

Peter Heckmann – Avondale

Good morning, guys.

Jeff Davis

Good morning Pete, how are you?

Peter Heckmann – Avondale

Some of the concentration by vendor looks like Oracle is down year-over-year is that primarily within feeble CRM type projects or can you provide some color to that?

Jeff Davis

It is, we – Oracle and hence our Siebel practice continues to kind of spread along I would say with the Siebel brand, I think it’s a great product I will tell you that we are seeing some improvement there or at least some interest from a pipeline perspective that’s an area that took a big hit, because it’s a big dollar items on the on premise implementation I will say sales force certainly have and other competitors certainly have an impact on it and factor and why it’s down, but a lot of they have to do is spend.

There is a lot of capability that Siebel brings to the table in terms of a complete comprehensive CRM capability that competitors can’t produce, but again that a big ticket item big-ticket, a big ticket implementation and hasn’t fully recovered yet, it even with that my view on it is that the full recovery won’t be back to what it was say in 2007 anyway, but it will be something lesser than that, although I still think there is some improvement coming.

Paul Martin

I think one other contributing factor to that is the acquisition we did of JCB in July and PointBridge in February increase the IBM and Microsoft component as you look at the display.

Peter Heckmann – Avondale

That make sense. Okay. And in business process management what kind tools are you using there and you feel that that business process management, business intelligent, are those some of the areas where you’re seeing the most interest or spending effort.

Paul Martin

That is certainly an area where we see a lot of – business analytics and integration and it’s kind of hard to separate the two. So as we break down the platforms, keep in mind or take it with a grain of salt that business integration and analytics and even portal are kind of hard to separate out – often you’re doing all three. In fact, in the case of analytics you’re always doing some kind of integration where you’re pulling data out to provide back – there is some kind of an analytic tool.

So certainly the area of business intelligence, business analytics is strong. BPMS is also very strong to your point, both on the thicker platform as well as IBM’s platform. WebSphere Process Server, Lombardi, IBM continues to show up that product and capability to be – I have a very, very formidable competitor, given especially that they built most of that from scratch and we’re a late entrant against someone like a TIBCO. But they’re very formidable now and there is a lot of demand for that product. We’ve been a lot of business going on in that space, again both IBM as well as TIBCO and to a lesser degree, just workflow in general also on Microsoft and the Oracle platforms.

Peter Heckmann – Avondale

Okay. And then lastly on the hiring front, can you talk a little bit about your plans to add to the bench organically this year and what type of expectations do you – the candidates have as well do you see – foresee any changes in the – in H1B or your ability to hire from offshore?

Paul Martin

Yes. So I’ll give you a simple view on the hiring plan. Right working off the midpoint of our guidance is 10%. I’m hoping to get a couple of percent of that out of rates and a couple of percent on year-over-year basis. We were 81% utilization last year. I’d like this year to be 83% or closer to it.

So, literally you could say we’re going to hire on average across the year linearly 6% roughly head count increase. And that’s probably across the board where we probably hire a little faster than that offshore and things continue on the track they are right now ultimately for the – throughout the entire year, but actually we are seeing a lot of onshore demand for these kinds of projects that I mentioned earlier very high RI, very hands on, very high touch. So, don’t necessarily lend themselves to a lot of offshore out of the gate, but that’s the general plan for hiring.

In terms of what we are seeing in the market, it’s still reasonable. I would say it’s not markedly changed from last year or maybe even the year before. We are still able to find highly talented folks at a reasonable rate. We got incredible recruiting engineer now that we built. We view that as I think I mentioned before as the best practice and we built an excellent team. I think it does a great job of outsourcing candidates and landing them here. So, we are not concerned about our ability to recruit and again the cost of recruits salaries coming is the same or less in some cases than our current average salaries. As I mentioned before, we are still building out a lot of the bottom of the pyramid allows us to hire a little less experienced people than we already have on average on board.

In terms of H1Bs, we don’t see any change there, meaning we don’t plan to do much hiring with the H1Bs with the current political climate. The clamps are still down on that for everyone. We are not immune to that. Thankfully we weren’t heavily dependent on it either. So, I think it impacts us potentially less than it does some of our other competitors. We are looking at bringing people over from our offshore development centers. You can leverage L1 VISA and example once they’ve been an employee for a year.

And we’ve done that to some degree already over the years from our China facility, but we’re looking to do the same thing out of India as well to help meet that need. But honestly domestic hiring is going okay, there’s always a shortage in this industry and certainly a shortage of good people, but we’ve got some new recruiting strategies that we deployed over the last six to nine months where we’re doing a lot more passive recruiting, actually reaching out to people who aren’t looking for a job what we call sourcing, which are tend to be the really talented folks like I said people – the best people are always employed and don’t necessarily have the resume out on the message boards or Master et cetera. So there is an overview recruiting for 2012.

Peter Heckmann – Avondale

All right. Appreciate it.

Jeff Davis

You bet.

Operator

(Operator Instructions) Your next question comes from the line of Brian Kinstlinger from Sidoti & Company. Please proceed.

Brian Kinstlinger – Sidoti & Company

Hi, guys. How are you?

Jeff Davis

Hi, Brian.

Brian Kinstlinger – Sidoti & Company

Couple of first just some numbers questions, you mentioned healthcare was 32% I didn’t get to open the queue what about the financials and some of your percent of revenue?

Paul Martin

So healthcare was 32 financial services, banking etcetera 13 auto and transportation, 9 energy and utility eight, they and we actually have a deck out of the website that gives you those details.

Brian Kinstlinger – Sidoti & Company

And that also have the head count numbers I’ve been able to write them down fast enough.

Paul Martin

Yeah. So the numbers I provide here for the ending head count but we have the average head count information out there on the end of the debt.

Brian Kinstlinger – Sidoti & Company

Okay. And then maybe Jeff can you give us some update on the progress and maybe I missed it, but from here and consortium of that you are bidding on where are they and maybe where are other member firms in discussing integration with you?

Jeff Davis

It’s still progressing well, we actually expect to have two customers stand up for the next two weeks. So the two more of the consortium that I have referred to in the past. I guess that we got the one now, and we had verbal from these guys before. So it’s moving along at a decent pace, a little slower than maybe we had originally expected although as you can tell us and it hasn’t impacted us.

So this would just be more upside for the company this year. So two of them signed up with the literally with the next two weeks according to my sales guide and we are also proposing another factor that there was maybe a little bit of twist that’s coming probably sooner than I expected, which is a good thing is the SAS model that we are proposing to actually build and host and manage four Premier has a number of customers interested in that as well.

We will be – we are actually working right now to develop the proposal for our initial phase of that and costs two Premiers. So that’s a direct relationship for Premier that will have for this SAS operating model, but obviously the revenue stream comes from their customers and they have got enough customers lined up with interests in that to go ahead and make that investment whether as to build that out presumably I guess so we are in the proposal stage there.

So it’s coming along nicely and like I said the good news is you know, there was a small amount of bookings in the less than 2% I think or 2%, 3% of bookings in the first quarter from the premier relationship. And so like I said, I think still that will heat up this year as I mentioned probably more this quarter, beginning by the end of this quarter and into the second half of this year. And then again combined with where we are already get going should add some nice upside for us for the year.

Brian Kinstlinger – Sidoti & Company

I know the dealer size is really it was too similar to what you have been talking about and I think there were more than two originally, I think there were four. So the other two, have they decided not to go forward or are they just dragging their feet a little bit more?

Jeff Davis

I would say, they haven’t decided what they may impact look at the SAS model and decide to go that route. The initial it will be multiphase deals keep in mind. So the ultimate deal size, the ultimate transaction over time which might be two or three projects/contracts with those consortium members will end up being similar to the size we talked about in the past.

Brian Kinstlinger – Sidoti & Company

Okay. And – you mentioned specifically Blue Cross and all the Blue Cross’s you’re working with separately. I think that you had mentioned in the last call we were doing an – I think it was an ICD-10 assessment for them is that right?

Jeff Davis

Yeah, we are doing ICD-10 work for a number of those guys. That’s not all the work that we are doing for them and that’s not the work we are doing for all of them.

Brian Kinstlinger – Sidoti & Company

Right.

Paul Martin

So when I probably mentioned before it was NASCO, about a $2.5 million initial beyond assessment. It was assessment plus ICR contracture and some initial services that bring them off of a Cobol Mainframe environment to an Enterprise Service Business environment where they could create services to provide all they have – all the needs they have around claims processing, beyond just ICD-10 compliance. Literally I think of it as a kind of throwing away what they have versus remediating it for ICD-10 are just starting over.

Brian Kinstlinger – Sidoti & Company

And when might be larger implementation piece go up for RFP?

Paul Martin

The initial size – the initial piece is pretty good size. So we are timing on that. I’m not even certain when we are going to be ramping it up. I would say it wouldn’t be over the second half of the year for sure.

Brian Kinstlinger – Sidoti & Company

Okay.

Paul Martin

But the initial fees was $2.5 million or so.

Brian Kinstlinger – Sidoti & Company

Right. And then you mentioned a 40% increase in your bookings, I was going to ask you was mostly healthcare but then you mentioned that other sectors may grow faster than healthcare, so maybe talk about where else the bookings you’re seeing the strengths and what’s driving that usage?

Paul Martin

Just to be careful what I said was that healthcare may not grow as much faster than the other sectors as I originally though t it would, but (inaudible) we’re excited I onetime said we might end up with 40% revenue from healthcare by the end of the year, that still may be true. But like I said the good news is there’s some other upside out there I hadn’t necessarily anticipated where there is picking up some momentum in others sectors. So,

Brian Kinstlinger – Sidoti & Company

And which sectors are those?

Paul Martin

We have a little breakdown on the bookings by...

Jeff Davis

(Inaudible).

Brian Kinstlinger – Sidoti & Company

Maybe without numbers. What does it feel like?

Jeff Davis

Retail.

Paul Martin

Yeah retail was a nice area for us. We’re actually seeing consumer goods, retail come back for us and actually I’d say retail was never a strong sector for us, I would say we’ve entering more into retail. The consumer goods are strong, automotive remained strong, I mean of course financial services we expect to see more pickup there. Although we really haven’t seen that yet. It was 13% revenue, I’m expecting that again to move probably into the higher teens hopefully by the end of this year as we get more traction from the vertical that we’re building out there. We can get you a specific breakdown by vertical, no problem.

Brian Kinstlinger – Sidoti & Company

All right, and I guess the last question, I don’t want to push you to commit to any higher numbers of course but bookings are up 75% and I think you mentioned year-over-year drop 40% from peak levels in December. Revenue rose about 12% or 13% I think organically is what you said 13. So I guess I’m wondering do you expect to keep accelerating towards 20% I mean 205 still much a less than the increases your seeing in bookings and then no timeframe, but I mean is that generally how you feel based on what’s going on in the healthcare and then some pickup in some other industries.

Paul Martin

I do think ultimately. So we got to the 13% organic only and the bookings number we are not inorganic, but I will tell you that bookings for the quarter organically were up 54% year-over-year. So, we’re kind of pursuing a lot of technique here. So that’s good news, so organic midpoint of guidance, organic growth for Q1 was about 13% 12.5%.

Q4 was actually 14% September quarter last year was 10%. I think 15% is doable. I would like to see as first thing in quarters at that level and I think that’s certainly possible. The gap between that and the bookings that we are seeing though and again ultimately this is good and it could in fact drive us to 20 at some point Brian, but it is a more of a function that we are seeing longer-term engagements. So our backlog has grown, but it has grown more into the future that necessarily in the near term that makes sense.

And again that being said that still a very great platform for growth and we are certainly not too large to post 20% numbers. I’m going to speculate into hat within this year? Probably not, but I would say second half of the year getting us to maybe a 15% year-over-year level within the third and fourth quarter as possible, but as I said before we are reaffirming our existing guidance. We, of course, will revisit that each quarter and maybe we will have an opportunity to increase it in the next quarter, but having just put out their couple of months ago I wanted to stick with that and see how bookings are full this quarter.

Brian Kinstlinger – Sidoti & Company

Great. Thank you so much.

Jeff Davis

Thanks Brian.

Operator

There are no further questions at this time. I would like to turn the call back over to Jeff Davis for closing remarks.

Jeff Davis

All right, well again thank you all for your time today and your interest in profession going forward. We look forward to speaking to you again in a quarter. Thank you.

Operator

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Perficient's CEO Discusses Q1 2012 Results - Earnings Call Transcript
This Transcript
All Transcripts