Welcome to the Q1 2013 Forrester Research Earnings Conference Call. My name is Trish, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. With me today are George Colony, Forrester’s Chairman of the Board and CEO; and Mike Doyle, Forrester’s Chief Financial Officer. George will open the call. Mike Doyle will follow George to discuss our financials. We’ll then open the call to Q&A. A replay of this call will be available until May 24th, 2013 and can be accessed by dialing 1888-843-7419 or internationally at 1630-652-3042. Please reference the pass code 5077393. Before we begin, I’d like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expect, believe, anticipate, intend, plans, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company’s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Some of the important factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission. The company undertakes no obligation to update publicly any forward-looking statements whether as result of new information, future events or otherwise. I’ll now hand the call over to George Colony.

Good afternoon and thanks for joining the Q1 conference call. I will spend a few moments reviewing the quarter after which Mike Doyle our CFO will give a full financial update. Mike Morhardt, Forrester’s Head of Sales is currently travelling in Asia in his place Kelley Hippler, Forrester’s Head of Sales Operations will join Mike and me for questions and answers. The top line on the quarter is that we’re making progress toward recovery but this work is far from completion. With employee attrition as attenuated and some sales regions had strong performance. New business sales were challenged in the quarter and Richmond came in at below 100%. We all have to remember that restoring the company to traditional levels of performance will require multiple quarters of hard work and change it cannot be completed into two to three months. Over the next few minutes, I would like to focus on a few key areas of our business. Number one, leaderships specifically in sales; two, growth; three, differentiation; and finally four, the use of capital. First, I would like to talk about leadership. As I mentioned on the Q4 call our new Chief Sales Officer, Mike Morhardt has brought a new life and vigor into the sales organization. He is getting high grades from his sales people for is direct and honest communications he is focused on process and his constructive coaching in how to reach and serve prospects and clients. In the job search I was looking for a sales leader with personal strength and a point of view in how to build a world class organization and I believe that in Mike we have both. Now with that said, we must still work to ensure that leadership throughout the sales organization can meet its commitments. Where we have…

Thanks George. I will now begin my review of the financial performance for Forrester's first quarter results, the balance sheet at March 31, our first quarter metrics and the outlook for the second quarter and full year of 2013. Please note that the income statement numbers I am reposting are pro forma and exclude the following items. Amortization of intangibles, stock-based compensation expense, reorganization costs, net gains and losses from investments. Also, for 2013 we will utilize an effective tax rate of 39% for pro forma purposes. The actual effective tax rate for the first quarter of 2013 was approximately 37%. The first quarter Forrester exceeded its revenue pro forma operating margin and EPS guidance driven by strong consulting performance in our M&S business. In addition, our balance sheet remains strong with cash and marketable securities increasing 13% from December 31, 2012. Financially, we had a very good quarter. As George mentioned in his comments, we are still work in progress on the sales front. We saw solid performance from some of our sales teams while the other sales teams are still getting traction. You see this evidenced in our deferred revenue which was flat to prior year and our agreement value which is down 1% versus prior year. While we are making progress, there is more work to do before we will declare our recovery complete. Now let me turn to a more detailed review of our first quarter results. Forrester’s first quarter revenue increased 2% to 71.5 million from 70.3 million in the first quarter of 2012. First quarter research services revenue increased 1% to 50.4 million from 49.8 million last year and represented 70% of total revenue for the quarter. Our first quarter advisory services and other revenue increased 3% to 21.1 million from 20.5 million in…

We will now begin the question and answer session. (Operator Instructions). Our next question comes from Brennan Matthews from Northland Securities, please go ahead.

I am calling in for Bill, just a couple of quick questions for you guys. Have you seen any measurable impact yet on renewals or enrichment from the play books?

I would say not as yet. The impressionistic view is a number of franchise said that they love the fact that it's moving us away from what I call the big pile of research problem, where CIOs an example would go online of computing our big data in search and they would get 500 documents. Now it is a very clear simple way for them to see all the research for the CIO or cloud computing or whatever the topic is and to see it across the whole life cycle. So impressionistically we are feeling really good about it. We use something called the customer experience index or customer satisfaction. So we are about to test it with CXi. We have not done that as yet.

Just to build on that George, we have gotten very good feedback from our clients about the concepts, I think to George’s point. The great thing about the playbook is that it maps to how our clients think about problems and it’s helping us to become more embedded. So while it’s still early days and we haven’t been able to correlate that. We do feel confident that over the fullness of the year it will impact renewal rates as well as enrichment rates.

Can you tell us at all, how growth was split between tech and marketing and strategy?

You mean in the guidance, running for the full year?

Yes.

We haven’t broken that out. I think it’s a fair assumption to say that we expect our marketing strategy business to grow at a faster rate than our traditional business technology business, that's sort of the trend that we experienced up until last year and we expect that we are going to rebound and get that back on track. But we haven’t given specific guidance at this point in terms of the BT and M&S businesses.

(Operator Instructions) Our next question comes from Vincent Colicchio from Noble Financials, please go ahead.

You said in your prepared remarks that senior sales leadership is still not where it needs to be in certain regions, I think you mentioned Eastern U.S., and Pacific Rim as far as being strong, so I assume your weaknesses are in the rest of the U.S. and Europe. First thing, am I right on that, and what is the source of the weakness at this point? Did you just don't have the right people in the positions or do you have some attrition that hurt you?

Hey Vince this is Kelly. So to your point yes the areas where we are still putting some focus are Europe, new business and then in North America in the West. Two of those three areas we had new leaders who just took on their roles and are just coming up to speed with their teams and their businesses and we have every confidence that over the fullness of time they will be able to deliver business expectations. In Europe, we are still in the process of finding a leader to run that organization. so the areas we have gaps are either due to new leaders or open headcount two things that we expect to remedy over the fullness of time and are very pleased with the performance that our existing leaders were able to contribute in Q1.

And Mike, as per your guidance for the year, it looks like you are assuming a slight decline of basically relatively flattish second half in revenue first to first half. Is there something seasonally going on there or do you think you are being conservative?

We are being cautious. I think similar to the first quarter. I think that given last year's performance we are more reliant upon one-time and less reliant on syndicate to drive our revenue numbers Vince. so we are at this point being conservative. I really want to see how the second quarter plays out to get a better sense for, are we really getting the foundation built which I think is what's going to happen and then we will go from there. I would agree if you just look at what happened in the first quarter. It would certainly suggest that revenue ought to up and EPS ought to come up. But at this point, I think it’s still too early in the year for us to make that call given all the changes that have gone on, I think we are, I guess they were making good progress but I think it’s premature to adjust our full year to reflect those things.

And how far long are you in terms of resigning sales territories? I mean are we in the sixth inning?

Sure. Actually it’s still early days there Vince so one of the deliberate parts of the strategy and definitely one of the areas that hurt us in 2012 was breaking that relationship between client and sales rep. So, this really is an evolution that we are going through to move to a geographic footprint so what we are doing is as an individual moves and potentially takes another role on another team or territory becomes available, we are at that point aligning to a resource in region but one of the things that we are adamant about not doing this year is breaking those client relationships because you lose a lot of capital and as we saw from the Q1 results, it still takes time to build those relationships back up. So, I would say we are probably in the first third of the game right now.

If I recall Mike, I think he said it could take as long as two or three years to get the whole process done by the time instead of whether all evolved in a natural way and stick to his guideline which was minimize the number of accounts shifts. So, I think it’s going to take little time. That’s all.

(Operator Instruction). Our next question comes from Tim Mchugh from William Blair. Please go ahead.

Hi, this is Matt Hill in for Tim Mchugh this afternoon. Just a quick question on the client count numbers, it looks like the dollar retention stayed flat but client count, the decrease picked up a little bit this quarter. Are you guys seeing any difference between the sizes of the clients, are you doing better retaining some of the bigger ones and maybe losing some smaller guys?

I think to give you some perspective Matt and I probably should have put in my script because we’ve had a couple of quarters really, it’s a third one in the row with this steady decline and it’s a function of new business. So, a lot of our business, there is a certain level of churn that always occurs in our business, typically the smaller clients and smaller vendors, not surprisingly. And the way this cycles works is sort of the new business group is sort of working at full potential. we’re bringing in more new clients than are churning and leaving this system and I think what we had some transition in our new business which Kelly’s referenced that we’ve got new leader, I think we’re getting back on track. Until that gets back on track, you’re going to see this client count noises I call it. The fact that dollar retention is holding up so just larger clients are staying and that’s not surprising. So, I think we’ve just got to work through the new business piece and I think this will settle itself. So, we probably have another quarter or two of noise until that starts settling a bit. That might get better sooner or might take longer, I’m not sure.

Okay. And I may have missed this earlier in the call but the research analyst turnover attrition, can you comment on the trends there?

Trend is very positive, we saw research attrition really ramped down nicely in the first quarter we were really happy. I think, I mentioned in a couple calls ago that that had been spiking up and down, and we saw it really follow up nicely. We’re really happy actually with where attrition is from a research standpoint right now and obviously we’re hoping to sustain it. We did make as I think I mentioned in last call, changes to compensation for non-sales employees and specifically we made changes to the research teams both in their variable bonus pay as well as their pay for performance and I think that’s beginning to have some effect. So the trend is really good and overall attrition is down and certainly well below last year’s levels and well below what we are seeing in the previous quarters.

Okay and then just one more, in the press release you have mentioned different geography performance and also talked about different performances within sales teams. Were those related comments or is that speaking into different trends may be macro trends within some different geographies outside of the new sales leadership?

First of all, we still have, you know we have got a continuing challenge in Europe and I think some is macro but I think as Kelly referenced, we are looking for a sales leader there and because Mike has shifted his organization and his leadership has now carved out a little bit more geographically, we have a challenge in Europe really last year was tough year for us in Europe and we are not opted the best to start there. The west is because of the leadership change, we have a brand new leader there, it’s performing as well as North America is but I think that’s sort of temporal situation and as the leaders settles in that’s going to resolve itself. So and then new business cuts across all geographies, so there is a little bit of geographies spin when we talk to but there is also something that have broader base. A new business has broader base but then think about Europe as just an ongoing challenge that we are working to resolve and the west which I think again is temporal and that’s to going to resolve itself rather too quickly.

At this time we have no further questions. So now I’ll turn the call back over to Mike Doyle for closing remarks.

Thank you very much. Thanks everyone for joining our call and thanks for joining us at the start of the year and we look forward to seeing many of you right on the road in the upcoming quarter.

Thank you ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.