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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-93003
FORRESTER RESEARCH, INC.
COMMON STOCK
50,852 SHARES
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The stockholders of Forrester Research, Inc. listed on page 7 are
offering and selling 50,852 shares of our common stock under this prospectus.
BEFORE PURCHASING SHARES OF OUR COMMON STOCK YOU SHOULD CAREFULLY REVIEW
THE RISK FACTORS SECTION OF THIS PROSPECTUS WHICH BEGINS ON PAGE 2.
Our common stock is listed on the Nasdaq National Market with the trading
symbol, "FORR." On May 22, 2000, the closing price of one share of our common
stock on the Nasdaq National Market was 48.875.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is May 22, 2000
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TABLE OF CONTENTS
Page
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FORRESTER RESEARCH, INC.......................................... 1
RISK FACTORS..................................................... 2
USE OF PROCEEDS.................................................. 7
SELLING STOCKHOLDERS............................................. 7
PLAN OF DISTRIBUTION............................................. 8
WHERE YOU CAN FIND MORE INFORMATION.............................. 9
VALIDITY OF SHARES............................................... 10
EXPERTS.......................................................... 10
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FORRESTER RESEARCH, INC.
We are a leading independent Internet research firm that conducts
research and analysis on the impact of the Internet and emerging technologies on
business strategy, consumer behavior and society. We provide our clients with a
comprehensive and integrated perspective on technology and business, which we
call the Whole View of Internet commerce. Our Whole View approach helps
companies evolve their business models and infrastructure to embrace broader
on-line markets and to scale their Internet operations. We help our clients
develop e- business strategies that use the Internet and other emerging
technologies to win customers, identify new markets and gain competitive
operational advantages. We target our products and services to large
enterprises, Internet companies and technology vendors. Senior management,
business strategists and marketing and technology professionals use our
prescriptive, actionable research to understand and capitalize on the Internet
and emerging business models and technologies.
In addition to analyzing the Internet, we also use Internet
technologies as an integral part of our business. We have developed a technology
platform that we call "Forrester eResearch" that allows us to conduct, design,
sell and deliver our research over the Internet in a format specifically
developed to maximize its impact and effectiveness. Our eResearch platform
enhances our research data and content quality and provides our clients with
instant access to our research, on-line tools and presentations and interactive
services.
Our principal executive offices are located at 400 Technology Square,
Cambridge, Massachusetts 02139 and our telephone number is (617) 497-7090. Our
Internet address is www.forrester.com. The information contained on our web site
is not incorporated by reference in this prospectus. Unless the context
otherwise requires, references in this prospectus to "Forrester", "we", "us" and
"our" refer to Forrester Research, Inc. and our subsidiaries.
Technographics and Forrester are our registered trademarks. The Whole
View, Forrester eResearch, eBusiness Voyage, Power Rankings, Adwatch and
Internet User Monitor are our trademarks.
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RISK FACTORS
Investing in our common stock involves a high degree of risk. You
should certainly consider the risks and uncertainties described below before
purchasing our common stock. If any of the following risks actually occur, our
business, financial condition or results of operations could be harmed. In that
case, the trading price of our common stock could decline, and you could lose
all or part of your investment.
IF WE DO NOT ATTRACT AND RETAIN QUALIFIED PROFESSIONAL STAFF, WE WILL NOT BE
ABLE TO MAINTAIN OUR POSITION IN THE MARKET OR GROW OUR BUSINESS
Our future success will depend in large measure upon the continued
contributions of our senior management team, research analysts and experienced
sales and marketing personnel. Thus, our future operating results will be
largely dependent upon our ability to retain the services of these individuals
and to attract additional qualified people from a limited pool of qualified
candidates. We experience intense competition in hiring and retaining
professionals from developers of Internet and emerging technology products,
other research firms, management consulting firms, print and electronic
publishing companies and financial services companies. Many of these firms have
substantially greater ability, either through cash or equity, to attract and
compensate qualified people. In addition, the Internet has created many
opportunities for people with the skills we seek to form their own companies or
join start-up companies, and these opportunities frequently offer the potential
for significant future financial profit through equity incentives that we cannot
match. If we lose professionals or are unable to attract new talent to
Forrester, we will not be able to maintain our position in the market or grow
our business.
IF WE DO NOT MANAGE OUR GROWTH EFFECTIVELY, IT COULD ADVERSELY AFFECT OUR
ABILITY TO GROW REVENUE AND COULD INCREASE OUR OPERATING EXPENSES
Our growth revenue has placed significant demands on our management and
other resources. Our revenues increased approximately 72% to $30.8 million in
the three months ended March 31, 2000 from $17.9 million in the three months
ended March 31, 1999 and approximately 42% to $87.3 million in the year ended
December 31, 1999 from $61.6 million in the year ended December 31, 1998. Our
ability to effectively manage growth will require us to continue to develop and
improve our operational, financial, electronic research collection and
distribution, technology and other internal systems. We must also continue to
expand our business development capabilities and continue to train, motivate and
manage our employees. If we are unable to effectively manage our growth, it
would have an adverse effect on the quality of our products and services, our
ability to retain key personnel and to grow revenue and could increase our
operating expenses.
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OUR OPERATING RESULTS FLUCTUATE AND OUR STOCK PRICE MAY BE VOLATILE AS A RESULT
Our revenues and earnings may fluctuate from quarter to quarter based
on a variety of factors, many of which are beyond our control. The factors
include, but are not limited to:
- the timing and size of new and renewal memberships for our
research from clients;
- the timing of revenue-generating Forum events sponsored by us;
- the utilization of our advisory services by our clients;
- the introduction and marketing of new products and services by us
and our competitors;
- the hiring and training of new analysts and sales personnel;
- changes in demand for our research; and
- general economic conditions.
As a result, our operating results in future quarters may be below the
expectations of securities analysts and investors which could have an adverse
effect on the market price for our common stock. Factors such as announcements
of new products, services, offices or strategic alliances by us or our
competitors, as well as market conditions in the Internet and emerging
technologies services industry, may have a significant impact on the market
price of our common stock. The market price for our common stock may also be
affected by movements in prices of stocks in general.
A DECLINE IN RENEWALS FOR OUR MEMBERSHIP-BASED RESEARCH SERVICES COULD ADVERSELY
AFFECT OUR REVENUES
Our success depends in large part upon renewals of memberships for our
research products. Approximately 77% of our revenues in the three months ended
March 31, 2000 were derived from our membership-based research products. In
addition, approximately 74% of our client companies with memberships expiring
during the twelve months ended March 31, 2000 renewed one or more memberships
for our products and services. A significant decline in renewal rates for our
research products could have an adverse effect on our revenues.
LOSS OF KEY MANAGEMENT COULD AFFECT OUR ABILITY TO RUN OUR BUSINESS
Our future success will depend in large part upon the continued
services of a number of our key management employees. The loss of any one of
them, in particular George F. Colony,
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our founder and Chairman and Chief Executive Officer, could adversely
affect our business.
IF WE DO NOT ANTICIPATE AND RESPOND TO MARKET TRENDS, WE MAY NOT REMAIN
COMPETITIVE
Our success depends in part upon our ability to anticipate rapidly
changing technologies and market trends and to adapt our research to meet the
changing information needs of our clients. The technology and commerce sectors
that we analyze undergo frequent and often dramatic changes. The changes
include:
- the introduction of new products and obsolescence of others;
- the use of technology to transform existing and create new
business models;
- shifting strategies and market positions of major industry
participants;
- paradigm shifts in system architectures; and
- changing objectives and expectations of users of technology.
The environment of rapid and continuous change presents significant
challenges to our ability to provide our clients with current and timely
analysis, strategies and advice on issues of importance to them. Meeting these
challenges requires the commitment of substantial resources. Any failure to
continue to provide insightful and timely analysis of developments, technologies
and trends in a manner that meets market needs could have an adverse effect on
our market position and results of operations.
IF WE DO NOT DEVELOP AND OFFER NEW PRODUCTS AND SERVICES, WE COULD LOSE OUR
COMPETITIVE POSITION AND FAIL TO GROW OUR BUSINESS
Our future success will depend in part on our ability to offer new
products and services. These new products and services must successfully gain
market acceptance by addressing specific industry and business organization
sectors, anticipating and identifying changes in client requirements and changes
in the technology industry. The process of internally researching, developing,
launching and gaining client acceptance of a new product or service, or
assimilating and marketing an acquired product or service, is risky and costly.
We may not be able to introduce new, or assimilate acquired, products or
services successfully. Our failure to do so would adversely affect our ability
to maintain a competitive position in our market and continue to grow our
business.
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THE MARKET FOR RESEARCH PRODUCTS AND SERVICES IS COMPETITIVE AND IF WE FAIL TO
COMPETE EFFECTIVELY, WE COULD LOSE OUR MARKET POSITION
We compete in the market for research products and services with other
independent providers of similar services. We may also face increased
competition from Internet-based research firms. Some of our competitors have
substantially greater financial, information- gathering and marketing resources
than we do. In addition, our indirect competitors include the internal planning
and marketing staffs of our current and prospective clients, as well as other
information providers such as electronic and print publishing companies,
survey-based general market research firms and general business consulting
firms. Our indirect competitors may choose to compete directly against us in the
future. In addition, there are relatively few barriers to entry into our market
and new competitors could readily seek to compete against us in one or more
market segments addressed by our products and services. Increased competition
could adversely affect our operating results through pricing pressure and loss
of market share.
IF WE FAIL TO INTEGRATE OUR RECENTLY COMPLETED ACQUISITION EFFECTIVELY, IT COULD
ADVERSELY AFFECT OUR OPERATING EXPENSES AND COULD CAUSE US TO FAIL TO ACHIEVE
THE BENEFITS WE EXPECTED
We recently acquired Fletcher Research Limited, an Internet research
company located in the United Kingdom. It was our first acquisition and our
management has had no experience to date integrating acquisitions into our
business. The integration of any acquisition can be disruptive, divert
management time and attention and result in a failure to realize the expected
benefits of the acquisition. The problems may be accentuated where the acquired
company is foreign and located far from our headquarters. If we do not integrate
the Fletcher acquisition effectively, we could fail to achieve the benefits we
expected.
OUR CHAIRMAN AND CEO HAS SIGNIFICANT VOTING POWER AND MAY EFFECTIVELY CONTROL
THE OUTCOME OF ANY STOCKHOLDER VOTE
George Colony, our Chairman and Chief Executive Officer,
beneficially owns approximately 43% of our common stock. As a result, he has
the ability to substantially influence, and may effectively control, the outcome
of corporate actions requiring stockholder approval, including the election of
directors. This concentration of ownership may also have the effect of delaying
or preventing a change in control of Forrester even if such a change of control
would benefit other investors.
OUR CORPORATE GOVERNANCE PROVISIONS MAY DETER A FINANCIALLY ATTRACTIVE TAKEOVER
ATTEMPT
Provisions of our charter and by-laws may discourage, delay or prevent
a merger or acquisition that stockholders may consider favorable, including
transactions in which stockholders would receive a premium for their shares.
These provisions include the following
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- any action to be taken by stockholders must be taken at a meeting
and may not be taken by written consent;
- stockholders must comply with advance notice requirements before
raising a matter at a meeting of stockholders or nominating a
director for election;
- only our chairman, chief executive officer or, if there is none,
the president or the board of directors may call a special
meeting of stockholders;
- our board of directors is divided into three classes and the
members may be removed by the stockholders only for cause; and
- our board of directors has the authority, without further action
by the stockholders, to fix the rights and preferences of and
issue shares of preferred stock.
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USE OF PROCEEDS
All net proceeds from the sale of the shares of Forrester common stock
will go to the stockholders who offer and sell them. We will not receive any
proceeds from this offering.
SELLING STOCKHOLDERS
The selling stockholders, William Reeve and Neil Bradford, acquired
their shares of Forrester common stock from us in exchange for 100% of the
ordinary shares of Fletcher Research Limited, a business that we acquired in
November 1999. This acquisition was accounted for as a pooling of interests.
Fletcher Research Limited is a limited liability company located in London,
England. Each of the selling stockholders is a party to a registration rights
agreement in which we agreed to register 25% of their shares of Forrester common
stock and to use our best efforts to keep the registration statement effective
until November 30, 2000. We previously registered a portion of these shares
pursuant to a registration statement (File No. 333-95663) filed with the
Securities and Exchange Commission. Registration of these shares does not
necessarily mean that the selling stockholders will sell any or all of the
shares.
The material relationships between the selling stockholders and
Forrester are as follows: William Reeve is the research director of Fletcher
Research Limited, now a wholly-owned subsidiary of Forrester and Neil Bradford
is the managing director of Fletcher Research Limited. Each of the selling
shareholders has entered into an employment agreement with Fletcher Research
Limited. In addition, one or more of the selling stockholders may donate or
transfer as gifts some or all of their Forrester shares, or may transfer their
shares for no value to other beneficial owners. The selling stockholders will
include these donees or transferees as selling stockholders in a prospectus
supplement if the donees or transferees wish to use this prospectus to re-offer
the shares.
The shares listed below represent all of the shares that each selling
stockholder currently beneficially owns, the number of shares each of them may
offer and the number of shares each of them will own after the offering,
assuming they sell all of the shares and that they acquire no additional shares
before the completion of this offering. Their percentage ownership in Forrester,
as of May 16, 2000, is shown in parentheses next to the number of shares. If no
percentage is indicated for a selling stockholder in the table below, that
stockholder's percentage ownership is less than one percent. Each of the selling
stockholders is subject to restrictions on the transfer of shares held by him
imposed by federal securities laws and by agreements made in connection with the
acquisition of Fletcher Research Limited. Specifically, the selling stockholders
have agreed not to transfer or otherwise dispose of shares held by them if to do
so would jeopardize our ability to account for the acquisition of Fletcher
Research Limited as a pooling transaction.
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<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY
SELLING AND OWNERSHIP PERCENTAGE SHARES BEING OWNED AND OWNERSHIP
STOCKHOLDER PRIOR TO OFFERING OFFERED PERCENTAGE AFTER OFFERING
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<S> <C> <C> <C>
William Reeve 331,704 (1.60%) 30,426 301,278 (1.45%)
Neil Bradford 321,704 (1.55%) 20,426 301,278 (1.45%)
</TABLE>
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling stockholders.
"Selling stockholders" as used in this prospectus, includes donees and pledgees
selling shares received from a named selling stockholder after the date of this
prospectus. The selling stockholders may offer their shares of Forrester common
stock at various times in one or more of the following transactions:
- in the over-the-counter market;
- in private transactions other than in the over-the-counter
market;
- in connection with short sales of the shares of Forrester common
stock;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over- the-counter options; or
- in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices.
The selling stockholders may use broker-dealers to sell their shares.
If this happens, broker- dealers will either receive discounts or commissions
from the selling stockholders, or they will receive commissions from purchasers
of shares for whom they acted as agents.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act of
1933, as amended (the "Securities Act"), provided they meet the criteria and
conform to the requirements of that Rule.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's Website at
"http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and the information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
1. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999 as filed with the SEC on March 10, 2000;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000 as filed with the SEC on May 12, 2000; and
3. Our Registration Statement on Form 8-A as filed with the SEC on
September 15, 1996, including any amendment or report filed for
the purpose of updating such description.
Fletcher Research Limited is not a "significant subsidiary" for
purposes of Regulation S-X and, as such, financial statements covering its
operations are not provided. In addition, although we plan to use the pooling
method of accounting for the acquisition of Fletcher Research Limited, we will
not restate our financial statements because the acquisition is not material to
our historical financial statements.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Forrester Research, Inc.
400 Technology Square
Cambridge, Massachusetts 02139
Attention: General Counsel
(617) 497-7090
This prospectus is part of a registration statement that we have filed
with the SEC. You should rely only on the information or representations
provided in this prospectus. We have not authorized nor have any of the selling
stockholders authorized anyone to provide you with different information. The
selling stockholders are not making an offer of these securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front of
the document.
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VALIDITY OF SHARES
For the purpose of this offering, Ropes & Gray, Boston, Massachusetts,
is giving its opinion on the validity of the shares being offered.
EXPERTS
The audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein upon the authority of said
Firm as experts in giving said reports.
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