UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 7, 2017
___________________________
GARTNER, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 1-14443 | 04-3099750 | ||
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
P.O. Box 10212
56 Top Gallant Road
Stamford, CT 06902-7700
(Address of Principal Executive Offices, including Zip Code)
(203) 316-1111
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.45 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark 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. o
| ITEM 7.01. | REGULATION FD DISCLOSURE. |
On August 7, 2017, Gartner, Inc. (the “Company”) made available on its website at www.gartner.com the information furnished as Exhibit 99.1 to this Current Report on Form 8-K, which sets forth recast reportable business segment results for the four quarters of 2016 and the first quarter of 2017, for each of the Company and CEB Inc. (“CEB”), as well as combined company information showing the combined results of the entities during those periods, which occurred prior to the Company’s acquisition of CEB on April 5, 2017.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
| (d) | Exhibits |
| EXHIBIT NO. | DESCRIPTION | |
|
99.1
|
Recast Reportable Segments and Combined Company Results, dated August 7, 2017 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Gartner, Inc. | ||
| Date: August 7, 2017 | By: | /s/ Craig W. Safian |
|
Craig W. Safian Senior Vice President, Chief Financial Officer | ||
EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION | |
|
99.1
|
Recast Reportable Segments and Combined Company Results, dated August 7, 2017 | |
Exhibit 99.1
In order to provide a basis for comparability to historical data, Gartner, Inc. (“Gartner”, “we” or us”) is today providing recast reportable business segment results for the four quarters of 2016 as well as the first quarter of 2017, for each of Gartner and CEB Inc. (“CEB”), as well as combined company information showing the combined results of Gartner and CEB during those periods, which occurred prior to Gartner’s acquisition of CEB on April 5, 2017.
Following our acquisition of CEB, Gartner is reporting the results of four business segments, which are defined as follows:
| · | Research – includes the results of our previous Gartner Research segment and the results of CEB’s core subscription-based best practice and decision support research activities. In addition, Research now includes our Strategic Advisory Services (“SAS”) business, which was previously included in the Consulting segment. |
| · | Consulting - includes our previous Gartner Consulting segment except, as noted above, the results of our SAS business are now included in the Research segment. |
| · | Events - includes the results of our previous Gartner Events segment and the results of CEB’s former Evanta business and destination event activities. |
| · | Talent Assessment & Other – this is a new segment for Gartner and it includes CEB’s previously disclosed Talent Assessment business as well as certain CEB non-subscription based talent products and services. |
The information set forth below recasts certain historical GAAP and non-GAAP operating results for each of Gartner and CEB on the basis of these four segments during the four quarters of 2016 as well as the first quarter of 2017. In addition, the information set forth below includes “Combined Company” numbers, which are the sum of the results of Gartner and CEB for each line item during each period, notwithstanding the fact that the acquisition was not completed until after those periods.
The calculation of Combined Company numbers excludes certain adjustments with respect to presentation of pro forma financial information required under U.S. GAAP and the rules and regulations of the SEC. Accordingly, the Combined Company numbers are non-GAAP. We believe Combined Company numbers are useful in comparing our performance following the CEB acquisition with our and CEB’s independent performances prior to our acquisition of CEB. The Combined Company numbers should be read together with our and CEB’s historical financial statements included in our and their respective quarterly reports on Form 10-Q and annual reports on Form 10-K, and the pro forma financial statements included in Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on April 6, 2017 and footnote 5 to our Current Report on Form 10-Q for the period ending June 30, 2017.
-more-
Adjusted Historical Recast Segments
| GAAP Revenue | Deferred
Revenue Fair Value Adjustment |
Adjusted Revenue | GAAP Direct Expense | Adjusted Gross Contribution | Adjusted Contribution Margin |
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Gartner | CEB | Gartner | CEB | Gartner | CEB | Combined Company |
Gartner | CEB (1) | Combined Company |
Gartner | CEB | Combined Company |
Combined Company |
|||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended 03/31/17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research | $ | 511,306 | $ | 144,233 | $ | 143 | $ | — | $ | 511,449 | $ | 144,233 | $ | 655,682 | $ | 160,192 | $ | 41,800 | $ | 201,992 | $ | 351,257 | $ | 102,433 | $ | 453,690 | 69 | % | ||||||||||||||||||||||||||||
| Consulting | 78,594 | — | — | — | 78,594 | — | 78,594 | 54,658 | — | 54,658 | 23,936 | — | 23,936 | 30 | % | |||||||||||||||||||||||||||||||||||||||||
| Events | 35,269 | 1,180 | — | 60 | 35,269 | 1,240 | 36,509 | 21,702 | 3,320 | 25,022 | 13,567 | (2,080 | ) | 11,487 | 31 | % | ||||||||||||||||||||||||||||||||||||||||
| Talent Assessment & Other | — | 68,837 | — | — | — | 68,837 | 68,837 | — | 31,917 | 31,917 | — | 36,920 | 36,920 | 54 | % | |||||||||||||||||||||||||||||||||||||||||
| TOTAL | $ | 625,169 | $ | 214,250 | $ | 143 | $ | 60 | $ | 625,312 | $ | 214,310 | $ | 839,622 | $ | 236,552 | $ | 77,037 | $ | 313,589 | $ | 388,760 | $ | 137,273 | $ | 526,033 | 63 | % | ||||||||||||||||||||||||||||
| Three Months Ended 12/31/16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research | $ | 485,844 | $ | 155,391 | $ | 258 | $ | — | $ | 486,102 | $ | 155,391 | $ | 641,493 | $ | 154,509 | $ | 45,981 | $ | 200,490 | $ | 331,593 | $ | 109,410 | $ | 441,003 | 69 | % | ||||||||||||||||||||||||||||
| Consulting | 81,058 | — | — | — | 81,058 | $ | — | 81,058 | 62,433 | — | 62,433 | 18,625 | — | 18,625 | 23 | % | ||||||||||||||||||||||||||||||||||||||||
| Events | 136,315 | 20,865 | — | 2,653 | 136,315 | $ | 23,518 | 159,833 | 63,234 | 9,416 | 72,650 | 73,081 | 14,102 | 87,183 | 55 | % | ||||||||||||||||||||||||||||||||||||||||
| Talent Assessment & Other | — | 77,894 | — | — | — | $ | 77,894 | 77,894 | — | 32,042 | 32,042 | — | 45,852 | 45,852 | 59 | % | ||||||||||||||||||||||||||||||||||||||||
| TOTAL | $ | 703,217 | $ | 254,150 | $ | 258 | $ | 2,653 | $ | 703,475 | $ | 256,803 | $ | 960,278 | $ | 280,176 | $ | 87,439 | $ | 367,615 | $ | 423,299 | $ | 169,364 | $ | 592,663 | 62 | % | ||||||||||||||||||||||||||||
| Three Months Ended 09/30/16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research | $ | 466,877 | $ | 151,759 | $ | 429 | $ | — | $ | 467,306 | $ | 151,759 | $ | 619,065 | $ | 144,231 | $ | 42,429 | $ | 186,660 | $ | 323,075 | $ | 109,330 | $ | 432,405 | 70 | % | ||||||||||||||||||||||||||||
| Consulting | 73,707 | — | — | — | 73,707 | — | 73,707 | 55,492 | — | 55,492 | 18,215 | — | 18,215 | 25 | % | |||||||||||||||||||||||||||||||||||||||||
| Events | 33,475 | 1,644 | — | 1,106 | 33,475 | 2,750 | 36,225 | 18,946 | 4,446 | 23,392 | 14,529 | (1,696 | ) | 12,833 | 35 | % | ||||||||||||||||||||||||||||||||||||||||
| Talent Assessment & Other | — | 76,441 | — | — | — | 76,441 | 76,441 | — | 31,449 | 31,449 | — | 44,992 | 44,992 | 59 | % | |||||||||||||||||||||||||||||||||||||||||
| TOTAL | $ | 574,059 | $ | 229,844 | $ | 429 | $ | 1,106 | $ | 574,488 | $ | 230,950 | $ | 805,438 | $ | 218,669 | $ | 78,324 | $ | 296,993 | $ | 355,819 | $ | 152,626 | $ | 508,445 | 63 | % | ||||||||||||||||||||||||||||
| Three Months Ended 06/30/16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research | $ | 456,690 | $ | 152,221 | $ | — | $ | — | $ | 456,690 | $ | 152,221 | $ | 608,911 | $ | 138,069 | $ | 46,740 | $ | 184,809 | $ | 318,621 | $ | 105,481 | $ | 424,102 | 70 | % | ||||||||||||||||||||||||||||
| Consulting | 86,548 | — | — | — | 86,548 | — | 86,548 | 58,207 | — | 58,207 | 28,341 | — | 28,341 | 33 | % | |||||||||||||||||||||||||||||||||||||||||
| Events | 66,760 | 11,416 | — | 8,544 | 66,760 | 19,960 | 86,720 | 30,698 | 5,193 | 35,891 | 36,062 | 14,767 | 50,829 | 59 | % | |||||||||||||||||||||||||||||||||||||||||
| Talent Assessment & Other | — | 78,965 | — | — | — | 78,965 | 78,965 | — | 35,089 | 35,089 | — | 43,876 | 43,876 | 56 | % | |||||||||||||||||||||||||||||||||||||||||
| TOTAL | $ | 609,998 | $ | 242,602 | $ | — | $ | 8,544 | $ | 609,998 | $ | 251,146 | $ | 861,144 | $ | 226,974 | $ | 87,022 | $ | 313,996 | $ | 383,024 | $ | 164,124 | $ | 547,148 | 64 | % | ||||||||||||||||||||||||||||
| Three Months Ended 03/31/16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research | $ | 447,590 | $ | 149,673 | $ | — | $ | 774 | $ | 447,590 | $ | 150,447 | $ | 598,037 | $ | 134,581 | $ | 42,948 | $ | 177,529 | $ | 313,009 | $ | 107,499 | $ | 420,508 | 70 | % | ||||||||||||||||||||||||||||
| Consulting | 77,621 | — | — | — | 77,621 | — | 77,621 | 53,066 | — | 53,066 | 24,555 | — | 24,555 | 32 | % | |||||||||||||||||||||||||||||||||||||||||
| Events | 32,055 | 52 | — | — | 32,055 | 52 | 32,107 | 19,072 | 586 | 19,658 | 12,983 | (534 | ) | 12,449 | 39 | % | ||||||||||||||||||||||||||||||||||||||||
| Talent Assessment & Other | — | 73,473 | — | — | — | 73,473 | 73,473 | — | 32,660 | 32,660 | — | 40,813 | 40,813 | 56 | % | |||||||||||||||||||||||||||||||||||||||||
| TOTAL | $ | 557,266 | $ | 223,198 | $ | — | $ | 774 | $ | 557,266 | $ | 223,972 | $ | 781,238 | $ | 206,719 | $ | 76,194 | $ | 282,913 | $ | 350,547 | $ | 147,778 | $ | 498,325 | 64 | % | ||||||||||||||||||||||||||||
(1) - Certain items have been reclassified to conform to Gartner’s direct expense and segment presentation.
| Gartner, Inc. | page 2 |
Reconciliation of GAAP Operating income to Combined Adjusted EBITDA (a):
| Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 31-Mar-17 | 31-Dec-16 | 30-Sep-16 | 30-Jun-16 | 31-Mar-16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gartner | CEB | Combined Company | Gartner | CEB | Combined Company | Gartner | CEB | Combined Company | Gartner | CEB | Combined Company | Gartner | CEB | Combined Company | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 53,514 | $ | (10,537 | ) | $ | 42,977 | $ | 108,687 | $ | (41,429 | ) | $ | 67,258 | $ | 48,726 | $ | 17,562 | $ | 66,288 | $ | 83,299 | $ | 14,578 | $ | 97,877 | $ | 64,429 | $ | 16,125 | $ | 80,554 | ||||||||||||||||||||||||||||
| Adjustments: | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (b) | 22,576 | 5,238 | 27,814 | 10,533 | 5,706 | 16,239 | 9,520 | 4,893 | 14,413 | 11,112 | 5,006 | 16,118 | 15,495 | 4,218 | 19,713 | |||||||||||||||||||||||||||||||||||||||||||||
| Depreciation, accretion, and amortization (c) | 16,553 | 17,131 | 33,684 | 15,986 | 25,385 | 41,371 | 15,776 | 24,900 | 40,676 | 15,258 | 26,265 | 41,523 | 15,038 | 25,626 | 40,664 | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of pre-acquisition deferred revenues (d) | 143 | 60 | 203 | 258 | 2,653 | 2,911 | 429 | 1,106 | 1,535 | 8,544 | 8,544 | 774 | 774 | |||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition and integration charges and other nonrecurring items (e) | 13,272 | 4,243 | 17,515 | 9,641 | 1,735 | 11,376 | 16,556 | 840 | 17,396 | 8,033 | 3,662 | 11,695 | 8,368 | 1,457 | 9,825 | |||||||||||||||||||||||||||||||||||||||||||||
| Other charges (f) | 19,736 | 19,736 | 77,608 | 77,608 | 10,368 | 10,368 | 6,460 | 6,460 | 4,758 | 4,758 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 106,058 | $ | 35,871 | $ | 141,929 | $ | 145,105 | $ | 71,658 | $ | 216,763 | $ | 91,007 | $ | 59,669 | $ | 150,676 | $ | 117,702 | $ | 64,515 | $ | 182,217 | $ | 103,330 | $ | 52,958 | $ | 156,288 | ||||||||||||||||||||||||||||||
(a) Adjusted EBITDA is based on GAAP operating income adjusted for certain normalizing adjustments.
(b) Consists of charges for stock-based compensation awards.
(c) Includes depreciation expense, accretion on excess facilities accruals, and amortization of intangibles. The depreciation and amortization amounts do not include any fair value adjustments as a result of the acquisition.
(d) Consists of the amortization of non-cash fair value adjustments on pre-acquisition deferred revenues. The majority of the pre-acquisition deferred revenue is recognized ratably over the remaining period of the underlying revenue contract.
(e) Consists of incremental and directly-related charges related to acquisitions and other non-recurring items.
(f) Primarily consists of restructuring costs, real estate and business transformation costs, equity investment losses and non-operating foreign currency impact related to the acquired CEB business
| Gartner, Inc. | page 3 |