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

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 06902-7747
(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):

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 4, 2009, Gartner, Inc. (the “Company”) announced financial results for the three and six months ended June 30, 2009. A copy of the Company’s press release is furnished as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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		Press Release issued August 4, 2009 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2009.

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.

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
99.1		Press Release issued August 4, 2009 with respect to financial results for Gartner, Inc. for the three and six months ended June 30, 2009.

Exhibit 99.1

		Press Release

CONTACT:
Henry A. Diamond
Group Vice President
Investor Relations and Corporate Finance
+1 203 316 3399
henry.diamond@gartner.com

Gartner Reports Financial Results for Second Quarter 2009

EPS from Continuing Operations were $0.18

Company Reiterated Its 2009 Financial Outlook

STAMFORD, Conn., August 4, 2009 — Gartner, Inc. (NYSE: IT), the leading provider of research and analysis on the global information technology industry, today reported results for second quarter 2009. In addition, the Company reiterated its financial outlook for full year 2009.

EPS from continuing operations were $0.18, net income was $17.2 million, and Normalized EBITDA was $44.0 million. See “Non-GAAP Financial Measures” for a discussion of Normalized EBITDA.

Total revenue for second quarter 2009 was $270.0 million. Excluding the impact of foreign exchange, total revenue decreased 16% year-over-year, principally due to lower revenues from the Company’s Events and Consulting segments. Revenue from the Company’s Research segment declined 1% year-over-year, excluding the impact of foreign exchange.

Gene Hall, Gartner’s chief executive officer, commented, “During the second quarter of 2009, our businesses performed in-line with our expectations. More importantly, many of our key metrics showed sequential improvement. As compared to the first quarter, we increased new business in Research, added significantly more new client enterprises, improved salesforce productivity and saw improvement in the trends that drive wallet retention. These results reflect a stabilizing of the sales environment, the success of our initiatives to improve operational effectiveness and the tremendous value that we provide to IT professionals. Based on these trends, we expect contract value to grow sequentially in the second half of the year, primarily in the fourth quarter, and we expect to quickly resume revenue and earnings growth once global economic activity returns to more normal levels.”

Business Segment Highlights

Research

Revenue for second quarter 2009 was $183.9 million, down 1% year-over-year excluding the impact of foreign exchange. Gross contribution margin improved approximately 2 percentage points year-over-year to 65%.

Contract value was $736.0 million at June 30, 2009. Excluding the impact of foreign exchange, contract value decreased 3% year-over year.

-more-

Client and wallet retention rates for second quarter 2009 were 77% and 86%. Wallet retention excludes the impact of foreign exchange.

Consulting

As previously communicated, the Company entered 2009 and the second quarter with lower Consulting backlog. As a result, revenue for second quarter 2009 was $69.3 million, down 21% year-over-year excluding the impact of foreign exchange. Gross contribution margin was 40%.

Second quarter 2009 utilization was 68% and billable headcount was 459. Backlog was $81.7 million at June 30, 2009.

Events

As part of its previously announced plan to reduce the number of events in 2009 versus 2008, the Company held only 14 events in second quarter 2009 versus 25 in second quarter 2008. This included the elimination of two large Spring Symposium events. These changes negatively impacted year-over-year revenue comparisons for the quarter.

Revenue for the quarter was $16.7 million, down 61% year-over-year excluding the impact of foreign exchange. The 14 events held attracted 5,108 attendees. Gross contribution margin was 33%.

Cash Flow and Balance Sheet Highlights

Gartner generated cash from operations of $47.7 million during second quarter 2009. Capital expenditures were $3.9 million.

During the first half of 2009, the Company deployed its cash principally to repay almost $100 million in debt. As of June 30, 2009, the Company had total debt of $316.5 million and cash of $97.0 million.

Financial Outlook for 2009

Based on its first half 2009 results and current business trends, Gartner reiterated its financial outlook for full year 2009. The Company continues to project 2009 revenue by segment and total revenue as follows. The year-over-year change is presented both as reported and excluding the impact of foreign exchange (FX Neutral):

($ in millions)	2009 Projected Revenue							% Change as Reported							% Change FX Neutral
Research(1)		$	737	–	757				(6%)	–	(3	%)				(2%)	–	1	%
Consulting			265	–	295				(24%)	–	(15	%)				(21%)	–	(12	%)
Events			98	–	108				(35%)	–	(28	%)				(33%)	–	(26	%)
Total Revenue		$	1,100	–	1,160				(14%)	–	(9	%)				(10%)	–	(6	%)

Based on this revenue outlook, Gartner continues to target full year 2009 Normalized EBITDA of $170 to $200 million, EPS from continuing operations of $0.66 to $0.87, cash flow from operations of $100 to $125 million and capital expenditures of $15 to $20 million. Normalized EBITDA excludes a projected $26 to $28 million of pre-tax expense related to SFAS 123(R).

Gartner, Inc.		page 2

Conference Call Information

Gartner has scheduled a conference call at 10:00 a.m. ET today, Tuesday, August 4, 2009, to discuss the Company’s financial results. The conference call will be available via the Internet by accessing the Company’s web site at http://investor.gartner.com. A replay of the webcast will be available for 90 days following the call.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants, and clients in 80 countries. For more information, visit www.gartner.com.

Non-GAAP Financial Measures

Investors are cautioned that normalized EBITDA contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles. This non-GAAP financial measure is provided to enhance the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future. We believe normalized EBITDA is an important measure of our recurring operations as it excludes items that may not be indicative of our core operating results. Normalized EBITDA is based on operating income, excluding depreciation, accretion on obligations related to excess facilities, amortization, SFAS 123 (R) expense, and Other charges.

Safe Harbor Statement

Statements contained in this press release regarding the growth and prospects of the business, the Company’s projected 2009 financial results and all other statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to ability to expand or even retain the Company’s customer base; ability to grow or even sustain revenue from individual customers; ability to attract and retain professional staff of research analysts and consultants upon whom the Company is dependent; ability to achieve and effectively manage growth; ability to pay the Company’s debt obligations; ability to achieve continued customer renewals and achieve new contract value, backlog and deferred revenue growth in light of

Gartner, Inc.		page 3

competitive pressures; ability to carry out the Company’s strategic initiatives and manage associated costs; substantial competition from existing competitors and potential new competitors; additional risks associated with international operations including foreign currency fluctuations; the impact of restructuring and other charges on the Company’s businesses and operations; general economic conditions; and other risks listed from time to time in the Company’s reports filed with the Securities and Exchange Commission. These filings can be found on Gartner’s Web site at www.gartner.com/investors and the SEC’s Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

# # #

Gartner, Inc.		page 4

GARTNER, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

		Three Months Ended												Six Months Ended
		June 30,												June 30,
		2009				2008								2009				2008
Revenues:
Research (a)		$	183,919			$	198,362				-7	%		$	371,607			$	389,769				-5	%
Consulting			69,314				94,607				-27	%			139,633				172,725				-19	%
Events			16,738				50,970				-67	%			32,264				71,544				-55	%
Total revenues			269,971				343,939				-22	%			543,504				634,038				-14	%
Costs and expenses:
Cost of services and product development (a)			117,100				156,478				-25	%			233,744				287,079				-19	%
Selling, general and administrative (a)			115,367				133,421				-14	%			230,931				259,666				-11	%
Depreciation			6,338				6,064				5	%			12,813				12,573				2	%
Amortization of intangibles			405				401				1	%			804				815				-1	%
Total costs and expenses			239,210				296,364				-19	%			478,292				560,133				-15	%
Operating income			30,761				47,575				-35	%			65,212				73,905				-12	%
Interest expense, net			(4,011	)			(4,960	)			-19	%			(8,191	)			(9,675	)			-15	%
Other (expense) income, net			(1,132	)			(150	)			>100	%			(2,378	)			373				>100	%
Income before income taxes			25,618				42,465				-40	%			54,643				64,603				-15	%
Provision for income taxes			8,433				12,337				-32	%			17,462				19,882				-12	%
Income from continuing operations			17,185				30,128				-43	%			37,181				44,721				-17	%
(Loss) income from discontinued operations, net of taxes (b)			—				(228	)			-100	%			—				6,723				>100	%
Net income		$	17,185			$	29,900				-43	%		$	37,181			$	51,444				-28	%
Income per common share:
Basic:
Income from continuing operations		$	0.18			$	0.32				-44	%		$	0.39			$	0.46				-15	%
Income from discontinued operations			—				—				0	%			—				0.07				>100	%
Income per share		$	0.18			$	0.32				-44	%		$	0.39			$	0.53				-26	%
Diluted:
Income from continuing operations		$	0.18			$	0.30				-40	%		$	0.39			$	0.44				-11	%
Income from discontinued operations			—				—				0	%			—				0.07				>100	%
Income per share		$	0.18			$	0.30				-40	%		$	0.39			$	0.51				-24	%
Weighted average shares outstanding:
Basic			94,370				94,845				-1	%			94,134				96,317				-2	%
Diluted			96,523				98,895				-2	%			96,344				100,252				-4	%

BUSINESS SEGMENT DATA (a)
(Dollars in thousands)

						Direct				Gross				Contribution
		Revenue				Expense				Contribution				Margin
Three Months Ended 6/30/09
Research (a)		$	183,919			$	64,454			$	119,465				65	%
Consulting			69,314				41,678				27,636				40	%
Events			16,738				11,154				5,584				33	%
TOTAL		$	269,971			$	117,286			$	152,685				57	%
Three Months Ended 6/30/08
Research (a)		$	198,362			$	73,117			$	125,245				63	%
Consulting			94,607				54,072				40,535				43	%
Events			50,970				28,331				22,639				44	%
TOTAL		$	343,939			$	155,520			$	188,419				55	%
Six Months Ended 6/30/09
Research (a)		$	371,607			$	127,411			$	244,196				66	%
Consulting			139,633				84,977				54,656				39	%
Events			32,264				21,897				10,367				32	%
TOTAL		$	543,504			$	234,285			$	309,219				57	%
Six Months Ended 6/30/08
Research (a)		$	389,769			$	143,079			$	246,690				63	%
Consulting			172,725				100,853				71,872				42	%
Events (b)			71,544				39,926				31,618				44	%
TOTAL		$	634,038			$	283,858			$	350,180				55	%

SELECTED STATISTICAL DATA

		June 30,				June 30,
		2009				2008
Research contract value		$	735,974	(a)		$	794,153	(a)
Research client retention			77	%			81	%
Research wallet retention (b)			86	%			98	%
Research client organizations			9,882				10,207
Consulting backlog		$	81,727	(a)		$	111,300	(a)
Consulting—quarterly utilization			68	%			75	%
Consulting billable headcount			459				478
Consulting—average annualized revenue per billable headcount		$	398	(a)		$	489	(a)
Events—number of events for the quarter			14				25
Events—attendees for the quarter			5,108				13,873

SUPPLEMENTAL INFORMATION
GAAP to Normalized EBITDA Reconciliation
(in thousands)

Reconciliation — GAAP to Normalized EBITDA (1):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Net income		$	17,185			$	29,900			$	37,181			$	51,444
Interest expense, net			4,011				4,960				8,191				9,675
Other expense (income), net			1,132				150				2,378				(373	)
Loss (income) from discontinued operations (2)			—				228				—				(6,723	)
Tax provision			8,433				12,337				17,462				19,882
Operating income		$	30,761			$	47,575			$	65,212			$	73,905
Normalizing adjustments:
Depreciation, accretion, and amortization			6,922				6,706				13,994				13,883
SFAS No. 123(R) stock compensation expense (3)			6,333				6,424				13,125				13,056
Normalized EBITDA		$	44,016			$	60,705			$	92,331			$	100,844