Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 11-K

[x]       ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

[_]       TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to __________

Commission file number 001-15169

A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below:

The Perficient, Inc. 401(k) Employee Savings Plan

B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office:

Perficient, Inc.
555 Maryville University Drive, Suite 600
Saint Louis, Missouri 63141
 
 





 
The Perficient, Inc. 401(k) Employee Savings Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2017 and 2016
 
Table of Contents
 
Report of Independent Registered Public Accounting Firm
 
 
1
 
 
 
 
 
 
Financial Statements
 
 
 
 
 
 
 
 
 
Statements of Net Assets Available for Benefits
 
 
2
 
Statement of Changes in Net Assets Available for Benefits
 
 
3
 
Notes to Financial Statements
 
 
4-8
 
 
 
 
 
 
Supplemental Schedule*
 
 
 
 
 
 
 
 
 
Schedule of Assets (Held at End of Year)
 
 
9
 
 
 
 
 
 
Signatures
 
 
10
 
 
 
 
 
 
Exhibit Index
 
 
11
 
 
 
 
 
 
 
* Other schedules required by 29 C.F.R. § 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
  
 
 
 





Report of Independent Registered Public Accounting Firm

 
 
To Administrative Committee and Administrator of
The Perficient, Inc. 401(k) Employee Savings Plan

We have audited the accompanying statements of net assets available for benefits of The Perficient, Inc. 401(k) Employee Savings Plan (the “Plan”) as of December 31, 2017 and 2016, and the related statement of changes in net assets available for benefits for the year ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2017 and 2016, and the changes in net assets available for benefits for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental Information

The schedule of assets (held at end of year) as of December 31, 2017, has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ Brown Smith Wallace, LLP

We have served as the Plan’s auditor since 2010.

St. Louis, Missouri
June 14, 2018

1




The Perficient, Inc. 401(k) Employee Savings Plan
Statements of Net Assets Available for Benefits
As of December 31, 2017 and 2016
(in thousands)
 
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Investments at fair value (Note 3)
 
$
164,398
 
 
$
130,784
 
Receivables:
 
 
 
 
 
 
 
 
   Notes receivable from participants
 
 
1,259
 
 
 
1,424
 
   Participant and employer contributions
 
 
2
 
 
 
1
 
      Total receivables
 
 
1,261
 
 
 
1,425
 
Net assets available for benefits
 
$
165,659
 
 
$
132,209
 

The accompanying notes are an integral part of these financial statements.
   

2




 
 

The Perficient, Inc. 401(k) Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2017
(in thousands)
 

Additions to net assets attributed to:
 
 
 
 
   Contributions:
 
 
 
 
     Participant
 
$
16,491
 
     Employer
 
 
4,583
 
     Rollover
 
 
5,239
 
   Total contributions
 
 
26,313
 
 
 
 
 
 
   Net appreciation in fair value of investments
 
 
19,765
 
   Interest and dividend investment income
 
 
2,547
 
   Interest – notes receivable from participants
 
 
68
 
   Total investment income
 
 
22,380
 
 
 
 
 
 
Deductions from net assets attributed to:
 
 
 
 
   Benefits paid to participants
 
 
15,033
 
   Administrative expenses
 
 
254
 
   Total deductions
 
 
15,287
 
 
 
 
 
 
Net increase
 
 
33,406
 
Loan transfers from other plans
 
 
44
 
 
 
 
 
 
Net assets available for benefits at beginning of year
 
 
132,209
 
 
 
 
 
 
Net assets available for benefits at end of year
 
$
165,659
 

The accompanying notes are an integral part of these financial statements.
   
  

3




The Perficient, Inc. 401(k) Employee Savings Plan
Notes to Financial Statements
 
1.
Description of Plan
 
The following description of The Perficient, Inc. 401(k) Employee Savings Plan (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan Document for a more complete description of the Plan’s provisions.
 
General
 
The Plan is a defined contribution plan covering all full-time United States employees of Perficient, Inc. (the “Company”) who are age 21 or older, except any employee that is a non-resident alien with no U.S. source income. Employees may participate in the Plan on the first day of the month on or after they are determined to meet these conditions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The Company’s current record keeper is Transamerica Retirement Services (“Transamerica”), which is a part of the Aegon group.

Contributions
 
For 2017, participants could contribute from a percentage of their pre-tax or post-tax annual compensation to any of the investment funds up to a maximum of $18,000 (actual dollars), subject to the Internal Revenue Code of 1986, as amended (the “Code”). Participants who had attained age 50 before the end of the year were eligible to make catch-up contributions of an additional $6,000 (actual dollars). Participants could also contribute amounts representing distributions from other qualified defined benefit or contribution plans.
 
The Company made matching contributions of 50% (25% in cash and 25% in Company common stock) of the first 6% of eligible compensation deferred by the participant. The Company made matching contributions of $2.3 million in Company common stock during 2017.
 
Participant Accounts
 
Each participant’s account is credited with the participant’s contribution, the Company’s matching contribution, and an allocation of the Plan earnings and administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
 
Vesting
 
Participants are vested immediately in their contributions plus actual earnings thereon. The Company contributions plus earnings thereon vest based on years of service as follows: 

 
Years of Service
Non-forfeitable
Percentage
Less than 1
0
1
33
2
66
3 or more
100
 
Notes Receivable from Participants
 
Upon written application of a participant, the Plan may make a loan to the participant. Participants may borrow no less than $1,000 and no greater than the lesser of (i) 50% of the participant’s vested account balance, or (ii) $50,000. The loans are secured by the balance in the participant’s account and bear interest at a rate commensurate with local rates for similar plans. Loans are amortized over a maximum of 60 months. Repayment is made through payroll deductions.
 
Payment of Benefits
 
Participants are entitled to receive benefit payments at the normal retirement age of 59½, participant’s death or disability, in the event of termination, or if the participant reaches age 70½ while still employed. Benefits may be paid in a lump-sum distribution or installment payments.

4



Forfeitures
 
As of December 31, 2017 and 2016, all forfeitures were utilized to offset employer contributions, in accordance with the Plan provisions. During the year ended December 31, 2017, employer contributions were reduced by forfeitures of $0.3 million, which included account balances forfeited during the year. There were no unallocated forfeitures at December 31, 2017.
 
Participant-Directed Investments
 
All assets of the Plan are participant-directed investments. Participants have the option of directing their account balance to one or more different investment options. The investment options include various mutual funds, collective trusts and Company common stock. See Note 3 for additional quantitative disclosures.
 
2.
Summary of Significant Accounting Policies
 
Basis of Accounting
 
The financial statements of the Plan have been prepared on the accrual basis of accounting.

Use of Estimates
 
The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
Investment Valuation and Income Recognition
 
The Plan’s investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan’s administrative committee determines the Plan’s valuation policies utilizing information provided by the investment advisors and custodians. See Note 3 for discussion of fair value measurement.
 
Purchases and sales of investments and realized gains and losses are accounted for on the trade date. Interest income is recorded as earned and dividend income is recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Notes Receivable from Participants

Participant loans are measured at the unpaid principal balance plus any accrued but unpaid interest. Related fees are recorded as administrative expenses and are expensed when they are incurred.
 
Payment of Benefits
 
Benefits are recorded when paid.
 
Expenses
 
Certain operating expenses of maintaining the Plan are paid by the Company. Expenses that are paid by the Company are excluded from these financial statements. Administrative expenses for participant-directed transactions and record-keeping fees are paid by the Plan. Investment related expenses are included in net appreciation of fair value of investments.
 
3.
Fair Value Measurements
 
Accounting standards provide the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:

5




Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2017 and 2016.

Cash and temporary investments
 
The carrying value of cash equivalents approximates fair value as maturities are less than three months and measured at fair value using observable inputs in an active market and therefore are classified as Level 1.

Mutual Funds
 
Mutual funds available for investment in the Plan are valued at quoted prices available in an active market and are classified within Level 1 of the valuation hierarchy.

Collective Trusts

The Plan’s investment options are valued at the net asset value of the units of the individual collective trust. The net asset value (“NAV”), as provided by the trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. The Plan’s collective trust investments may be redeemed on a daily basis. The Plan’s stable value fund has a twelve month redemption notice period. Irrespective of the underlying securities that comprise these collective funds, the funds themselves lack a formal listed market or publicly available quotes.

Common Stock
 
Company common stock is valued at the closing price reported on the Nasdaq Global Select Market and is classified within Level 1 of the valuation hierarchy.
 
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
 
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value (in thousands):

 
 
As of December 31, 2017
 
 
 
Quoted Prices in Active Markets for Identical Assets
 (Level 1)
 
 
Significant Observable Inputs
(Level 2)
 
 
Significant Unobservable Inputs
(Level 3)
 
 
Total Fair Value
 
Mutual funds
 
$
66,584
 
 
 
--
 
 
 
--
 
 
$
66,584
 
Company common stock
 
 
14,495
 
 
 
--
 
 
 
--
 
 
 
14,495
 
Cash held by Plan
 
 
3
 
 
 
--
 
 
 
--
 
 
 
3
 
  Total assets in the fair value hierarchy
 
$
81,082
 
 
 
--
 
 
 
--
 
 
 
81,082
 
Investments measured at net asset value (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,316
 
Investments at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
$
164,398
 






6





 
 
As of December 31, 2016
 
 
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
 
Significant Observable Inputs
(Level 2)
 
 
Significant Unobservable Inputs
(Level 3)
 
 
Total Fair Value
 
Mutual funds
 
$
52,764
 
 
 
--
 
 
 
--
 
 
$
52,764
 
Company common stock
 
 
12,569
 
 
 
--
 
 
 
--
 
 
 
12,569
 
Cash held by Plan
 
 
2
 
 
 
--
 
 
 
--
 
 
 
2
 
  Total assets in the fair value hierarchy
 
$
65,335
 
 
 
--
 
 
 
--
 
 
 
65,335
 
Investments measured at net asset value (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,449
 
Investments at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
$
130,784
 

(a) In accordance with Accounting Standards Codification Subtopic 820-10, Fair Value Measurements and Disclosures – Overall, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Statement of Net Assets Available for Benefits.

Gains and losses (realized and unrealized) included in changes in net assets for the periods above are reported in net appreciation in fair value of investments in the Statement of Changes in Net Assets Available for Benefits.

Investments Measured at Fair Value Using Net Asset Value per Share
              
The following table summarizes investments valued at fair value (in thousands) based on net asset value per unit as of December 31, 2017 and 2016:
 
Fair Value
Unfunded Commitments
Redemption Frequency
Redemption Notice Period
Investment Name
2017
2016
IR&M Core Bond Collective Fund
$
4,155

$  4,486

-
Daily
None
Retirement Advocate Aggressive Fund
-

518

-
Daily
None
Retirement Advocate Conservative Fund
-

1,617

-
Daily
None
Retirement Advocate Moderate Fund
-

1,722

-
Daily
None
Retirement Advocate Moderately Aggressive Fund
-

334

-
Daily
None
Retirement Advocate Moderately Conservative Fund
-

164

-
Daily
None
Schwab Indexed Retirement 2010 I
305

244

-
Daily
None
Schwab Indexed Retirement 2015 I
822

400

-
Daily
None
Schwab Indexed Retirement 2020 I
3,658

2,452

-
Daily
None
Schwab Indexed Retirement 2025 I
4,793

3,330

-
Daily
None
Schwab Indexed Retirement 2030 I
14,159

9,887

-
Daily
None
Schwab Indexed Retirement 2035 I
9,063

6,803

-
Daily
None
Schwab Indexed Retirement 2040 I
15,517

11,688

-
Daily
None
Schwab Indexed Retirement 2045 I
10,591

6,895

-
Daily
None
Schwab Indexed Retirement 2050 I
9,084

5,808

-
Daily
None
Schwab Indexed Retirement 2055 I
3,003

1,384

-
Daily
None
Schwab Indexed Retirement 2060 I
615

49

-
Daily
None
State Street U.S. Inflation Protected Bond Index NL
20

-

-
Daily
None
Stabled Pooled-Investment Class
7,531

-

-
Daily
None
Wells Fargo Stable Value Fund C
-

7,668

-
Daily
12 months
   Total
$
83,316

$
65,449

 
 
 


7




4.
Related Party Transactions
  
During the year ended December 31, 2017, the Plan had the following transactions involving Company common stock (in thousands, except share information):

Shares purchased
 
128,059
 
Shares sold
 
 
85,780
 
Cost of shares purchased
 
$
2,330
 
Cost of shares sold
 
$
1,298
 
Net gain from shares sold
 
$
275
 
 
5.
Plan Termination
 
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their employer contributions.

6.
Income Tax Status
 
The Plan administrator has concluded that as of December 31, 2017, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions.
 
The Internal Revenue Service has determined and informed the Company by an opinion letter dated March 31, 2014, that the Plan is established in accordance with applicable sections of the Code, and therefore, the Plan qualifies as tax-exempt under Section 401(a) of the Code. Although the Plan has been amended since receiving the opinion letter, the Plan administrator believes that the Plan is designed and operating in compliance with applicable Code requirements and, therefore, believes the Plan is qualified, and the related trust is tax-exempt.
 
7.
Risks and Uncertainties
 
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.















8




Supplemental Schedule
The Perficient, Inc. 401(k) Employee Savings Plan
FEIN: 74-2853258; Plan No. 001
Schedule of Assets (Held at End of Year)
December 31, 2017 
Form 5500, Schedule H, Part IV, Line 4(i)
(a)
(b)
Identity of Issuer
(c)
Description
(d)
Cost
(e)
Current Value
 
 
 
 
 
(in thousands)
 
*
State Street Bank & Trust Co.
Cash reserve account
**
$
3
 
 
American Beacon Small Cap Value Instl
Mutual fund
**
2,860
 
 
American Funds:
 
 
 
 
 
 
EuroPacific Growth R6
Mutual fund
**
 
7,293
 
 
Growth Fund of America R6
Mutual fund
**
 
8,925
 
 
BlackRock Developed Real Estate Index Instl
Mutual fund
**
 
1,397
 
 
Dodge and Cox Income
Mutual fund
**
 
6,224
 
 
Harding Loevner Instl Emerging Markets
Mutual fund
**
 
1,326
 
 
ING Voya Global Real Estate I
Mutual fund
**
 
-
 
 
JPMorgan Mid Cap Value Instl
Mutual fund
**
 
4,084
 
 
Oakmark International Small Cap I
Mutual fund
**
 
818
 
 
Prudential Jennison Mid Cap Growth Q
Mutual fund
**
 
1,759
 
 
Vanguard:
 
 
 
 
 
 
Institutional Index I
Mutual fund
**
 
16,627
 
 
Mid Cap Index Admiral
Mutual fund
**
 
7,734
 
 
Small Cap Index Admiral
Mutual fund
**
 
7,337
 
 
Total International Stock Index Admiral
Mutual fund
**
 
200
 
 
Total mutual funds
 
 
 
66,584
 
 
IR&M Core Bond Collective Fund
Collective trust
**
 
4,155
 
 
Schwab:
 
 
 
 
 
 
Indexed Retirement 2010 I
Collective trust
**
 
305
 
 
Indexed Retirement 2015 I
Collective trust
**
 
822
 
 
Indexed Retirement 2020 I
Collective trust
**
 
3,658
 
 
Indexed Retirement 2025 I
Collective trust
**
 
4,793
 
 
Indexed Retirement 2030 I
Collective trust
**
 
14,159
 
 
Indexed Retirement 2035 I
Collective trust
**
 
9,063
 
 
Indexed Retirement 2040 I
Collective trust
**
 
15,517
 
 
Indexed Retirement 2045 I
Collective trust
**
 
10,591
 
 
Indexed Retirement 2050 I
Collective trust
**
 
9,084
 
 
Indexed Retirement 2055 I
Collective trust
**
 
3,003
 
 
Indexed Retirement 2060 I
Collective trust
**
 
615
 
 
State Street U.S. Inflation Protected Bond Index NL
Collective trust
**
 
20
 
 
Transamerica Stable Pooled Fund-Investment Class
Collective trust
**
 
7,531
 
 
            Total collective trusts
 
 
 
83,316
 
*
Perficient, Inc.
Employer securities
**
 
14,495
 
*
Notes receivable from participants
Interest rate of 3.25 – 8.25%
 
 
 
 
 
 
maturing through November, 2022
-
 
1,259
 
 
Total
 
 
$
165,657
 
  * Party-in-interest transaction considered exempt by the Department of Labor.
** Cost omitted for participant-directed investments.

9




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
 
                                                         
 
 
 
The Perficient, Inc. 401(k) Employee Savings Plan
 
 
 
 
 
 
 
 
 Date:  June 14, 2018
 
/s/ Paul E. Martin
 
 
 
 Paul E. Martin
 
 
 
 Chief Financial Officer
 
 
  


10




EXHIBITS INDEX
 
Exhibit Number
 
 
Description
23.1
 
Consent of Brown Smith Wallace, LLP
 
 
 



11