SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): May 3, 1999
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META GROUP, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 0-27280 06-0971675
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(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
208 Harbor Drive, Stamford, CT 06912
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (203) 973-6700
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No change since last report
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(Former name or address, if changed since last report)
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Item 5. Other Events
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On May 3, 1999, the Registrant announced (i) the results for the fiscal
quarter ended March 31, 1999 and (ii) an authorization to expand the Company's
stock repurchase program to a total of 2.4 million shares of its Common Stock
from 1.2 million shares previously authorized on April 14, 1999, as more fully
described in Registrant's press release dated May 3, 1999 incorporated herein by
reference (and attached hereto as Exhibit 99.1).
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
99.1 Press release dated May 3, 1999.
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SIGNATURE
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.
META GROUP, INC.
By: /s/ Dale Kutnick
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Dale Kutnick
President, Co-Research Director, Chief
Executive Officer and Chairman of the
Board of Directors
Dated: May 4, 1999
META Group
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META Group, Inc., 208 Harbor Drive, P.O. Box 120061, Stamford, CT 06912-0061
(203) 973-6700 Fax: (203) 359-8066
News Release
FOR IMMEDIATE RELEASE Contact: Bernard F. Denoyer
Investor Relations/CFO
(203) 973-6813
[email protected]
Alison Ziegler
The Financial Relations Board, Inc.
(212) 661-8030
META GROUP REPORTS FIRST-QUARTER RESULTS
AND EXPANDS SHARE REPURCHASE PROGRAM
Stamford, CT - May 3, 1999 - META Group, Inc. (Nasdaq: METG) today announced
results for the first quarter ended March 31, 1999.
For the first quarter of 1999, total revenues rose 33% to $20.1 million
from $15.1 million in the first quarter of 1998. Continuous Advisory Services
revenues increased 20% to $15.8 million, versus $13.2 million in the first
quarter of 1998. Published Research revenues increased 61% to $1.4 million,
versus $0.9 million in the first quarter of 1998. Project Consulting revenues
increased 167% to $2.9 million, versus $1.1 million in the first quarter of
1998. Operating income for the first quarter of 1999 decreased 34% to $1.4
million, or 7.2% of total revenues, versus $2.2 million, or 14.5% of total
revenues, reported in the same period last year. First- quarter 1999 net income
decreased 21% to $1.3 million from $1.6 million in the first quarter of 1998.
Diluted earnings per share decreased 23% to $0.10 per share in the first
quarter, versus $0.13 in the first quarter of 1998.
Contract Value on March 31, 1999, was $68.9 million, representing a 23%
increase over $56.3 million on March 31, 1998. The Company defines Contract
Value as the aggregate annualized value of renewable revenues recognized from
all contracts in effect at a given point in time, without regard to the duration
of the contracts outstanding at such time.
Dale Kutnick, president, chief executive officer, and co-research director,
noted, "The shortfall in the quarter was primarily caused by unexpected
transitional issues connected with the recent Sentry Group acquisition and some
publishing delays. Continuous Advisory Services revenue growth was also lower
than expected, while at the same time the Company continued to invest
aggressively in its domestic sales organization and new product development.
Continuous Advisory Services billings, however, showed encouraging strength late
in the quarter, and we remain confident in our expanded sales team's ability to
sustain high top line growth for the year, by positioning our broadened product
line across our clients' entire decision-making life-cycle."
- More -
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META Group, Inc.
May 3, 1999
Page 2
Expansion of Repurchase Program
META Group today announced that its Board of Directors has unanimously
authorized the expansion of the Company's repurchase program to a total of 2.4
million shares. As previously announced on April 14, 1999, META Group's Board of
Directors unanimously authorized the repurchase of up to 1.2 million shares of
its Common Stock. Bernard Denoyer, senior vice president and CFO, commented,
"Through April 27, 1999, we repurchased approximately 850,000 shares at an
average price of $9.60 per share, and we will continue to actively buy back
shares as we believe this program provides significant shareholder value." As of
April 29, 1999, the Company had 11,180,000 shares outstanding.
Effective January 1, 1999, the Company decided to present its revenues on
the face of its income statement in a manner consistent with the way the Company
manages its operations, and consistent with the direction of Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company's three operating segments are:
Continuous Advisory Services, Published Research, and Project Consulting. This
three-step breakdown of revenues was previously disclosed for the three years
ended December 31, 1998 in the footnotes to the Company's 1998 consolidated
financial statements, and will be reported on the Company's quarterly
consolidated statements of operations for 1999. All prior period revenues have
been reclassified to conform to the 1999 presentation.
META Group helps companies make better information technology (IT)
decisions by providing research and unlimited analyst consultation relevant to
their specific business needs. Offering advisory services,
consulting/benchmarking, and publications that span the full spectrum of IT,
META Group addresses the latest technologies, industry trends, and business
challenges. With approximately 1,800 client companies worldwide, META Group
differentiates itself from other information providers through its commitment to
highly personal service (enabling "analysis in context"), bottom-line answers,
and objectivity. To support this promise, META Group maintains a
client-to-analyst ratio of 50:1 - the lowest in the industry - and reinvests
almost 50% of its revenue back into research and client services. For details,
connect with www.metagroup.com.
Statements above that are not historical facts may be considered
forward-looking statements that involve risks and uncertainties, including
statements regarding the sustainability of our differentiated continuous
research and advisory services. Actual results could differ materially as a
result of various factors, including the level and timing of subscription
renewals to Continuous Advisory Services; the level and timing of contracted
Project Consulting services; the timing and amount of business generated by the
Company; the integration of acquired businesses into the operations of the
Company (particularly the acquisition of The Sentry Group, Inc.); the timing of
the delivery of Published Research sold by the Company; the mix of domestic
versus international business; the timing of the development, introduction,
marketing, and market acceptance of new products and services; the timing of the
hiring of research analysts and consultants; changes in the spending patterns of
the Company's target clients; changes in the market demand for IT research and
analysis and competitive conditions in the industry; and other risks and
uncertainties detailed from time to time in the Company's filings with the
Securities and Exchange Commission.
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META Group, Inc.
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OPERATING RESULTS Quarter Ended March 31,
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(in thousands, except per share) 1999 1998 % Change
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<S> <C> <C> <C>
Revenues
Continuous Advisory Services $15,808 $13,179 20%
Published Research 1,427 887 61%
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Total renewable revenues 17,235 14,066 23%
Project Consulting 2,870 1,076 167%
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Total revenues 20,105 15,142 33%
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Operating Expenses
Cost of services and fulfillment 11,286 7,538 50%
Selling and marketing 4,982 3,446 45%
General and administrative 1,793 1,520 18%
Depreciation and amortization 593 447 33%
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Total operating expenses 18,654 12,951 44%
Operating income 1,451 2,191 -34%
Interest income 772 605 28%
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Income before provision for income taxes 2,223 2,796 -20%
Provision for income taxes 914 1,148 -20%
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Net income $1,309 $1,648 -21%
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Net income per diluted common share $0.10 $0.13 -23%
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Net income per basic common share $0.11 $0.15 -25%
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Weighted average diluted shares outstanding 12,905 12,299 5%
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Weighted average basic shares outstanding 11,830 11,162 6%
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SELECTED STATISTICAL DATA
(Dollars in thousands)
Contract Value $68,940 $56,260 23%
Client Organizations 1,800 1,475 22%
Client Subscribers 4,200 3,500 20%
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BALANCE SHEET DATA March 31, December 31,
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(in thousands) 1999 1998
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Assets
Cash, cash equivalents and marketable securities $32,050 $30,976
Accounts receivable 31,066 35,306
Deferred tax asset 3,808 3,808
Other current assets 7,124 4,330
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Total current assets 74,048 74,420
Marketable securities 11,996 15,850
Furniture and equipment 5,738 4,553
Goodwill 5,675 5,528
Deferred tax asset 256 792
Other assets 12,053 11,044
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Total assets $109,766 $112,187
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Liabilities and Stockholders' Equity
Deferred Revenues $33,824 $31,276
Other current liabilities 1,221 8,221
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Total liabilities 35,045 39,497
Total stockholders' equity 74,721 72,690
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Total liabilities and stockholders' equity $109,766 $112,187
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