<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 10549
FORM 10-Q
(x) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996 or
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number: 0-28432
Boston Communications Group, Inc.
---------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3026859
----------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
100 Sylvan Road, Woburn, Massachusetts 01801
--------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (617)692-7000
- -----------------------------------------------------------------
Former address - One McKinley Square, Boston, Massachusetts 02109
- -----------------------------------------------------------------
(Former name, former address, former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
As of August 1, 1996 the Company had outstanding 12,696,834 shares of common
stock, $.01 par value per share.
1
<PAGE>
INDEX
PAGE NUMBER
PART 1. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets.............................3
Consolidated Statements of Operations...................4
Consolidated Statements of Cash Flows...................5
Notes to Consolidated Financial Statements..............6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.....................8
Certain Factors That May Affect Future Results.........11
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K.......................14
2
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS December 31, June 30,
1995 1996
----------- -------
(unaudited)
<S> <C> <C>
Current assets:
Cash $ 253 $22,847
Accounts receivable, net of allowance for
billing adjustments and doubtful accounts
of $ 884 in 1995 and $1,264 in 1996 6,250 10,563
Deferred income taxes 1,800 1,275
Prepaid expenses and other assets 195 817
------- -------
Total current assets 8,498 35,502
Property and equipment, net 4,884 8,750
Goodwill, net - 2,499
Other assets 232 412
------- -------
Total assets $13,614 $47,163
======= =======
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,277 $ 1,344
Accrued expenses 4,429 6,135
Current portion of capital lease obligations - 457
Income taxes payable 710 310
------- -------
Total current liabilities 6,416 8,246
Capital lease obligations, net of current portion - 979
Redeemable Preferred Stock, nonvoting,
par value $100 per share, 13,000 shares
authorized, 11,871 and 0 shares issued and
outstanding in 1995 and 1996 15,896 -
Shareholders' deficit:
Convertible Preferred Stock, $1.00 par
value per share, 1,325 shares authorized,
850 shares in 1995 and 0 shares in 1996 issued
and outstanding 1 -
Common Stock, voting, par value $.01 per share,
35,000,000 shares authorized, 3,335,985 shares
in 1995 and 12,278,288 shares in 1996 issued
and outstanding 33 123
Additional paid-in capital 1,016 47,441
Accretion of dividend on redeemable preferred stock (4,025) -
Accumulated deficit (5,723) (9,626)
------- -------
Total shareholders' equity (deficit) (8,698) 37,938
------- -------
Total liabilities, redeemable preferred stock
and shareholders' equity $13,614 $47,163
======= =======
</TABLE>
3
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1996 1995 1996
--------------- -------- --------------- --------
<S> <C> <C> <C> <C>
Service revenues:
Calling service revenues $6,579 $ 8,327 $11,185 $15,541
Carrier support service revenues 1,934 3,303 3,246 7,150
Prepaid network services - 69 - 69
System revenues - 1,141 - 1,233
------ ------- ------- -------
8,513 12,840 14,431 23,993
Expenses:
Cost of service revenues 6,568 9,465 11,202 17,775
Cost of system revenues - 553 - 590
Engineering, research and development 168 744 267 1,163
Sales and marketing 475 638 873 1,196
Related party management fees 252 - 504 252
General and administrative 333 621 658 1,103
Depreciation and amortization 210 477 385 837
------ ------- ------- -------
Total operating expenses 8,006 12,498 13,889 22,916
------ ------- ------- -------
Operating income 507 342 542 1,077
Interest expense, net 35 75 51 81
------ ------- ------- -------
Income from continuing operations
before income taxes 472 267 491 996
Provision for income taxes 63 123 65 423
------ ------- ------- -------
Income from continuing operations 409 144 426 573
Discontinued operations:
Loss from operations - - (129) -
Loss on disposal - - (37) -
------ ------- ------- -------
Loss from discontinued operations - - (166) -
------ ------- ------- -------
Net income 409 144 260 573
Accretion of dividends on redeemable
preferred stock (237) (214) (474) (451)
------ ------- ------- -------
Net income (loss) available to common
shareholders $ 172 $ (70) $ (214) $ 122
====== ====== ====== ======
Net income (loss) available to common
shareholders per common share:
Continuing operations $ 0.02 $(0.01) $ 0.00 $ 0.01
====== ====== ====== ======
Net income (loss) $ 0.02 $(0.01) $(0.02) $ 0.01
====== ====== ====== ======
Shares used in computing net income
(loss) per common share 9,178 9,489 9,178 9,334
====== ====== ====== ======
</TABLE>
4
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
SIX MONTHS
ENDED JUNE 30,
1995 1996
---- ----
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C> <C>
Income from continuing operations $ 426 $ 573
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 385 838
Deferred income taxes - 525
Changes in operating assets and liabilities,
excluding effects of discounted operations:
Accounts receivable (1,942) (4,252)
Prepaid expenses and other assets (127) (830)
Accounts payable and accrued expenses 303 1,595
Income taxes payable (17) (400)
------- --------
(972) (1,951)
Loss from discontinued operations (166) -
Adjustments to reconcile loss from
discontinued operations:
Loss on disposal of discontinued operations 37 -
Cash flow related to results of operations
until disposal date 745 -
------- --------
616 -
------- --------
Net cash provided by (used in) operations (356) (1,951)
INVESTING ACTIVITIES
Acquisition of business, net of cash acquired - (497)
Investment in non-marketable securities - (110)
Purchase of property and equipment (1,396) (2,942)
Net proceeds from sale of lines of business 403 -
------- --------
Net cash used in investing
activities (993) (3,549)
FINANCING ACTIVITIES
Proceeds from exercise of stock options - 21
Proceeds from issuance of common stock - 44,490
Redemption of redeemable preferred stock - (16,347)
Repayment of capital leases - (70)
Proceeds from notes payable 1,400 -
------- --------
Net cash provided by financing activities 1,400 28,094
------- --------
Increase in cash 51 22,594
Cash at beginning of period 204 253
------- --------
Cash at end of period $ 255 $ 22,847
======= ========
Supplemental disclosure of noncash transactions:
Capital lease obligations $ - $ 1,507
======= ========
Shares issued in connection with acquisition of
business $ - $ 2,000
======= ========
</TABLE>
5
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
1. The accompanying consolidated financial statements have been prepared by
the Company, without audit, and reflect all adjustments which in the
opinion of management, are necessary for a fair statement of the results of
the interim periods presented. All adjustments were of a normal recurring
nature. Certain information and footnote disclosures normally included in
the annual consolidated financial statements which are prepared in
accordance with generally accepted accounting principals have been
condensed or omitted. Accordingly, the Company believes that although the
disclosures are adequate to make the information presented not misleading,
the consolidated financial statements should be read in conjunction with
the footnotes contained in the Company's Annual Report on the Company's
Form S-1 for the fiscal year ended December 31, 1995.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Standard No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," which establishes
criteria for the recognition and measurement of impairment of loss
associated with long-lived assets. The Company has adopted this standard in
the first quarter of 1996, and its adoption did not have a material impact
on the Company's financial position or results of operations.
The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) in accounting for
its stock-based compensation plans, rather than the alternative fair value
accounting method provided for its stock-based compensation plans, rather
than the alternative fair value accounting method provided for under
Financial Accounting Standards Board Statement No. 123, "Accounting for
Stock-Based Compensation," as this alternative requires the use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, since the exercise price of options granted under
these plans equals the market price of the underlying stock on the date of
grant, no compensation expense is required.
2. Initial Public Offering
On June 21, 1996 the Company issued 3.5 million shares of common stock
through a public offering, resulting in net proceeds (after deducting
expenses) of $44,490. The proceeds were used to redeem all of the
outstanding shares of redeemable preferred stock for $16,347 and to repay
$2,000 outstanding under an account purchase agreement.
In July 1996, the Company received net proceeds of $5,450 from additional
shares of common stock sold to cover over-allotments.
6
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
3. Acquisition
In February 1996, the Company acquired the net assets of Voice Systems
Technology, Inc. (VST), a company which develops and markets voice
processing systems, for approximately $2,500 ($500 cash and 265,373 shares
of common stock). The acquisition has been accounted for under the purchase
method of accounting and the results of operations will be included in the
Company's results of operations from the date of acquisition. The Company
is amortizing the goodwill associated with the acquisition over eight years
using the straight line method.
---
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - JUNE 30, 1995 AND 1996
- ----------------------------------------------
Service and system revenues.
- ---------------------------
Total revenues increased 50.8% from $8.5 millionin the three months ended June
30, 1995 to $12.8 million in the three months ended June 30, 1996 and increased
66.3% from $14.4 million in the six months ended June 30, 1995 to $24.0 million
for the six months ended June 30, 1996. Calling service revenues increased 26.6%
or $1.7 million from the three months ended June 30, 1995 to the same period
ended June 30, 1996 and 38.9% or $4.4 million from the six months ended June 30,
1995 to the six months ended June 30, 1996. The increase in revenues was
generated from existing carrier customers and resulted from the general growth
in the number of cellular subscribers and increased roaming by cellular
subscribers. Carrier support service revenues increased $1.4 million and $3.9
million, respectively for the three month and six month periods ended June 30,
1996 compared to the same periods in the prior year. The increase consisted
primarily of increased revenues from existing cellular carriers who increased
their use of the Company's services, and to a lesser extent, additional revenues
from new cellular carriers. System revenues are $1.1 million and $1.2 million,
respectively for the three month and six month periods ended June 30, 1996, the
first such period in which the Company had system revenues. System revenues were
generated by Voice Systems Technology, Inc. (VST), acquired in February 1996.
Cost of service revenues.
- ------------------------
Cost of service revenues increased from 77.2% of service revenues for the three
months ended June 30, 1995 to 80.9% of service revenues for the three months
ended June 30, 1996. The increase in cost of service revenues as a percentage of
service revenues was primarily due to costs incurred at the Company's new
operations center in the second quarter of 1996. Cost of service revenues for
the six months ended June 30, 1995 and 1996 were 77.6% and 78.1%, respectively,
of service revenues. Cost of service revenues as a percent of service revenues
had been decreasing compared to prior year until the new operations center was
opened.
Engineering, research and development expenses.
- ----------------------------------------------
Engineering, research and development expenses increased $576,000 or 343% from
the three months ended June 30, 1995 to the three months ended June 30, 1996 and
$896,000 or 336% from the six months ended June 30, 1995 as compared to the six
months ended June 30, 1996. The increases were principally due to the costs
associated with the Company's hiring of new personnel to support the
development, implementation and deployment of the C2C Network for its prepaid
service, and to a lesser extent, additional personnel to support the expansion
of its carrier support services.
Sales and marketing expenses.
- ----------------------------
Sales and marketing expenses increased $163,000 or 34.3% from the three months
ended June 30, 1995 to the three months ended June 30, 1996. Sales and marketing
costs for the six month period ended June 30, 1996 were $323,000 or 37.0% more
than the same period in the prior year. These increases resulted from additional
sales personnel and trade show costs to support the carrier support service
business and to promote the Company's new prepaid service network.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - JUNE 30, 1995 AND 1996 (CONTINUED)
- ----------------------------------------------------------
General and administrative expenses.
- -----------------------------------
General and administrative expenses increased $288,000 or 86.5% from the three
months ended June 30, 1995 compared to the three months ended June 30, 1996. For
the six months ended June 30, 1996 general and administrative expenses increased
$445,000 or 67.6% from the same period in the prior year. These increases were
principally due to the termination of a Management Agreement at March 31, 1996
which resulted in all payroll and certain benefits of senior management
personnel being incurred directly by the Company. In addition, increased general
and administrative costs resulted from the opening of the Company's new
operations center in March 1996 and other costs to support the Company's growth.
Depreciation and amortization expense.
- -------------------------------------
Depreciation and amortization expense increased $267,000 or 127% and $452,000 or
117% during the three month and six month periods ended June 30, 1996 compared
to the same periods in the prior year. Most of the increase resulted from
depreciation of additional technical equipment to support the Company's calling
and carrier support services and furniture and fixtures and leasehold
improvements to support the expansion of the Company's operations center. The
remainder of the increase was attributable to amortization of goodwill generated
from the acquisition of VST in February 1996. The Company expects depreciation
and amortization expense to continue to increase as the Company begins
commercial use of its C2C Network and continues to amortize goodwill from the
VST acquisition.
Interest expense, net.
- ---------------------
Interest expense (net of interest income) increased $40,000 or 114% and $30,000
or 58.8%, respectively for the three and six months ended June 30, 1996 as
compared to prior years. The increase resulted primarily from the interest cost
associated with capital leases relating to the expansion of the Company's
operations center entered into during April and May 1996.
Provision for income taxes.
- --------------------------
The Company's effective income tax rate for the three and six month periods
ended June 30, 1996 reflects an increase from comparable periods in the prior
year due to the Company's reversal of its valuation reserve in the fourth
quarter of 1995. The current effective income tax rate also reflects the non-
deductibility of goodwill amortization from the acquisition of VST.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1996 the Company had working capital of $27.3 million as compared to
$2.1 million at December 31, 1995. The increase is primarily attributable to an
initial public offering (IPO) in June 1996 which yielded net proceeds of $44.5
million. The proceeds were used to repay $16.3 million of redeemable preferred
stock and $2.0 million of notes payable. As a result, cash increased from
$253,000 at December 31, 1995 to $22.8 million at June 30, 1996. In July 1996,
the Company received net proceeds of $5.5 million from additional shares of
common stock sold to cover over-allotments.
Net cash used by operating activities for the six months ended June 30, 1996 was
$2.0 million and consisted primarily of an increase of accounts receivable and a
decrease in accounts payable and accrued expenses. Accounts receivable
increased due to increased calling service revenues and sales of systems from
the Company's subsidiary, VST, acquired in February 1996. Accounts payable and
expenses decreased as the Company
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
- -------------------------------------------
shortened its payment cycle with the proceeds from the IPO.
Net cash used in investing activities was $3.5 million for the six months ended
June 30, 1996 and consisted primarily of telecommunications equipment purchased
to support the Company's C2C Network and furniture and fixtures and leasehold
improvements obtained to support the Company's new operations center. In
addition, in February 1996 the Company acquired the net assets of VST for common
stock and cash.
Net cash provided by financing activities for the six months ended June 30, 1996
was $28.1 million. The increase resulted from the proceeds from the IPO less
the cash used to redeem the redeemable preferred stock.
In 1996, the Company financed the acquisition of $1.5 million of
telecommunications equipment and furniture and fixtures through a Master Lease
Agreement which was accounted for as a capital lease.
The Company has short-term financing available under an Account Purchase
Agreement with its outside billing agent. Amounts available under this
agreement are limited to the lesser of $2.8 million or 70% of eligible trade
receivables. Borrowings are payable on demand and bear interest at prime plus
1.5% per annum. As of June 30, 1996, no amount is outstanding under this
Account Purchase Agreement.
The Company believes that it has the necessary liquidity and capital resources
to sustain existing operations for at least the next eighteen months.
10
<PAGE>
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report may contain forward-looking statements that
involve risks and uncertainties. The Company's actual results may
differ significantly from the results discussed in the forward-looking
statements. A number of uncertainties exist that could affect the
Company's future operating results, including, without limitation,
technological changes in the Company's industry, the ability of the
Company to develop and successfully deploy its C2C Network, the
Company's ability to retain existing customers and attract new
customers, increased competition and general economic factors.
Historically, a significant portion of the Company's revenues in any
particular period has been attributable to a limited number of
customers. This concentration of customers can cause the Company's
revenues and earnings to fluctuate from quarter to quarter, based on
the volume of call traffic generated through these customers or the
services being performed pursuant to carrier support programs. A
significant decrease in business from any of the Company's major
customers, including a decrease in business due to factors outside of
the Company's control, would have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company historically has provided all of its services to cellular
carriers, including roaming services and carrier support services.
Although the cellular market, and in particular, the roaming segment of
the cellular market, has experienced significant growth in recent
years, there can be no assurance that such growth will continue at
similar rates, or at all, or that cellular carriers will continue to
use the Company's services. In addition, the prepaid wireless service
and PCS markets are in their initial stages of development, and if
these markets do not grow as expected or if the carriers in these
markets do not use the Company's services, the Company's business,
financial condition and results of operations could be materially and
adversely affected.
The Company's future success depends, in large part, on the continued
use of its existing services, the acceptance of new services in the
wireless industry, such as prepaid service, and the Company's ability
to develop services that keep pace with changes in the wireless
telephone industry. Further, a rapid shift away from the use of
cellular in favor of other services, such as PCS, could affect demand
for the Company's service
11
<PAGE>
offerings and could require the Company to develop modified or
alternative service offerings addressing the particular needs of
providers of such new services. There can be no assurance that
the Company will be successful in developing or marketing its
existing or future service offerings in a timely manner, or at
all.
The Company is currently devoting significant resources toward the
development and deployment of its wireless prepaid service, including
deployment of its C2C Network. There can be no assurance that the
Company will successfully complete the development and deployment of
the C2C Network or its prepaid service in a timely fashion, that the
market for the Company's prepaid service will develop, or that the
Company's C2C Network will operate successfully.
The Company has experienced fluctuations in its quarterly operating
results and anticipates that such fluctuations will continue and could
intensify. The Company's quarterly operating results may vary
significantly depending on a number of factors, including the timing of
the introduction or acceptance of new services offered by the Company
or its competitors, changes in the mix of services provided by the
Company, changes in regulations affecting the wireless industry,
changes in the Company's operating expenses, personnel changes and
general economic conditions. Due to all of the foregoing factors, it is
possible that in some future quarter the Company's results of
operations will be below prior results or the expectations of public
market analysts and investors. In such event, the price of the
Company's Common Stock would likely be materially adversely affected.
Recently, the Company has expanded its operations rapidly, which
has created significant demands on the Company's administrative,
operational, development and financial personnel and other resources.
Additional expansion by the Company may further strain the Company's
management, financial and other resources. There can be no assurance
that the Company's systems, procedures, controls and existing space
will be adequate to support expansion of the Company's operations. If
the Company's management is unable to manage growth effectively, the
quality of the Company's services, its ability to retain key personnel
and its business, financial condition and results of operations could
be materially and adversely affected.
The market for services to wireless carriers is highly competitive and
subject to rapid change. A number of companies currently offer one or
more of the services offered by the Company. In addition, wireless
carriers are providing or can provide, in-house, the services that the
Company offers. In addition, the Company anticipates continued growth
and competition
12
<PAGE>
in the wireless carrier services industry and consequently, the
entrance of new competitors in the future. An increase in
competition could result in price reductions and loss of market
share. Any resulting reduction in gross margins could have a
material adverse effect on the Company's business, financial
condition or results of operations.
The Company's success and ability to compete is dependent in part upon
its proprietary technology. If unauthorized copying or misuse of the
Company's technology were to occur to any substantial degree, the
Company's business, financial condition and results of operations could
be materially adversely affected. In addition, some of the software
used to support the Company's roaming services and prepaid services is
licensed by the Company from single vendors, which are small
corporations. There can be no assurance that these suppliers will
continue to license this software to the Company or, if any supplier
terminates its agreement with the Company, that the Company will be
able to develop or otherwise procure software from another supplier on
a timely basis and at commercially acceptable prices.
The Company's operations are dependent on its ability to maintain its
computer, switching and other telecommunications equipment and systems
in effective working order and to protect its systems against damage
from fire, natural disaster, power loss, telecommunications failure or
similar events. Any damage, failure or delay that causes interruptions
in the Company's operations could have a material adverse effect on the
Company's business, financial condition and results of operations.
13
<PAGE>
PART II. OTHER INFORMATION:
- ----------------------------
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
The exhibits listed in the Exhibit Index are part of or included
in this report.
b) Reports on Form 8-K
NONE
14
<PAGE>
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, thereunto duly authorized.
Boston Communications Group
-------------------------------
(Registrant)
Date: August 12, 1996 By: /s/ George K. Hertz
--------------------------
George K. Hertz
Chief Executive Officer and
President
Date: August 12, 1996 By: /s/ Fritz von Mering
--------------------
Fritz von Mering
Vice President, Finance and
Administration
15
<PAGE>
BOSTON COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX TO EXHIBITS
-----------------
Exhibit No. Description
- ----------- -----------
11.0 Statement RE: Computation of Per Share Earnings
16
<PAGE>
EXHIBIT 11.0
------------
BOSTON COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1996 1995 1996
---- ---- ---- ----
NET INCOME (LOSS) PER COMMON SHARE - PRIMARY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net income (loss) $ 172 $ (70) $ (214) $ 122
====== ====== ====== ======
Primary income (loss) per share:
Average common shares outstanding 3,336 4,230 3,336 3,783
Dilutive options and warrants 212 - 212 -
Other (1) 5,630 5,259 5,630 5,551
------ ------ ------ ------
Average common shares outstanding 9,178 9,489 9,178 9,334
====== ====== ====== ======
Net income (loss) per common share $ 0.02 $(0.01) $(0.02) $ 0.01
====== ====== ====== ======
</TABLE>
NET INCOME (LOSS) PER COMMON SHARE - FULL DILUTION
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net income (loss) $ 172 $ (70) $ (214) $ 122
====== ====== ====== ======
Fully diluted income (loss) per share:
Average common shares outstanding 3,336 4,230 3,336 3,783
Dilutive options and warrants 212 - 212 -
Other (1) 5,630 5,259 5,630 5,551
------ ------ ------ ------
Average common shares outstanding 9,178 9,489 9,178 9,334
====== ====== ====== ======
Net income (loss) per common share $ 0.02 $(0.01) $(0.02) $ 0.01
====== ====== ====== ======
</TABLE>
(1)Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No.
83, Common Stock issuable upon exercise of warrants issued during the twelve-
month period preceding the date of the initial filing of the registration
statement with an exercise price below the initial public offering price of
$14.00 per share have been included in the calculation of common equivalent
shares, using the Treasury stock method, as if they were outstanding for all
periods presented.
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,847
<SECURITIES> 0
<RECEIVABLES> 10,563
<ALLOWANCES> 1,264
<INVENTORY> 231
<CURRENT-ASSETS> 35,502
<PP&E> 8,750
<DEPRECIATION> 2,199
<TOTAL-ASSETS> 47,163
<CURRENT-LIABILITIES> 8,246
<BONDS> 0
0
0
<COMMON> 123
<OTHER-SE> 37,815
<TOTAL-LIABILITY-AND-EQUITY> 47,163
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<TOTAL-REVENUES> 12,840
<CGS> 553
<TOTAL-COSTS> 10,018
<OTHER-EXPENSES> 2,480
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<INTEREST-EXPENSE> 75
<INCOME-PRETAX> 267
<INCOME-TAX> 123
<INCOME-CONTINUING> 144
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
