<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period from to
-------------------------- -----------------------------
Commission file number 0-13217
M/A/R/C(R) INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1781525
- --------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7850 North Belt Line Road, Irving, Texas 75063
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 506-3400
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
- -------------------------------------------------------------------------------
(Former name, former address and 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 report), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,242,675 shares as of June 30,
1999.
<PAGE> 2
THE M/A/R/C(R) GROUP
INDEX
(UNAUDITED)
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Independent Accountant's Report..................................................i
Consolidated Balance Sheets
June 30, 1999, and December 31, 1998...........................................1
Consolidated Statements of Operations
Three Months Ended June 30, 1999, and 1998.....................................2
Consolidated Statements of Operations
Six Months Ended June 30, 1999, and 1998.......................................3
Consolidated Statement of Changes in Stockholders' Equity
Six Months Ended June 30, 1999.................................................4
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1999, and 1998.......................................5
Consolidated Notes to Financial Statements.....................................6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................................8-12
PART II. OTHER INFORMATION...........................................................................13
Item 4. Submission of Matters to a Vote of Security Holders.............................13
</TABLE>
<PAGE> 3
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Shareholders of The M/A/R/C(R) Group:
We have reviewed the accompanying consolidated balance sheet of The M/A/R/C(R)
Group as of June 30, 1999, and the condensed consolidated statements of
operations and cash flows for the three-month periods ended June 30, 1999, and
1998, and the consolidated statement of changes in shareholders' equity for the
six-month period ended June 30, 1999. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as December 31, 1998, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
February , 1999, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of December 31, 1998, is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.
PricewaterhouseCoopers LLP
July 16, 1999
i
<PAGE> 4
PART I. FINANCIAL INFORMATION
THE M/A/R/C(R) GROUP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1999 Dec. 31, 1998
------------- -------------
(Dollars in Thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments $ 7,500 $ 4,846
Trade accounts receivable, net 12,191 11,925
Expenditures billable to clients, net 8,496 6,851
Notes receivable 2 10
Federal income tax receivable 182 580
Deferred income taxes receivable 378 404
Prepaid expenses and other current assets 3,499 2,529
---------- ----------
Total Current Assets 32,248 27,145
---------- ----------
Notes receivable, less current portion -- 52
Property and equipment, less accumulated depreciation of
$19,550,000 and $17,471,000, respectively 32,055 32,678
Investments at cost 7,475 7,072
Intangibles, less accumulated amortization of $3,064,000
and $2,947,000, respectively 6,437 6,022
Prepaid pension costs and other assets 5,913 5,923
---------- ----------
TOTAL ASSETS $ 84,128 $ 78,892
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion, long-term debt $ 1,360 $ 1,480
Trade accounts payable 2,198 2,845
Advance payments from clients 3,220 2,265
Other accrued liabilities 3,873 682
---------- ----------
Total Current Liabilities 10,651 7,272
Long-term debt, less current portion 17,294 19,879
Deferred taxes payable and other liabilities 6,199 5,351
---------- ----------
Total Liabilities 34,144 32,502
---------- ----------
Stockholders' Equity:
Common stock, $1 par value, 15,000,000 shares authorized,
6,712,943 and 6,691,500 issued, respectively 6,713 6,692
Capital in excess of par value 13,524 13,226
Retained earnings 45,070 41,518
Accumulated other comprehensive income (1,641) (1,641)
Less treasury stock at cost 1,470,268 and 1,415,414 shares, respectively (9,795) (9,211)
Unearned compensation (2,415) (2,509)
Unearned ESOP shares (1,472) (1,685)
---------- ----------
Total Stockholders' Equity 49,984 46,390
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 84,128 $ 78,892
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 5
THE M/A/R/C(R) GROUP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1999, AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(Dollars in Thousands,
Except Per Share Data)
<S> <C> <C>
Revenues $ 24,760 $ 24,074
Costs and expenses 23,034 23,288
------------ ------------
Operating income 1,726 786
Gain on sale of equity investment 4,764 0
Interest and other income (expense) net (161) (14)
------------ ------------
Income before taxes 6,329 772
Federal and state income tax provision 2,240 272
------------ ------------
NET INCOME $ 4,089 $ 500
============ ============
Net income per share - Basic $ .83 $ .10
============ ============
Net income per share - Diluted $ .81 $ .10
============ ============
Weighted average common shares outstanding - Basic 4,919,117 4,961,995
============ ============
Weighted average common shares outstanding - Diluted 5,056,593 5,158,610
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 6
THE M/A/R/C(R) GROUP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999, AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(Dollars in Thousands,
Except Per Share Data)
<S> <C> <C>
Revenues $ 46,335 $ 44,473
Costs and expenses 44,150 44,897
------------ ------------
Operating income (loss) 2,185 (424)
Gain on sale of equity investment 4,764 0
Interest and other income (expense) net (229) (55)
------------ ------------
Income (loss) before taxes 6,720 (479)
Federal and state income tax provision (benefit) 2,379 (250)
------------ ------------
NET INCOME (LOSS) $ 4,341 $ (229)
============ ============
Net income (loss) per share - Basic $ .88 $ (.05)
============ ============
Net income (loss) per share - Diluted $ .86 $ (.05)
============ ============
Weighted average common shares outstanding - Basic 4,957,059 4,923,606
============ ============
Weighted average common shares outstanding - Diluted 5,069,228 4,923,606
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 7
THE M/A/R/C(R) GROUP
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Common Capital in Other Unearned Cost of
Stock, $1 Excess of Retained Comprehensive Unearned ESOP Treasury
Par Value Par Value Earnings Income Compensation Shares Stock
--------- --------- -------- -------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Balance at December 31, 1998 $6,692 $13,226 $41,518 $(1,641) $(2,509) $(1,685) $(9,211)
Exercise options/warrants 21 56
Purchase treasury stock (584)
Amortization of compensation 11 94
Dividends paid $(0.075 per share) (789)
Release of ESOP shares 231 213
Net income (loss) 4,341
------ ------- ------- ------- ------- ------- -------
Balance at June 30, 1999 $6,713 $13,524 $45,070 $(1,641) $(2,415) $(1,472) $(9,795)
====== ======= ======= ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 8
THE M/A/R/C(R) GROUP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---------- ----------
(Dollars in Thousands)
<S> <C> <C>
Net cash flow from operating activities:
Net income (loss) $ 4,341 $ (229)
Noncash items:
Depreciation and amortization 2,607 2,154
ESOP Expense 213 244
Amortization of unearned compensation 94 108
(Gain) loss on sale of property and equipment (70) (14)
Bad-debt expense 10 560
(Gain) loss on equity-method investment (4,913) (61)
Net (increase) in receivables and
expenditures billable to clients (1,921) 306
Net (increase) decrease in prepaid expenses and other assets (1,072) (1,186)
Increase (decrease) in trade accounts payable (647) 107
Increase (decrease) in accrued liabilities and other liabilities 4,039 (462)
---------- ----------
Net cash provided by operating activities 2,681 1,527
---------- ----------
Cash flows from investing activities:
Acquisition of property and equipment (1,733) (2,610)
Net (additions to) reductions in notes receivable 60 6
Purchase of idm -- (4,144)
Proceeds from sale of equity investment 4,913 --
Net (increase in) reduction of investments (464) (1,417)
---------- ----------
Net cash used by investing activities 2,776 (8,165)
---------- ----------
Cash flows from financing activities:
Net (decrease) increase in customer service 955 (495)
Acquisition (payment) of short-term debt (2,705) --
Acquisition (payment) of long-term debt -- 4,049
Issuance of common stock 319 470
Cash dividends paid (789) (881)
Issue/(purchase of) treasury stock (584) (446)
---------- ----------
Net cash provided (used) by financing activities (2,804) 2,697
---------- ----------
Net increase (decrease) in cash 2,654 (3,941)
Cash and short-term investments at December 31 4,846 6,374
---------- ----------
Cash and short-term investments at June 30 $ 7,500 $ 2,433
========== ==========
Schedule of noncash investing activity:
Acquisition of idm
Cash paid $ 4,144
Common stock issued 102
Capital in excess of par 1,741
----------
$ 5,987
==========
Net assets consolidated 1,542
Goodwill recorded 4,445
----------
$ 5,987
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 9
THE M/A/R/C(R) GROUP
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments necessary to
present fairly the Company's consolidated financial position as of June
30, 1999, the consolidated results of its operations for the six months
ended June 30, 1999, and June 30, 1998, and its consolidated cash flows
for the six months ended June 30, 1999, and June 30, 1998.
2. These condensed consolidated financial statements are presented in
accordance with the requirements of Form 10-Q and consequently do not
include all disclosures normally required by generally accepted
accounting principles or those normally made in the Company's Annual
Report on Form 10-K. The December 31, 1998, condensed balance sheet
data was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting
principles. Accordingly, the financial statements and related notes in
the Company's Annual Report on Form 10-K for the year ended December
31, 1998, should be read in conjunction with the accompanying condensed
consolidated financial statements.
3. The Company adopted Statement of Financial Accounting Standards No.
128, Earnings Per Share (SFAS 128) for the period ending December 31,
1997. SFAS 128 specifies the computation, presentation, and disclosure
requirements for basic and fully diluted earnings per share.
4. In June of 1999, the Company sold its minority ownership in Digital
Marketing Services, Inc. to the majority owner, America Online, Inc.
The transaction resulted in a nonrecurring gain of $4,764,000 before
taxes. On an after-tax basis, the nonrecurring gain was $3,097,000, or
$.61 per diluted share.
6
<PAGE> 10
THE M/A/R/C(R) GROUP
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
5. In 1998, the Company adopted SFAS 131. Under SFAS 131, the Company is
comprised of two reportable segments: (1) Targetbase(sm) Marketing and
(2) M/A/R/C(R) Research.
The table below presents information about the reported segments for
the six months ended June 30, 1999, and 1998.
<TABLE>
<CAPTION>
1999 1998
Targetbase(sm) M/A/R/C(R) Targetbase(sm) M/A/R/C(R)
(dollars in thousands) Marketing Research Consolidated Marketing Research Consolidated
--------- -------- ------------ --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues(1) $ 27,628 $ 18,693 $ 46,335 $ 25,141 $ 19,351 $ 44,473
--------- --------- --------- --------- --------- ---------
Operating income
(loss) 2,305 (120) 2,185 2,190 (2,614) (424)
========= ========= --------- ========= ========= ---------
Not reflected in
segments:
Nonrecurring gain 4,764 -
Interest and other
income (expense) net (229) (55)
--------- ---------
Income (loss) before
taxes $ 6,720 $ (479)
========= =========
Segments assets(2) $ 18,619 $ 9,264 $ 84,128 $ 17,128 $ 9,695 $ 78,892
</TABLE>
(1) Adjustments totaling $14 in 1999 and $(19) in 1998 reflected in
consolidated revenues were not allocated to the segments.
(2) Assets totaling $56,245 in 1999 and $52,069 in 1998 reflected in
consolidated assets were not allocated to the segments.
7
<PAGE> 11
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The M/A/R/C(R) Group is a marketing information services company,
providing service to over 200 clients nationwide. The majority of our clients
are large public companies. The Company offers a wide range of marketing
information services through its two operating segments: M/A/R/C(R) Research and
Targetbase(sm) Marketing.
The following Management's Discussion is presented comparing the six
months ended June 30, 1999, with the six months ended June 30, 1998, and the
three months ended June 30, 1999, with the three months ended June 30, 1998.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999, WITH SIX MONTHS ENDED JUNE 30,
1998
Revenues increased to $46,335,000 for the six-month period ended June
30, 1999, compared with revenues of $44,473,000 for the six-month period ended
June 30, 1998. Production and administrative expenses were 95.3% of revenues,
compared with 101.0% for the prior year.
For the six months this year, the Company recorded operating income of
$2,185,000 compared with an operating loss of $(424,000) last year for the same
period. The improved results reflect the success of programs initiated last year
in both Research and Targetbase(sm) segments.
Looking at the two businesses in more detail: Targetbase(sm) Marketing
had revenues of $27,628,000 in the first six months of 1999, a 10% increase over
last year's first six months, and generated an operating margin of $2,305,000,
or 8.3% of revenues, compared with $2,190,000 last year. M/A/R/C(R) Research had
revenues of $18,693,000, a 3% decline from the first six months of 1998, and had
an operating loss of $(120,000), compared with an operating loss of $(2,614,000)
for the comparative period last year.
8
<PAGE> 12
THE M/A/R/C(R) GROUP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The increase in revenues in Targetbase(sm) includes $2,191,000 from our
U.K. subsidiary. Our profitability in this division continues to be impacted by
the costs associated with our new software platform as well as our interactive
capabilities.
During the second quarter, the Company experienced a nonrecurring gain
of $4,764,000 $(3,097,000 after taxes, or $.61 per share) from the sale of a
minority ownership position in Digital Marketing Services, Inc. to America
Online, Inc., the majority owner.
Operating income improvement in M/A/R/C(R) Research has been driven
primarily by expense reduction; however, new business prospects appear to be
improving.
Net interest and other income (expense) increased $174,000 to
$(229,000) for the comparable six-month period.
The Company recorded net income for the six-month period ended June 30,
1999, of $4,341,000, $.86 a share compared with a net loss of ($229,000), or
($.05) a share for the comparable six-month period ended June 30, 1998.
Excluding the nonrecurring after-tax gain of $3,097,000, or $.61 per share,
recurring net income for the six months of 1999 was $1,244,000, or $.25 per
share.
The weighted average number of shares outstanding increased to
4,957,059 from 4,923,606 last year. In accordance with Statement of Position
93-6, "Employers' Accounting for Employee Stock Option Plans," the Company did
not treat as outstanding for calculating earnings per share 259,689 shares held
in the Employee Shareholders Ownership Plan that have not been released to
participants. The Company repurchased 55,000 shares of its stock during the
six-month period ended June 30, 1999.
9
<PAGE> 13
THE M/A/R/C(R) GROUP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1999, WITH THREE MONTHS ENDED JUNE 30,
1998
Revenues for the second quarter ended June 30, 1999, were $24,760,000
compared with $24,074,000 for the similar period in 1998.
Production and administrative expenses were 93.0% for the period
compared with 96.7% for the prior year.
Operating income increased to $1,726,000 from $786,000 for the
prior-year comparable period. The Company's Research business stabilized and
showed improvement during the second quarter, recording operating income of
$246,000 on revenues of $10,060,000. Cost controls coupled with an improved mix
of business resulted in better operating margins despite a slightly reduced
revenue base in this segment.
Targetbase(sm) had strong results in the second quarter driven by
expanded sales to existing clients and meaningful revenues from new accounts.
During the second quarter, the second ARM(TM) installation was completed and the
third installation was begun. The continued investments in ARM(TM), our software
platform, and in our internet business are positioning Targetbase(sm) to be a
significant competitor in the marketing services industry as the importance of
customer relationship management continues to grow.
Net interest and other income declined $(147,000) to $(161,000).
Additionally, the second quarter of 1999 includes a nonrecurring gain of
$4,764,000 $(3,097,000 after tax, or $.61 per diluted share), associated with
the sale of a minority ownership position in Digital Marketing Services, Inc. to
America Online, Inc., the majority owner.
10
<PAGE> 14
THE M/A/R/C(R) GROUP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Net income for the three-month period ended June 30, 1999, increased to
$4,089,000, or $.81 a share, on a diluted basis from $500,000, or $.10 a share,
the year before. Excluding the nonrecurring gain, recurring net income was
$992,000, or $.20 per diluted share.
The weighted average number of shares outstanding increased to 4,919,117
from 4,961,995 last year. In accordance with Statement of Position 93-6,
"Employers' Accounting for Employee Stock Option Plans," the Company did not
treat as outstanding for calculating earnings per share 259,689 shares held in
the Employee Shareholders Ownership Plan that have not been released to
participants. The Company repurchased 5,000 shares of its stock during the
three-month period ended June 30, 1999.
CAPITAL RESOURCES AND LIQUIDITY
From December 31, 1998, to June 30, 1999, cash and short-term investments
increased $2,654,000 primarily because of the increased cash flow from
operations and investment activities. The June 30, 1999, cash and short-term
investment position of $7,500,000, the Company's bond portfolio of $7,475,000,
the working capital position of $21,597,000, and the existing and unused lines
of bank credit totaling $9,461,997 are adequate to support the Company's cash
requirements for operating and capital expenditures.
YEAR 2000
The Company began work on the Year 2000 compliance issue in 1998. To
date we have inventoried our IT and non-IT environments, both internal and
external, and assessed them for compliance. Our primary exposure resides in
software that processes the databases we manage, software
11
<PAGE> 15
THE M/A/R/C(R) GROUP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
that is used in our statistical analysis work, and our interviewing and
tabulating software. Our testing environment has been built, and we are now
systematically testing all software and operating systems. The Company estimates
it will spend approximately $400,000 bringing our various applications,
operating systems, and hardware into compliance. Approximately $300,000 has been
expended to date. We are slated to complete testing, with all required
remediation and contingency planning, by the end of August 1999. Management
believes the modifications to our proprietary software are relatively minor and
that our overall risks are quite modest in nature. A reasonable worst-case
scenario resulting from one or more of these software systems being noncompliant
might be our inability to service one or more of our clients for a short period
of time.
EFFECT OF INFLATION ON OPERATIONS
Due to a wide diversity in terms of project size, costs and project
duration, the Company is unable to estimate accurately the effects of inflation
on its revenue and profit. The major consequence of inflation is mitigated by
controlling cost estimating procedures in a timely manner where possible.
12
<PAGE> 16
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 11, 1999, subsequent to the close of the first quarter, The M/A/R/C(R)
Group held its annual shareholders' meeting for the fiscal year ended December
31, 1998. The shareholders voted on the following proposal:
A. To elect three directors, Elmer L. Taylor, Jr., John H. Friedman,
and Thomas Vacchiano, Jr., to hold office for a three-year term
expiring at the 2002 shareholders' meeting or until their successors
are elected and have qualified.
Incumbent directors serving for a three-year term expiring at the
2000 shareholders' meeting are Sharon M. Munger and Edward R. Anderson.
Incumbent directors serving for a three-year term expiring at the 2001
shareholders' meeting are Cecil B. Phillips, Rolan G. Tucker, and Jack
D. Wolf.
B.Results of the election are as follows: 4,535,302 votes, or 85.2%
of the quorum, were cast for Elmer L. Taylor, Jr., John H. Friedman,
and Thomas Vacchiano, declaring them elected.
13
<PAGE> 17
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.
<TABLE>
<S> <C>
The M/A/R/C(R) Group
----------------------------
(Registrant)
Date: August 5, 1999 /s/ SHARON M. MUNGER
---------------------------- ----------------------------
Sharon M. Munger
(Chairman of the Board and
Chief Executive Officer)
Date: August 5, 1999 /s/ HAROLD R. CURTIS
---------------------------- ----------------------------
Harold R. Curtis
(Chief Financial Officer)
</TABLE>
14
<PAGE> 18
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 7,500
<SECURITIES> 7,475
<RECEIVABLES> 12,583
<ALLOWANCES> (392)
<INVENTORY> 8,496
<CURRENT-ASSETS> 32,248
<PP&E> 51,605
<DEPRECIATION> (19,550)
<TOTAL-ASSETS> 84,128
<CURRENT-LIABILITIES> 10,651
<BONDS> 17,294
0
0
<COMMON> 6,713
<OTHER-SE> 43,271
<TOTAL-LIABILITY-AND-EQUITY> 84,128
<SALES> 46,335
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 44,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,535
<INCOME-PRETAX> 6,720
<INCOME-TAX> 2,379
<INCOME-CONTINUING> 4,341
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,341
<EPS-BASIC> .88
<EPS-DILUTED> .86
</TABLE>
