<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange
- --- Act of 1934.
For the quarterly period ended March 31, 1998
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange
- --- Act of 1934.
Commission file number 0-11428
INFORMATION RESOURCES, INC.
-------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2947987
------------------------------------------------ -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 North Clinton Street, Chicago, Illinois 60661
------------------------------------------------ -----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 726-1221
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Common, $.01 par value per share
Preferred Stock Purchase Rights
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
---- ----
The number of shares of the registrant's common stock, $.01 par value per share
outstanding, as of April 30, 1998 was 28,826,715.
<PAGE> 2
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION
----------------------------------
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
----------------------------------------------------
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
2
<PAGE> 3
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 15,094 $ 20,925
Accounts receivable, net 101,259 96,209
Prepaid expenses and other 7,797 9,563
--------- ---------
Total Current Assets 124,150 126,697
--------- ---------
Property and equipment, at cost 184,159 180,043
Accumulated depreciation and amortization (114,703) (111,628)
--------- ---------
Net property and equipment 69,456 68,415
Investments 8,562 13,061
Other assets 166,696 158,447
--------- ---------
$ 368,864 $ 366,620
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of capitalized leases $ 2,052 $ 2,266
Accounts payable 43,002 49,306
Accrued compensation and benefits 13,315 20,357
Accrued property, payroll and other taxes 3,496 3,068
Accrued expenses 11,854 6,324
Deferred revenue 28,623 20,469
--------- ---------
Total Current Liabilities 102,342 101,790
--------- ---------
Long-term capitalized leases 438 640
Deferred income taxes, net 14,586 13,660
Other liabilities 8,964 8,988
STOCKHOLDERS' EQUITY
Preferred stock-authorized 1,000,000 shares
$.01 par value - none issued -- --
Common stock - authorized 60,000,000 shares,
$.01 par value; 28,709,170 and
28,713,943 shares issued and
outstanding, respectively 287 287
Capital in excess of par value 198,484 198,537
Retained earnings 47,842 45,932
Cumulative translation adjustment (4,079) (3,214)
--------- ---------
Total Stockholders' Equity 242,534 241,542
--------- ---------
$ 368,864 $ 366,620
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
--------------------
1998 1997
--------- ---------
<S> <C> <C>
Revenues $119,190 $105,128
Costs and expenses:
Operating expenses (104,369) (95,913)
Selling, general and administrative expenses (11,535) (9,253)
--------- ---------
(115,904) (105,166)
--------- ---------
Operating profit (loss) 3,286 (38)
Interest expense and other, net (165) (243)
Equity in earnings of affiliated companies 74 160
--------- ---------
Earnings (loss) before income taxes and
minority interests 3,195 (121)
Income tax expense (1,400) (47)
--------- ---------
Earnings (loss) before minority interests 1,795 (168)
Minority interests benefit 115 223
--------- ---------
Net earnings $ 1,910 $ 55
========= =========
Net earnings per common share - basic $.07 $--
========= =========
Net earnings per common and
common equivalent share - diluted $.07 $--
========= =========
Weighted average common shares - basic 28,671 28,052
========= =========
Weighted average common and
common equivalent shares - diluted 28,946 28,563
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-------------------
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,91 $ 55
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of deferred data procurement costs 27,087 23,911
Depreciation 5,497 4,970
Amortization of capitalized software costs and intangibles 1,556 1,590
Deferred income tax expense 1,400 47
Equity in earnings of affiliated companies and minority interests (189) (383)
Other 365 (897)
Change in assets and liabilities:
Increase in accounts receivable (3,942) (1,701)
Decrease in other current assets 2,109 1,541
Decrease in accounts payable and accrued liabilities (6,898) (9,053)
Increase in deferred revenue 8,278 5,655
Other, net (1,343) (686)
-------- --------
Total adjustments 33,920 24,994
-------- --------
Net cash provided by operating activities 35,830 25,049
CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred data procurement costs (29,278) (25,826)
Purchase of property and equipment (6,336) (3,166)
Capitalized software costs (2,285) (1,104)
Proceeds from disposition of assets and other 97 1,730
-------- --------
Net cash used in investing activities (37,802) (28,366)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net bank repayments -- (1,750)
Repayments of capitalized leases (416) (1,030)
Purchases of Common Stock (3,839) --
Proceeds from exercise of stock options and other 812 3,980
-------- --------
Net cash (used) provided by financing activities (3,443) 1,200
EFFECT OF EXCHANGE RATE CHANGES ON CASH (416) (684)
-------- --------
Net decrease in cash and cash equivalents (5,831) (2,801)
Cash and cash equivalents at beginning of period 20,925 12,195
-------- --------
Cash and cash equivalents at end of period $15,094 $ 9,394
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation: The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements included in Information Resources, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997. The condensed
consolidated financial information furnished herein reflects all
adjustments (consisting of normal recurring accruals) which are, in the
opinion of management, necessary for a fair presentation of the condensed
consolidated financial statements for the periods shown.
Principles of consolidation: The condensed consolidated financial
statements include the accounts of Information Resources, Inc. and all
wholly or majority owned subsidiaries and affiliates (collectively "the
Company"). Minority interests reflect the non-Company owned stockholder
interests within international operations, including effective February 1,
1998, IRI/GfK Retail Services B.V. (the Netherlands). The equity method of
accounting is used for investments in which the Company has a 20% to 50%
ownership and exercises significant influence over operating and financial
policies. All significant intercompany accounts and transactions have been
eliminated in consolidation.
Reclassifications: Certain amounts in the 1997 condensed consolidated
financial statements have been reclassified to conform to the 1998
presentation.
Adoption of Recent Statement of Financial Accounting Standards: In
July 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" and Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information"
(collectively "the Standards"). The Standards are effective for fiscal
years beginning after December 15, 1997. The Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" in
the first quarter of 1998. The Company is currently investigating the
impact of Statement of Financial Accounting Standards No. 131 "Disclosures
about Segments of an Enterprise and Related Information" for adoption in
its December 31, 1998 consolidated financial statements.
6
<PAGE> 7
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
(UNAUDITED)
NOTE 2 - COMPREHENSIVE INCOME (LOSS)
The comprehensive income summary shown below sets forth certain items
that affect stockholders' equity but are excluded from the presentation of
net income. The components of comprehensive income/(loss) for the three
months ended March 31, 1998 and 1997 were as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
------ --------
<S> <C> <C>
Net income $1,910 $55
Foreign currency translation
adjustment, net of tax (519) (1,481)
------ --------
Comprehensive income (loss) $1,391 $(1,426)
====== ========
</TABLE>
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and income taxes during the period was as follows
(in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
---------------------------
1998 1997
------ ------
<S> <C> <C>
Interest $ 304 $ 525
Income taxes 372 242
</TABLE>
NOTE 4 - THE NETHERLANDS OPERATIONS
The Company and GfK AG of Germany ("GfK") operate a joint venture which
offers a scanner-based product tracking service to the Netherlands market
operating under the InfoScan name. This scanner-based product tracking
service became fully-operational in 1994. Until early 1998, this joint
venture was owned 80.1% by GfK and 19.9% by the Company. In February 1998,
the Company increased its ownership to 51% and took over management
responsibilities. The Company provides production services to the joint
venture through the Company's computer facilities in Wood Dale, Illinois.
In 1998, the Company also sold a 9.9% interest in GfK Panel Services
Benelux B.V. and GfK Belgium S.A. reducing its ownership to 10%. Those
companies operate household panel services in the Netherlands and Belgium
and continue to cooperate with the Netherlands InfoScan operation in the
sale and delivery of services to common customers.
7
<PAGE> 8
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
(UNAUDITED)
NOTE 5 - ACCOUNTS RECEIVABLE
Accounts receivable were as follows (in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31,1997
-------------- ----------------
<S> <C> <C>
Billed $ 72,859 $ 70,761
Unbilled 32,051 29,288
-------------- ----------------
104,910 100,049
Reserve for accounts receivable (3,651) (3,840)
-------------- ----------------
$101,259 $ 96,209
============== ================
</TABLE>
NOTE 6 - OTHER ASSETS
Other assets were as follows (in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
-------------- ----------------
<S> <C> <C>
Deferred data procurement costs -
net of accumulated amortization of
$109,508 in 1998 and $108,491 in 1997 $128,367 $126,733
Intangible assets, including goodwill
primarily related to acquisitions -
net of accumulated amortization of
$11,012 in 1998 and $10,233 in 1997 21,219 16,463
Capitalized software costs - net of
accumulated amortization of $4,252
in 1998 and $3,578 in 1997 7,622 6,093
Other 9,488 9,158
-------------- ----------------
$166,696 $158,447
============== ================
</TABLE>
8
<PAGE> 9
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
(UNAUDITED)
NOTE 7 - LONG-TERM DEBT
The Company currently has a $75.0 million bank revolving credit
facility maturing in 2001. The facility has floating interest rate options
at or below prime and commitment fees of .15% payable on the unused portion.
The financial covenants in the bank credit agreement, as well as in the
lease agreement for the Company's Chicago headquarters, require the Company
to maintain a minimum tangible net worth and to meet certain cash flow
coverage and leverage ratios. The agreements also limit the Company's
ability to declare dividends or make distributions to holders of capital
stock, or redeem or otherwise acquire shares of the Company. Approximately
$65.4 million is currently available for such distributions under the most
restrictive of these covenants. The credit agreement contains covenants
which restrict the Company's ability to incur additional indebtedness.
9
<PAGE> 10
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's consolidated net earnings were $1.9 million or $.07 per
diluted share for the first quarter of 1998 compared to essentially
break-even earnings for the corresponding 1997 quarter. Consolidated
revenues for the three months ended March 31, 1998 were $119.2 million, an
increase of 13% over the corresponding quarter in 1997. This increase was
the result of revenue growth in the U.S. Services business and a substantial
increase in international revenues which was aided somewhat by the inclusion
of the Netherlands operation effective February 1998.
Consolidated operating expenses increased 9% to $104.4 million for the
three months ended March 31, 1998 compared to $95.9 million for the same
period in 1997. The increase in the first quarter of 1998 was primarily due
to: (a) a $5.6 million increase in compensation expense resulting primarily
from higher salaries and higher headcount required for operations, client
servicing and international growth; (b) a $3.2 million increase in
amortization of deferred data procurement costs, principally resulting from
the expansion of the information services business in Europe; and (c) $1.4
million increase in operating expenses due to the consolidation of IRI/GfK
Retail Services B.V.
Consolidated selling, general and administrative expenses increased 25%
to $11.5 million for the first quarter of 1998. This increase was primarily
attributable to higher compensation expenses worldwide and legal expenses in
the U.S. Increased legal expenses related directly to the Company's
antitrust lawsuit against The Dun & Bradstreet Corporation, ACNielsen
Company and IMS International, Inc. In that suit the Company is seeking $1
billion in trebled damages from the defendants for violations of U.S.
antitrust laws. The case recently entered the discovery phase and the
Company anticipates incurring its current level of legal expenses in the next
several fiscal quarters as the case progresses toward trial.
For all periods presented, the Company's effective income tax rate is
greater than the U.S. Federal statutory rate due to certain unbenefitted
foreign losses, goodwill amortization and other nondeductible expenses.
Based upon discussions with financial analysts, the Company considers
the aggregation of operating profit (loss), equity earnings and minority
interests ("Operating Results"), on a geographic basis to be a meaningful
measure of the Company's operating performance. A comparative analysis of
consolidated revenues and Operating Results for the three months ended March
31, 1998 and 1997 follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues:
U.S. Services $ 94,572 $ 86,090
International Services 24,618 19,038
-------- --------
$119,190 $105,128
======== ========
Operating Results:
U.S. Services operating profit $ 9,551 $ 6,863
International Services
Operating loss (4,988) (6,485)
Equity in earnings of affiliated company 74 160
Minority interests 115 223
-------- --------
Subtotal - International (4,799) (6,102)
Corporate and other expenses (1,277) (416)
-------- --------
Operating Results $ 3,475 $ 345
======== ========
</TABLE>
In the first quarter of 1998, revenues from the Company's U.S. services
business were $94.6 million, an increase of 10% compared to $86.1 million
for the corresponding 1997 quarter. Operating Results for the Company's
U.S. businesses were $9.6 million in the first quarter of 1998 compared to
$6.9 million for the first quarter of 1997. The 39% increase of U.S.
Operating Results was due to the growth in revenues together with the
benefit of lower expense growth resulting from cost containment initiatives
and the relatively high fixed cost structure of the Company's database
operations.
10
<PAGE> 11
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.
First quarter 1998 revenues from the Company's International businesses
were $24.6 million, an increase of 29% over the corresponding 1997 quarter.
Results in the first quarter of 1998 reflect the consolidation of IRI's
majority-owned operations in the Netherlands, IRI/GfK Retail Services, B.V.,
effective February 1, 1998. Excluding the revenues from the Netherlands and
adjusted for foreign exchange effects, European revenues increased 26%
compared to the first quarter of 1997. International revenue increases were
accomplished despite the depreciation of several foreign currencies against a
strong U.S. dollar. Operating Results for the Company's International
businesses were a ($4.8) million loss in the first quarter of 1998 compared
to a ($6.1) million loss in the corresponding 1997 quarter. The improved
International results were principally due to continuing revenue growth of
the Company's major European services.
11
<PAGE> 12
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.
LIQUIDITY AND CAPITAL RESOURCES
The Company's current cash resources include its $15.1 million
consolidated cash balance and $75.0 million available under the Company's
bank revolving credit facility. The Company anticipates that it will have
sufficient funds from these sources and internally generated funds from its
U.S. operations to satisfy its cash needs for the foreseeable future.
The financial covenants in the bank credit agreement, as well as in the
lease agreement for the Company's Chicago headquarters, require the Company
to maintain a minimum tangible net worth and to meet certain cash flow
coverage and leverage ratios. The agreements also limit the Company's
ability to declare dividends or make distributions to holders of capital
stock, or redeem or otherwise acquire shares of the Company. Approximately
$65.4 million is currently available for such distributions under the most
restrictive of these covenants. The credit agreement contains covenants
which restrict the Company's ability to incur additional indebtedness.
Cash Flow: Consolidated net cash provided by operating activities was
$35.8 million for the three months ended March 31, 1998 compared to $25.0
million for the same period in 1997, primarily due to improved operating
performance and lower working capital investment in 1998. Consolidated cash
used in net investing activities was ($37.8) million in 1998 compared to
($28.4) million for the same period in 1997. Investing activity for the
first quarter of 1998 reflects higher expenditures in the U.S. business for
both data procurement costs and purchases of property and equipment when
compared to the first quarter of 1997. Net cash used before financing
activities was ($2.0) million for the three months ended March 31, 1998 and
($3.3) million for the same period of 1997. Consolidated cash (used)
provided by net financing activities was ($3.4) million for the three months
ended March 31, 1998 compared to $1.2 million for the same period in 1997.
The first quarter of 1998 reflects $3.8 million of purchases of Common Stock
under the stock purchase plan approved by the Company's Board of Directors
in November 1997.
Common Stock Purchase Plan: In November 1997, the Company's Board of
Directors approved a plan to purchase up to two million shares of the
Company's Common Stock from time to time in the open market. Purchases
under the plan are subject to a number of considerations including the
market price of the Company's Common Stock and general market conditions.
Through March 31, 1998, the Company has purchased a cumulative total of
487,000 shares of its Common Stock at an average price of just over $14 per
share. Purchases of Common Stock during the quarter ended March 31, 1998
aggregated 67,600 shares at an average price of $13.36 per share.
Other Deferred Costs and Capital Expenditures: Consolidated deferred
data procurement expenditures were $29.3 million for the three months ended
March 31, 1998 and $25.8 million for the same period in 1997. These
expenditures are amortized over a period of 28 months and include
12
<PAGE> 13
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.
payments and services to retailers for point-of-sale data and other costs
related to collecting, reviewing and verifying other data which are an
essential part of the Company's data base. Such expenditures for the
Company's U.S. services business were $18.9 million and $16.4 million for
the periods ended March 31, 1998 and 1997, respectively, and $10.4 million
and $9.4 million, respectively, for the Company's International services
business.
Management expects to continue the development of its businesses in
Europe, and accordingly, the Company's European operations will continue to
require substantial investment in data procurement costs. Based upon
currently projected Operating Results and cash flows, the Company's
assessment is that the realizability of its International assets is not
impaired. To the extent that actual Operating Results and cash flows are
lower than current projections, the Company may be required to write down a
portion of these assets in future periods.
Consolidated capital expenditures were $6.3 million and $3.2 million
for the three months ended March 31, 1998 and 1997, respectively. Capital
expenditures for the Company's U.S. services business were $5.2 million and
$2.3 million for the three months ended March 31, 1998 and 1997,
respectively, while related depreciation expense was $4.4 million and $4.0
million, respectively. The Company's International services business
capital expenditures were $1.1 million and $.9 million for the three months
ended March 31, 1998 and 1997, while related depreciation expense was $1.1
million and $1.0 million, respectively.
Consolidated capitalized software development costs were $2.3 million
and $1.1 million for the three months ended March 31, 1998 and 1997,
respectively.
NOL Carryforwards: As of December 31, 1997, the Company had cumulative
U.S. Federal net operating loss ("NOL") carryforwards of approximately $70.8
million that expire primarily in 2009 and 2011. At December 31, 1997, the
Company had general business tax credit carryforwards of approximately $9.5
million which expire primarily between 1999 and 2012, and are available to
reduce future Federal income tax liabilities. Certain of these carryforwards
have not been examined by the Internal Revenue Service and, therefore, are
subject to adjustment. In addition, at December 31, 1997, various foreign
subsidiaries of IRI had aggregate cumulative NOL carryforwards for foreign
income tax purposes of approximately $8.9 million which are subject to
various income tax provisions of each respective country. Approximately
$3.3 million of these foreign NOL's may be carried forward indefinitely,
while the remaining $5.6 million expire in 2000 and 2002.
Impact of Inflation: Inflation has slowed in recent years and is
currently not an important determinant of the Company's results of
operations. To the extent permitted by competitive conditions, the Company
passes increased costs on to customers by adjusting sales prices and in the
case of multi-year contracts through consumer price index provisions of such
agreements.
13
<PAGE> 14
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.
Year 2000: The Company has been assessing whether the hardware and
software used in its businesses will function properly in connection with
the transition of dates from 1999 to 2000. Based on its evaluation to date,
management believes that most of the hardware and software used in the
Company's businesses are either now Year 2000 compliant or will become so
prior to midyear 1999 through regular product upgrades and replacements.
Therefore, management currently anticipates that, in connection with
bringing its own hardware and software into compliance, the Company will not
incur material expenditures which would cause the Company's reported
consolidated financial information not to be indicative of future
consolidated operating results or financial condition.
The Company potentially faces Year 2000 compliance issues with certain
of its data vendors and tracking service clients. The Company is currently
developing a plan to ensure that all such hardware and software interfacing
with the Company complies with Year 2000 requirements. The Company believes
that its plans to address Year 2000 concerns are adequate and does not
currently anticipate significant problems with data suppliers and clients on
which the Company's systems rely. If the Company's data suppliers do not
become Year 2000 compliant on a timely basis, delays in the Company's data
delivery to clients may occur. If clients do not become Year 2000
compliant, their ability to utilize the Company's data and services may be
negatively affected. A significant disruption of service, if it were to
occur, could negatively impact the Company's financial performance.
Forward Looking Information: Certain matters discussed herein may
contain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from
those anticipated, including customer renewals of service contracts, the
timing of significant new customer engagements, increased competitive
conditions in Europe, foreign currency exchange rates and other factors
beyond the Company's control. These risks and uncertainties are described
in reports and other documents filed by the Company with the Securities and
Exchange Commission.
14
<PAGE> 15
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit No. Description of Exhibit Page
----------- ----------------------------------------- ----
27 Financial Data Schedule (filed herewith). EF
b. Reports on Form 8-K.
The registrant has not filed any reports on Form 8-K during
the quarter for which this report is filed.
15
<PAGE> 16
INFORMATION RESOURCES, INC. AND SUBSIDIARIES
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.
INFORMATION RESOURCES, INC.
---------------------------
(Registrant)
/s/ Gary M. Hill
-----------------
Gary M. Hill
Executive Vice President
and Chief Financial Officer
(Authorized officer of Registrant and
principal financial officer)
/s/ John P. McNicholas, Jr.
----------------------------
John P. McNicholas, Jr.
Senior Vice President and Controller
(Principal accounting officer)
May 14, 1998
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 15,094
<SECURITIES> 0
<RECEIVABLES> 104,910
<ALLOWANCES> (3,651)
<INVENTORY> 0
<CURRENT-ASSETS> 124,150
<PP&E> 184,159
<DEPRECIATION> (114,703)
<TOTAL-ASSETS> 368,864
<CURRENT-LIABILITIES> 102,342
<BONDS> 438
0
0
<COMMON> 287
<OTHER-SE> 242,247
<TOTAL-LIABILITY-AND-EQUITY> 368,864
<SALES> 0
<TOTAL-REVENUES> 119,190
<CGS> 0
<TOTAL-COSTS> 104,369
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 304
<INCOME-PRETAX> 3,195
<INCOME-TAX> 1,400
<INCOME-CONTINUING> 1,910
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,910
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
