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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended November 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 2-91525-NY
MARKET GUIDE INC.
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(Exact name of Registrant as specified in its charter)
New York 11-2646081
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2001 Marcus Avenue
Suite South 200
Lake Success, New York 11042-1011
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (516) 327-2400
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- --------------------------------------------------------------------------------
(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 reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
4,188,256 Common shares, $.001 par value were issued and outstanding on November
30, 1995.
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TABLE OF CONTENTS
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Financial Statements
Balance Sheets as of November 30, 1995 (Unaudited)
and February 28, 1995 3
Statement of Operations For the Nine Months
and the Three Months Ended November 30, 1995
(Unaudited) and November 30, 1994 (Unaudited) 5
Statement of Cash Flows for the Nine Months Ended
November 30, 1995 (Unaudited) and November 30, 1994
(Unaudited) 6
Notes to Financial Statements November 30, 1995 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations November 30, 1995 8
Other Information 17
Signature 18
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<TABLE>
<CAPTION>
BALANCE SHEETS Market Guide Inc.
Period Ended November 30, 1995 February 28, 1995
(Unaudited)
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<S> <C> <C>
ASSETS
Current assets:
Cash $ 519,050 $ 695,135
Accounts Receivable 895,324 558,813
Prepaid expenses and other 204,080 89,892
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Total current assets 1,618,454 1,343,840
Property, plant and equipment:
Furniture and equipment 581,957 494,434
Equipment held under capital leases 434,961 296,672
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1,016,918 791,106
Less: accumulated depreciation and
amortization (including amortization of
$131,854 as of November 30, 1995 and
$84,002 as of February 28, 1995,
respectively, on capital leases) 461,294 364,313
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Net property, plant and equipment 555,624 426,793
Other assets:
Computer Software and Product
Development (Net of Amortization) 915,238 732,247
Deposits and other assets 109,833 100,217
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Total other assets 1,025,071 832,464
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Total assets $3,199,149 $2,603,097
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<TABLE>
<CAPTION>
BALANCE SHEETS-continued Market Guide Inc.
Period Ended November 30, 1995 February 28, 1995
(Unaudited)
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<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
and capital leases (including related party
debt of 95,333 as of November 30, 1995
and $95,333 as of February 28, 1995) $ 182,816 $ 158,025
Unearned revenues 175,401 202,866
Accounts payable and other accrued
expenses (including accrued interest of
$61,987 as of November 30, 1995
and $61,987 as of February 28, 1995) 276,760 215,998
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Total current liabilities 634,977 576,889
Non-current liabilities:
Long-term debt and capital lease
obligations, less current maturities 270,821 182,737
----------- -----------
Total non-current liabilities 270,821 182,737
Commitments -0- -0-
----------- -----------
Total liabilities 905,798 759,626
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Stockholders' equity:
Common stock - $.001 par value;
20,000,000 shares authorized,
4,188,256 shares issued and
outstanding (Restated as per Note 1) 4,188 4,113
Capital in excess of par value 3,618,910 3,521,405
(Restated as per Note 1)
Accumulated deficit (1,329,747) (1,682,047)
----------- -----------
Total stockholders' equity 2,293,351 1,843,471
----------- -----------
Total liabilities and stockholders' equity $ 3,199,149 $ 2,603,097
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<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS Market Guide Inc.
For the Nine Months Ended For the Three Months Ended
November 30, 1995 November 30, 1994 November 30, 1995 November 30, 1994
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Database vendor $2,670,668 $1,689,242 $ 969,762 $ 597,388
Market Guide products 204,656 146,735 77,463 38,653
Print products 48,722 56,097 15,899 18,880
---------- ---------- ---------- ----------
Total revenues 2,924,046 1,892,074 1,063,124 654,921
Expenses:
Salaries, payroll taxes and
employee benefits 1,586,121 992,861 542,683 336,292
Database and product costs 396,953 326,032 129,243 114,977
General and administrative 481,248 286,194 177,794 109,140
Advertising and promotion 65,303 39,808 22,471 12,686
---------- ---------- ---------- ----------
Total expenses 2,529,625 1,644,895 872,191 573,095
---------- ---------- ---------- ----------
Income from operations 394,421 247,179 190,933 81,826
Interest expenses, net 18,473 4,295 6,153 574
---------- ---------- ---------- ----------
Income before Income tax 375,948 242,884 184,780 81,252
Income Taxes 23,649 13,880 11,087 4,263
---------- ---------- ---------- ----------
Net income $ 352,299 $ 229,004 $ 173,693 $ 76,989
========== ========== ========== ==========
Earnings per share (Restated as
per Note 1) $ .09 $ .06 $ .04 $ .02
Weighted average number of
shares outstanding (Restated
as per Note 1) 4,157,912 4,037,268 4,182,802 4,087,259
Fully diluted earnings
per share (Restated as
per Note 1) $ .08 $ .05 $ .04 $ .02
Fully diluted weighted average
number of shares outstanding
(Restated as per Note 1) 4,398,476 4,241,318 4,409,171 4,291,309
</TABLE>
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<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS Market Guide Inc.
November 30, 1995 November 30, 1994
For the Nine Months Ended (Unaudited) (Unaudited)
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 352,299 $ 229,004
--------- -----------
Adjustments to reconcile net income net (loss) to
net cash provided by operating activities
Depreciation and Amortization 264,796 176,477
Changes in Assets and Liabilities:
(Increase)/Decrease in accounts receivable (336,511) (110,358)
(Increase)/Decrease in prepaid assets (114,188) (139,699)
(Increase)/Decrease in other assets (9,616) (87,327)
Increase/(Decrease) in accounts payable 60,762 (15,196)
Increase/(Decrease) in unearned revenues (27,465) (41,236)
--------- -----------
Total Adjustments (162,222) (217,339)
--------- -----------
Net Cash provided by Operating Activities $ 190,077 $ 11,665
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of fixed assets $(225,812) $ (306,426)
Capitalization of Computer Software (350,806) (271,290)
--------- -----------
Net Cash provided by Investing Activities $(576,618) $ (577,716)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for notes payable and capital leases $ (66,656) $ (44,594)
Proceeds from capital leases 179,532 249,187
Proceeds from Employee Stock Plan 64,129 39,187
Proceeds from private placement of common stock 12,772 853,370
Proceeds from stock options exercised 20,679 -0-
--------- -----------
Net Cash provided by Financing Activities 210,456 1,097,150
--------- -----------
Net increase/(decrease) in cash (176,085) 531,099
Cash at beginning of period 695,135 200,540
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Cash at end of period $ 519,050 $ 731,639
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Market Guide Inc.
Notes to Financial Statements
November 30, 1995
Note 1 Reverse Stock Split
On August 31, 1995, the shareholders approved a one-for-four reverse stock split
of the Company's $.001 par value common stock. The reverse stock split was
implemented as of October 16, 1995. All references in the accompanying financial
statements to the per share amounts and earnings per share have been restated to
reflect the reverse stock split for all periods presented.
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Market Guide Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operation
November 30, 1995
GENERAL
This analysis of the Company's financial condition, capital resources and
operating results should be viewed in conjunction with the accompanying
financial statements.
BACKGROUND
Market Guide Inc. was incorporated in the State of New York on March 23, 1983 as
"The Unlisted Market Service Corporation." On September 3, 1986 the current
corporate name was adopted.
The Company acquires, condenses and publishes accurate, timely, and objective
financial and other information on publicly traded corporations, and markets
this information to the financial and investment communities, as well as to
independent investors, in a cost effective manner.
The Market Guide Database covers over 7,000 companies trading on the New York,
American, Nasdaq and Over-the-Counter Stock Exchanges. All reports created by
Market Guide Inc. are derived from information filed by the subject company with
the Securities and Exchange Commission and are contained in Annual Reports to
shareholders, issued in press releases or carried in other media reports. Each
company's information is updated at least four and often more than eight times
each year, as soon as the relevant information becomes available. Pricing and
trading volume information incorporated into the database are updated weekly,
and short interest statistics are updated monthly.
Market Guide adds value, distinguishes itself from the competition, and serves
its clients through its:
- - Flexible database design which gives users important insights not
available in competitive databases, thereby enabling them to make
better informed investment decisions;
- - Inclusion of auxiliary information such as price performance, relative
price performance, summary insider and institutional ownership
statistics, and short interest statistics giving users a complete
perspective on each company;
- - Calculation of approximately 500 popular financial ratios, growth
rates, and averages computed for the user's convenience;
- - Carefully planned, market tested display formats, including company to
industry comparisons, that allow users to quickly and efficiently make
carefully considered investment decisions; and
- - The creation of software that enables institutional and individual
investors to easily access and manipulate the Market Guide information.
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The targeted markets for Market Guide's data and related products include
investment managers, investment research departments, financial planners,
investment counselors, investment bankers, banks, stockbrokers and brokerage
firms, traders, libraries, publications, corporations, law firms and individual
investors. The Company sells its information through four channels: information
vendors, its proprietary analytic software called Market Guide for Windows(TM)
and StockQuest(TM), and a print publication.
Market Guide works in partnership with financial information service vendors.
The financial information service vendors combine data from various real-time
and historical information sources with their own analytic software and data
delivery capability. Their sales forces sell the product and they also provide
customer training and support services. Market Guide focuses on developing the
highest quality information and leveraging off the information vendor's sales
force, software, information dissemination infrastructure and customer base. The
amount of data presented, its display format, and the software's analytic
capabilities vary depending upon the way each information provider defines its
customers' needs, software capabilities, distribution technologies and preferred
pricing strategies.
The information service vendors that currently distribute the Market Guide
Database include: Accutrade; American Association of Individual Investors;
Aufhauser; Automatic Data Processing; AIQ Systems, Inc.; Bridge Information
Systems Inc.; Charles Schwab and Company; Dow Jones Telerate; First Call
Corporation; Global Market Information; ILX Systems Inc.; Instinet Analytics;
Interactive Data Corporation; InvesText; Omega Research, Inc.,; OneSource
Information Systems, Inc.; P.C. Quote, Inc.; Prodigy Services Company; Quotron
Systems, Inc.; Real Time Quotes, Inc.; Securities Data Corporation; Shark
Information Services, Inc.; Telemet America, Inc.; Telescan, Inc.; Track Data
Corporation and Vickers Stock Research Corporation. Through InvesText the Market
Guide Database is also available on Datext, Dialog, Dow Jones News Retrieval
Service, Reed-Elsevier's Lexis/Nexis (formerly Mead Data Central) and Newsnet.
OneSource Information Systems, Inc. has multiple CD-ROM based product lines that
have different software capabilities and serve different marketplaces. The
Market Guide Database is the only database that we are aware of that is
available on three OneSource product lines, CD/Corporate, CD/Notes and
CD/Investment.
On December 28, 1993 it was announced that Prodigy Services Company had reached
an agreement with the Company to incorporate selected items from the Market
Guide Database for use in Prodigy's Strategic Investor product.
In January, 1995 Prodigy introduced a completely revised and greatly enhanced
Company Reports and a new "Stock Hunter" search capability that features eight
predesigned screens utilizing recognized investment theories such as CANSLIM,
One up on Wall Street, Graham and Dodd, Wallflowers and others. There is also a
"Personal Search" feature enables a user to conduct a self designed screen
search of Market Guide data using six pre-selected criteria. All these Prodigy
products are created from Market Guide information and incorporate earnings
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estimates from Zack's Investment Services. The Zacks information is first sent
to Market Guide, integrated with our own information and sent to Prodigy as an
integrated data feed. Company Reports, Stock Hunter and Personal Search may be
accessed by any Prodigy subscriber for a modest per access fee, or are available
to Strategic Investor users as part of their monthly subscription.
In August, 1995 the Company announced an agreement with the American Association
of Individual Investors (AAII) whereby AAII will incorporate Market Guide's
information in their existing screening software known as Stock Investor. AAII
is an educational not for profit corporation with approximately 110,000 members,
a small percentage of whom subscribe to Stock Investor. Market Guide's
information first appeared with Stock Investor's regular quarterly update in
November.
Market Guide derives significant revenue from its reference service available on
the quote terminals of vendors such as Automatic Data Processing; Bridge
Information Systems; ILX Systems, Inc.; P.C. Quote, Inc.; Quotron Systems Inc.;
Shark Information Services, Inc.; Telemet America, Inc.; and Track Data
Corporation. In January, 1994 this service, called the Market Guide Database for
Brokers, Traders and Portfolio Managers, was expanded from six screenfuls to ten
screenfuls of information. Among the changes and new information are:
- - Every ratio is calculated off the latest quarterly or trailing twelve
months value as appropriate;
- - Inclusion of a company to industry to market comparison that details
the company's performance on popular measures of profitability, growth,
financial strength and valuation;
- - Summarized quarterly income statements, balance sheets and statements
of cash flows;
- - Price performance and relative price performance statistics; and
- - Current and historical short interest levels.
Market Guide has developed an analytic software package, Market Guide for
Windows(TM), that allows users to search the database, develop user defined
reports and download information to popular spreadsheet software packages. The
software is not patented or trademarked, but a copyright is claimed by the
Company. Market Guide for Windows(TM) is delivered on a CD/ROM.
Market Guide for Windows(TM) was introduced this quarter and existing Market
Screen users have been converted over to using Market Guide for Windows(TM).
Market Screen has now been discontinued.
The same Market Guide for Windows(TM) software with a smaller information set
will be sold to individual investors under the name StockQuest(TM), and
delivered to them electronically. StockQuest(TM) is scheduled to be introduced
in the third fiscal quarter of this year.
A quarterly print product called The Market Guide - Select Over the Counter
Stock Edition is
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a single volume of 800 one-page reports on fast growing, profitable
over-the-counter companies. The book also has a detailed company index listing
15 key statistics on each company in a tabular format. This index is very useful
to investors searching for attractive investment opportunities.
Market Guide attempts to provide continuity of coverage so that subscribers to
the book can keep following companies in which they have an interest. However,
from time-to-time the companies covered do change. The most common reasons for
deletion of coverage are:
- - The company has been acquired in a merger or a leveraged buyout;
- - The company has not filed a financial statement with the Securities and
Exchange Commission for two or more reporting periods;
- - The company has exhibited significant deterioration in its financial
condition;
- - The company has been deleted from the National Association of Security
Dealers Automatic Quotation System (Nasdaq) and has fewer than three
Market Makers;
- - The company now trades on the New York or American Stock Exchange, and
no longer qualifies for the OTC edition.
Companies dropped from the book are replaced by companies which are selected by
using proprietary Market Guide selection criteria. The companies in the book
have regularly outperformed the Nasdaq composite.
The Company continuously expands, enhances and improves the Market Guide
Database based on customer suggestions and employee feedback. In 1988 the
Company added the New York and American Stock Exchange companies to its then
current universe of Nasdaq and "pink sheet" companies.
In 1990 Market Guide decided to expand the database to include complete detailed
quarterly financial statements. The Company engaged in a series of dialogues
with current or potential vendors and customers to determine the market
potential, to identify the Company's perceived strengths and weaknesses, and to
research market needs and the appropriateness of the Company's methodologies and
objectives. The results of this analysis were the commitment of resources to
more than double the amount of information collected and maintained on each
subject company. In fiscal years 1990, 1991 and 1992 the Company added the
Annual Statement of Cash Flows and complete Quarterly Income Statements, Balance
Sheets and Statements of Cash Flows on all the companies in the database. This
has allowed Market Guide to serve new markets and to bid on services for which
Market Guide did not previously qualify.
In 1993, the Company entered a redistribution agreement with Zack's Investment
Research. Under the terms of this agreement, Market Guide may, after consulting
Zacks on a case-by-case basis, redistribute Zacks' Earnings Estimate information
to selected vendors.
In late 1993, the Company began to track short interest information published
monthly by the exchanges.
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In fiscal 1994 the Company added 1,000 new companies. After adjusting for the
shrinkage of 400 companies due to acquisitions, buyouts, mergers or business
failures, this resulted in a net increase of 600 companies.
In early 1994 the Company began subscribing to and processing the Securities and
Exchange Commission's (SEC's) Electronic Data Gathering Analysis and Reporting
(EDGAR) service. This has given our analysts access to source documents (10-Ks,
10-Qs, etc.) ten days to two weeks earlier than in previous years. This has
resulted in record levels of timeliness measures for the Market Guide Database.
In the fall of 1994 Market Guide introduced completely new industry and sector
classifications that reflect the current economy and are being incorporated into
all of Market Guide's products.
These new industry and sector classifications will help investors:
- - Identify which industry and sectors are outperforming the market or
have fallen from favor;
- - Compare companies to a well defined peer group;
- - Permit investors to construct and analyze industry aggregate
financial characteristics;
- - Properly construct portfolios to ensure adequate diversification; and
- - Make well reasoned asset allocation decisions.
In October, 1994 the Company relocated to new headquarters in Lake Success, New
York. Lake Success is on the Queens (New York City) - Nassau County (Long
Island) border, and is closer to New York City than our previous location. The
new facility, at approximately 13,500 square feet, is three times larger than
our former quarters, and is equipped with state of the art network and digital
telephone technology to support current and future needs in the evolving
"information super highway" and "multi-media" environments. Its proximity to New
York City brings the Company closer to one of its largest markets and also opens
up a much larger labor pool from which to draw the talent needed to support
company growth.
The new address, phone and facsimile numbers are:
Market Guide Inc.
2001 Marcus Avenue
Suite South 200
Lake Success, New York 11042-1011
Phone (516) 327-2400
Fax (516) 327-2425
In September, 1995 the Company announced shareholder approval of a
one-for-four reverse stock split at its August 31, 1995 annual meeting. The
reverse split became effective October 16, 1995, and will allow the Company to
meet one of the major qualification criteria for inclusion on the Nasdaq "Small
Cap" market. The one-for-four reverse stock split has
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reduced the Company's issued and outstanding shares from 16,753,023 to
4,188,256. Fully diluted shares outstanding was decreased from 17,636,682 to
4,409,171 shares. The number of authorized shares will remain at 20,000,000.
At the same annual meeting, shareholders also approved an employee stock
purchase plan, a key employee incentive plan and an outside directors' incentive
plan. These plans are currently being put into effect.
The Company has begun work on an internet site that should be operational in the
first quarter of fiscal 1997. It is anticipated that this site will broaden the
Company's ability to sell and service its products directly to end users.
RESULTS OF OPERATIONS
Total revenues for the fiscal quarter and nine months ending November 30, 1995
were $1,063,124 and $2,924,046, respectively. These represent 62.3% and 54.5%
increases over the same periods in the previous year. Net income for the fiscal
quarter and nine months ended November 30, 1995 were $173,693 and $352,299,
respectively. These represent 125.6% and 53.8% increases over the same periods
in the previous year.
Revenues
Database vendor revenues for the fiscal quarter and nine months ending November
30, 1995 were $969,762 and $2,670,668. These represent 62.3% and 58.1% increases
over the same periods in fiscal 1994. The increase is mainly from increased
sales of information by the Company's vendors, as well as the addition of new
vendors, the most significant of which is Prodigy Services Co. The Company now
has a total of 26 vendors selling a variety of the Company's database offerings.
Revenues of Market Guide products for the fiscal quarter and nine months ending
November 30, 1995 were $77,463 and $204,656, respectively. These represent
100.4% and 39.5% increases over the same periods in fiscal 1994. Market Guide
products include Market Screen, the new Market Guide for Windows(TM) CD/ROM
based product targeted at institutional investors, and the direct sales of
Market Guide products delivered through a real time quote and analytics vendor.
These increased revenues reflect both some initial Market Guide for Windows(TM)
sales and increased direct sales of products delivered through the quote vendor.
Print product revenues from The Market Guide - Select OTC Stock Edition declined
slightly to $15,899 from $18,880 and to $48,722 from $56,097 for the three and
nine month periods ending November 30, 1995, respectively. This decline is
attributed to the Company's continued concentration on the development and
marketing of electronic products.
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Expenses
Total expenses for the fiscal quarter ending November 30, 1995 increased to
$872,191 from $573,095 in the same quarter of 1994, and to $2,529,625 from
$1,644,895 for the nine months ending November 30, 1995.
Significant changes are noted in the following areas of the Company's Statement
of Operation and Accumulated Deficit.
Salaries, payroll taxes and employee benefits for the fiscal quarter ending
November 30, 1995 increased to $542,683 from $336,292 in the same quarter of
1994, and to $1,586,121 from $992,861 for the nine months ending November 30,
1995. The Company hired sales, marketing, analysts and programming people and
grew from 32 employees last year to 56 at November 30, 1995. There were 14
employees in 1989 when current management assumed control and operation of the
Company.
Database and product costs for the fiscal quarter ending November 30, 1995
increased to $129,243 from $114,977 in the same quarter of 1994, and to $396,953
from $326,032 for the nine months ending November 30, 1995. The increase
reflects costs associated with printing out a greater number of financial
documents from electronic sources of information, in particular the EDGAR
filings, and greater amortization expense.
General and administrative expenses for the fiscal quarter ending November 30,
1995 increased to $177,794 from $109,140 in the same quarter of 1994, and to
$481,248 from $286,194 for the nine months ending November 30, 1995. Included in
these increases are the substantial increase in rent expense under the new
lease, higher depreciation, phone and other expenses.
Advertising and promotion expenses for the fiscal quarter ending November 30,
1995 increased to $22,471 from $12,686 in the same quarter of 1994, and to
$65,303 from $39,808 for the nine months ending November 30, 1995. This modest
increase reflects greater trade show participation, marketing and sales
programs.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities for the nine months ending November 30,
1995 totalled $190,077 versus $11,665 in the quarter ending November 30, 1994,
primarily due to higher net income and depreciation expenses and an increase in
accounts payable, offset by an increase in accounts receivable.
Cash Flows from Investing Activities decreased to ($576,618) in the quarter
ending November 30, 1995, compared to ($577,716). The Company continues to
invest in product enhancements that will result in added value to our users and
the strengthening of our competitive position, and additional equipment to
support new products and increase the efficiency of our data collection staff.
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Cash Flows from Financing Activities generated $210,456 mainly from the issuance
of an employee stock bonus valued at $64,129 and proceeds from capital leases of
$179,532. The Company paid off debt and capitalized lease obligations of $66,656
compared to payments of $44,594 in the same period of 1994.
The Company's financial condition achieved a sixth consecutive year of steady
improvement. This has been achieved by carefully controlling expenses, investing
in product development and generating increased revenues.
As of November 30, 1995 the Company had $519,050 in cash. Its working capital
increased from $766,951 as of February 28, 1995 to $983,477 as of November 30,
1995. The major factors contributing to the improvement were the increased
sales leading to increased accounts receivables, increased prepaid expenses and
lower unearned revenues.
Stockholders' equity continues its steady improvement from $1,843,471 on
February 28, 1995 to $2,293,351. Equity continues to improve due mainly to
reinvestment of earnings in the business and issuance of the final installment
of the employee stock bonus awards.
In June, 1995 the Company entered into a five year lease with Guardian Leasing
Corporation for $179,532 of which $138,289 is the value of the equipment
purchased, and $41,243 represents interest. The lease covers the acquisition of
office furniture and computer equipment for networks.
The Company currently has four leases outstanding aggregating $358,304 as of
November 30, 1995, and pays a total of $8,513.32 per month to service these
obligations.
Other than capital leases for computers, business machinery, business premises
and furnishings, the Company's debt consists of two notes owed to the Company's
Chairman. One demand note is for the principal amount of $62,000 and one demand
note is for the principal amount of $33,333. There is a total of $61,987 in
accrued interest on these notes. The notes and accrued interest are at a 12%
rate of interest. No notes are convertible to common stock.
In March, 1994 the Company issued 2,275,719 new shares of restricted Common
Stock at a price of $0.375 per share. The purchasers of the stock consist of a
small group of sophisticated private investors who approached the Company and
indicated a desire to make the investment. The placement was managed entirely by
the Company with all of the $853,370 in proceeds going to the Company. The
proceeds of the placement were used to fund the growth of the Company, to defray
some of the costs incurred in the move of the Company's headquarters and for
general corporate purposes.
In fiscal year 1996 management anticipates capital spending of $500,000 for
database enhancements, software development and the development of a presence on
the Internet.
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The Company's traditional marketplaces, including professionals involved in
brokerage, trading and money management has been steadily increasing. In 1993,
the Company brought its professional quality information to individual investors
through an agreement for electronic distribution with Telescan, Inc. The
Telescan relationship has been expanded several times to bring more value, data
and utility to Telescan subscribers. Our relationship with Telescan also led to
the availability of Market Guide reports for individuals to access through
Charles Schwab's Street Smart product. As a direct result of the most recent
broadening of this agreement, Market Guide and Telescan have agreed to work
together more closely and to integrate Market Guide information as part of the
standard Telescan service.
The advent of Market Guide's availability on Prodigy makes it possible for any
of the Prodigy service's two million subscribers to obtain reports or conduct
basic analytic stock searches using Market Guide data. The many thousands of
Strategic Investor subscribers on the Prodigy Network have been generally
positive and supportive of the added data and broadened coverage that Market
Guide's Company Reports provide to them.
Market Guide continues to invest for its future growth. The Company is adding
analytic staff to be able to cover all publicly traded companies (except closed
end funds) and maintain them with the same high levels of accuracy and
timeliness; programmers develop new products; and additional sales and marketing
staff to increase our sales levels.
Management expects to be able to meet all anticipated, ongoing operating cash
requirements from operating cash flows because:
- - Revenues from existing vendors continue to grow;
- - New vendors such as Prodigy and the American Association of Individual
Investors (AAII) have recently introduced the Market Guide service with
great acceptance which should generate significant revenues; and
- - Revenues from new Market Guide products, Market Guide for Windows(TM)
introduced in the third fiscal quarter of this year, and StockQuest(TM)
to be introduced in the first fiscal quarter of fiscal 1997 are
expected to generate significant revenues next year.
16
<PAGE> 17
OTHER INFORMATION
<TABLE>
<S> <C> <C>
Item 1 Legal Proceeding None
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to Vote of Security Holders None
Item 5 Exhibits and Reports on Form 8-K None
</TABLE>
17
<PAGE> 18
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 thereunto duly authorized.
MARKET GUIDE INC.
(Registrant)
January 11th, 1996 /s/ HOMI M. BYRAMJI
- --------------------------- ----------------------------------
Date HOMI M. BYRAMJI
President and Chief Executive Officer
18
<PAGE> 19
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------ -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
STATEMENT OF FINANCIAL CONDITION AT 11/30/95 (UNAUDITED) & STATEMENT OF INCOME
FOR NINE MONTHS ENDED 11/30/95 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 19,050
<SECURITIES> 0
<RECEIVABLES> 895,324
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,618,454
<PP&E> 1,016,918
<DEPRECIATION> 461,294
<TOTAL-ASSETS> 3,199,149
<CURRENT-LIABILITIES> 634,977
<BONDS> 270,821
0
0
<COMMON> 4,188
<OTHER-SE> 2,293,351
<TOTAL-LIABILITY-AND-EQUITY> 3,199,149
<SALES> 2,924,046
<TOTAL-REVENUES> 2,924,046
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,529,625
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,473
<INCOME-PRETAX> 375,948
<INCOME-TAX> 23,649
<INCOME-CONTINUING> 352,299
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 352,299
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
