<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED
FEBRUARY 29, 1996 COMMISSION FILE NUMBER: 291525-NY
- -----------------
MARKET GUIDE INC.
NEW YORK 11-2646081
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2001 MARCUS AVENUE, SUITE SOUTH 200, LAKE SUCCESS, NEW YORK 11042-1011
(Address of Principal Executive Offices)
(516) 327-2400
(Registrant's Telephone Number, Including Area Code)
NONE
(Securities Registered Pursuant to Section 12(b) of the Act)
NONE
(Securities Registered Pursuant to Section 12(g) of the Act)
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
--- ---
As of May 17, 1996, the aggregate market value of the voting stock held by
non-affiliates, 2,690,346 shares of Common Stock, $.001 par value, was
$9,416,211 based on the approximate bid price of $3.50 for one share of Common
Stock on such date.
The number of shares outstanding of the issuer's Common Stock, as of May 17,
1996 was 4,188,245.
<PAGE> 2
PART I
ITEM 1: BUSINESS
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 7,300 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 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 a
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 earnings estimates, 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; and
- - Carefully planned, market tested display formats, including company to
industry comparisons, that allow users to quickly and efficiently make
carefully considered investment decisions.
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 three channels:
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information vendors, its proprietary analytic software called Market Guide for
Windows 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; Argus
Research; Aufhauser; Automatic Data Processing; AIQ Systems, Inc.; Bridge
Information Systems Inc.; CDA Technology; Charles Schwab and Company; Dow Jones
Telerate; First Call Corporation; Global Market Information; Holt Value
Associates; 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; Trans-Terra Company and
Vickers Stock Research Corporation.
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.
During the 1993 and 1994 fiscal years AIQ Systems, Inc., Dial Data, Dow Jones
Telerate, First Call Corporation, Instinet Analytics, and Interactive Data
Corporation began distributing the Market Guide information.
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 which enables users 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 earnings 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.
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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, 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 is delivered on a CD/ROM with weekly or monthly
updates.
Market Guide for Windows was introduced in fiscal year 1996 and existing Market
Screen users have been converted over to Market Guide for Windows. Market Screen
has now been discontinued.
The same Market Guide for Windows software with a smaller information set will
be sold to individual investors under the name StockQuest, and delivered to them
electronically. StockQuest is scheduled to be introduced in the second quarter
of fiscal year 1997.
A quarterly print product called The Market Guide - Select Over the Counter
Stock Edition is 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:
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- - 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.
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.
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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.
The Company has completed development of a historical pricing database to
complement the financial information it has compiled. The pricing database
contains both historical and current information for all issues trading on the
New York and American stock exchanges, the Nasdaq stock market, and selected OTC
Bulletin Board Companies. The Market Guide pricing database contains Open, High,
Low, Close and Volume information on a daily basis beginning in 1986, with daily
updates occurring each trading day.
In order to satisfy institutional investors' needs for extensive historical
financial information, Market Guide increased the number of years of historical
annual financial statements in the Market Guide database. With the culmination
of the Big Ten project, Market Guide now has annual financial statement going
back to 1983 for most companies on its database. As a result of the Big Ten
project, Market Guide is now able to compete for other business where at least
ten years of historical data is required. The information is currently being
distributed within the OneSource US Equities product.
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 will bring the Company closer to one of its largest markets and will
also open up a much larger labor pool from which to draw the talent needed to
support company growth.
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.
At the same annual meeting, shareholders also approved an Employee Stock
Purchase Plan, a Key Employee Incentive Plan and an Outside Directors' Incentive
Plan. The Employee Stock Purchase Plan was put into effect on September 1, 1995.
The incentive plans are currently being put into effect.
The Company has begun work on an Internet site that should be operational in the
second 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.
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REVENUE SOURCES
Market Guide revenues are derived from three sources: Third party vendors
contribute approximately 92%; Market Guide for Windows customers account for
approximately 6%; and print product sales generate approximately 2% of revenue.
Each independent vendor has defined its own service, and generally sells its
service to professionals involved in the investment, banking and business
communities or to individual investors. Royalty structures are determined
differently for each vendor depending on the volume of data used; whether the
information is presented as a reference or analytic source; the frequency of
updates; the degree of customization required to service the vendor's needs; and
the marketplace served by each vendor. Market Guide for Windows and print
product sales are, generally, prepaid annual subscriptions.
The Company derives approximately sixty percent of its revenue from its five
largest information vendors. The diminution or loss of revenues from any of
these vendors could significantly impact the Company's profitability. The
Company continues to reduce its dependency on any single vendor by distributing
its information through an increasing number of vendors and creating its own
products (Market Guide for Windows and the Internet service) in order to
diminish its reliance on vendors in general.
COMPETITION
The investment and financial information industry is highly competitive with
many different firms serving the industry's needs. There are numerous print and
electronic publishers of information for the investment community, most of whom
have been in business longer, are better known and whose financial resources
exceed those of this Company. Among the better know competitors are: Standard &
Poor's, Moody's, Value Line and Disclosure.
The Company believes that it is distinguished from some of the competition as it
publishes one of the largest databases of investment quality information. Market
Guide also competes by providing a database structure that preserves
distinctions that help users make better informed decisions and through the
effective use of technology that enables the Company to be a price leader.
One of the most significant distinctions is that Market Guide stores and
displays company financials in the same "company specific line item description"
format used by the subject company in its SEC filings. "Company specific line
item description" means that the line item terminology assigned to Income
Statement, Balance Sheet or Statement of Cash Flow values is the same as that
used by the company in its official report. For example, "Aircraft Fuel" and
"Landing Fees" may be shown for an airline company; "Newsprint" and "Postage"
for a newspaper publisher. This allows users to project the impact of external
events such as changes in the price of oil, paper or postage on the
profitability of a company. Competitive databases consolidate these items under
general headings such as "Costs of Goods Sold."
The principal methods of competition between the companies engaged in the
historical financial information business are: timeliness of database updating;
accuracy of data; size of the universe presented; depth of coverage of each
company in the universe; number of years of coverage;
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methods of delivery to the end user; the inclusion of analysis or opinion;
customer/vendor support and price.
PERSONNEL
The Company currently employs 58 full-time personnel, up from 43 at the end of
fiscal 1995. The increased hiring contributed to the growth in the sales and
marketing, MIS and research departments.
ITEM 2: PROPERTIES
In October, 1994 the Company moved its entire data collection operation and
management offices to 2001 Marcus Avenue, Suite South 200, Lake Success, New
York 11042-1011. The new space, in a modern three floor office building is
approximately 13,500 square feet, tripling the space formerly available to the
Company. Management negotiated a total renovation of the new space and created a
state-of-the-art facility designed to accommodate both current needs and future
growth and expansion.
In Management's opinion the layout, design, construction and furnishing of the
new facility will support the growth of the Company. The telephone, data
network, lighting and electrical support systems designed into the new facility
create a pleasant, professional and comfortable environment in which our
employees can efficiently perform their tasks effectively.
The productive capacity of the new facility allows for the expansion of the
Company's data collection capacities in a more rapid and efficient manner, as
well as to increase the number of companies in the database and the amount of
information collected on each subject company.
The new facility has allowed the Company to acquire the services of several
additional sales and marketing personnel with space designated and furnishings
in place for additional persons in the fields of marketing, sales and customer
support.
The new facility contains specifically constructed spaces for the Company's
extensive computer and programming activities. Space exists for the expansion
and support of current and anticipated on-line services, vendor delivery, and
Internet services.
The facilities created to support the Company's analyst staff has allowed for a
doubling in staff dedicated to the updating and maintenance of the Market Guide
database. Network redundancy and doubled capacity for computer terminal
placements have been designed and built in to this vital activity area.
Management believes that the new facility's design, utility and appearance will
support the Company's growth and will enable the Company to greatly expand
support of existing lines of business as well as develop new venues for
delivering the Company's products and services.
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ITEM 3: LEGAL PROCEEDINGS
Management is unaware of any significant legal proceedings by or against the
firm.
ITEM 4: SUBMISSION OF MATTERS FOR A VOTE OF SECURITY HOLDERS
None.
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's Common Stock trades on the OTC Bulletin Board under the symbol
MARG. The table below sets forth, for the fiscal periods shown, the high and low
closing prices for the Common Stock as reported by a brokerage firm active in
the shares of the Company's Common Stock (as adjusted for the one-for-four
reverse stock split in October 1995). On May 17, 1996, the last reported sale
price of the Common Stock as reported on the OTC Bulletin Board was $3.50 per
share.
<TABLE>
<CAPTION>
FISCAL 1995 HIGH LOW
-------------------------------------------------
<S> <C> <C>
First Quarter 2 3/4 1 1/2
Second Quarter 3 1 1/2
Third Quarter 3 1 7/8
Fourth Quarter 3 3/4 1 5/8
FISCAL 1996 HIGH LOW
-------------------------------------------------
First Quarter 4 1/4 2 19/32
Second Quarter 4 2 19/32
Third Quarter 5 3/4 3
Fourth Quarter 5 7/8 4
</TABLE>
On May 17, 1996 there were 383 holders of record of the Common Stock of the
Company. The Company estimates the number of beneficial owners of the Company's
Common Stock on May 17, 1996 to be 500.
The Company has never paid a cash dividend on its Common Stock. The Board of
Directors currently intends to retain all earnings to finance the expansion of
the Company's business and does not anticipate paying cash dividends in the
foreseeable future.
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ITEM 6: SELECTED FINANCIAL DATA
The following is selected financial data only, and is qualified by the Financial
Statements, in their entirety, which are set forth elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
SUMMARY OPERATING DATA
Fiscal Year Ended February 29, February 28, February 28, February 28, February 29,
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total Revenues (1) $3,999,759 $2,687,950 $2,001,118 $1,614,527 $1,244,934
Net Income 507,179 338,438 248,202 51,094 105,538
Earnings Per
Share (2) .12 .08 .07 .01 .03
Weighted Average
Number of Shares
Outstanding 4,165,457 4,052,950 3,505,141 3,505,141 3,273,447
</TABLE>
SUMMARY BALANCE SHEET DATA
<TABLE>
<CAPTION>
Fiscal Year Ended February 29, February 28, February 28, February 28, February 29,
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Working Capital (1) $ 974,101 $ 766,951 $ (93,593) $ (324,863) $ (412,228)
Total Assets 3,573,017 2,603,097 1,230,797 931,345 885,316
Long Term Debt and
Obligations Under
Capital Leases, Less
Current Maturities 351,511 182,737 14,092 2,283 17,719
Stockholders' Equity 2,448,230 1,843,471 590,819 342,617 291,523
</TABLE>
(1) Print product and Market Guide for Windows revenue are deferred at the time
of sale and recognized ratably over the terms of the subscriptions. Costs
connected with the procurement of subscriptions and memberships are
expensed as incurred.
(2) Earnings per share are computed based on the weighted average number of
shares of Common Stock outstanding in each fiscal year.
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PART II
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the fiscal years ended February 29,
1996, February 28, 1995 and February 28, 1994 should be read in conjunction with
the Consolidated Financial Statements and Notes thereto.
RESULTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED FEBRUARY 29, 1996 COMPARED TO FEBRUARY 28, 1995
Total revenues for the fiscal year ended February 29, 1996 increased 49% to
$3,999,759 from $2,687,950 in fiscal year 1995. The increase in revenues is
primarily attributable to database vendor sales increasing 51% to $3,674,830.
Growth in database vendor sales resulted from an increase in the number of
vendors providing the Market Guide database as well as increased sales
penetration among several existing vendors. Market Guide product sales increased
42% to $257,001 from $181,143 in fiscal year 1995. Principally due to the
successful introduction of Market Guide for Windows in October, 1995. Print
product revenues, consisting mainly of the Market Guide - Select OTC Stock
Edition, declined 9% to $67,928 from $74,530 in fiscal year 1995. The decline in
print product revenues reflects lower sales to public libraries due to Market
Guide's decision to concentrate on marketing its electronic products.
Total operating expenses for the fiscal year ended February 29, 1996 increased
49% to $3,455,120 from $2,325,773 in fiscal year 1995. Contributing to higher
operating expenses were costs associated with the planned increase in the number
of employees. The Company added 15 employees from the end of fiscal year 1995
with emphasis on the sales and marketing functions. Additional expense increases
resulted from a full year of occupancy at Market Guide's new corporate location.
The new location is approximately three times the size of the Company's prior
facility, accounting for much of the balance of the increase in general and
administrative expenses.
Income from operations for the fiscal year ended February 29, 1996 increased 50%
to $544,639 from $362,177 in fiscal year 1995. This increase reflects growth in
revenues, as mentioned above, as well as management's continued effort to
control operating expense growth.
Net interest expense for the fiscal year ended February 29, 1996 increased
$29,440 to $36,333. The growth in interest expense reflects increased interest
costs associated with lease agreements used to purchase equipment and fixtures.
Income tax expense for the fiscal year ended February 29, 1996 decreased $15,719
to $1,127. The decline in income tax expense reflects changes in rules governing
alternative minimum tax in the state of New York.
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Net income for the fiscal year ended February 29, 1996 increased 50% to $507,179
from $338,438 in fiscal year 1995. The increase reflects growth in revenues,
management's continued effort to control operating expense growth and a
reduction in income taxes.
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1995 COMPARED TO FEBRUARY 28, 1994
Total revenues for the fiscal year ended February 28, 1995 increased 34% to
$2,687,950 from $2,001,118 in fiscal year 1994. The increase in sales reflected
growth in existing vendor sales as well as the addition of several new vendors,
bringing the total number of vendors selling the Market Guide database to 22.
Market Guide's three main markets, the Individual, Broker & Trader, and
Institutional market places, continued to contribute to the growth in revenues.
Total operating expenses for the fiscal year ended February 28, 1995 increased
36% to $2,325,773 from $1,707,437 in fiscal year 1994. The increase in salaries
and employee benefits reflected the hiring of additional sales, marketing,
production, and programming personnel. Increased general and administrative
expenses reflect costs associated with Market Guide moving to a larger corporate
facility.
Income from operations for the fiscal year ended February 28, 1995 increased 23%
to $362,177 from $293,681 in fiscal year 1994. Operating income reflected growth
in revenues partially offset by costs associated with the move from Glen Head,
New York to Lake Success, New York.
Net interest expense for the fiscal year ended February 28, 1995 decreased 74%
to $6,893 from $26,350 in fiscal year 1994. The decline reflected the
recognition of $22,666 in interest income resulting from additional funds in
interest earning accounts.
Income taxes for the fiscal year ended February 28, 1995 decreased 12% to
$16,846 from $19,129 in fiscal year 1994.
Net income for the fiscal year ended February 28, 1995 increased 36% to $338,438
from $248,202 in fiscal year 1994. Net income reflects growth in revenues,
expansions costs, and lower taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition reflects the seventh consecutive year of
steady improvement. The improvement is due, in part, to controlling expenses,
investing in product development, and generating higher revenues in all three
markets -- The Individual, the Broker & Trader, and the Institutional Investor
marketplaces.
As of February 29, 1996 the Company's working capital (current assets less
current liabilities) increased 27% to $974,101, up from $766,951 in fiscal year
1995. The Company's cash and cash equivalents totaled $680,783 at the end of
fiscal year 1996, compared to $695,135 at the end of fiscal year 1995.
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For the year ended February 29, 1996, net cash provided by operating activities
increased $441,027 to $560,925. The increase reflects higher net income and
depreciation which more than offsets the growth in receivables and prepaid
assets.
For the year ended February 29, 1996, net cash used in investing activities
increased 24% to $891,963. The increase reflects the Company's continued
investment in product enhancements and the development of three new products:
Market Guide for Windows, StockQuest, and an Internet site
(http://www.marketguide.com) that will result in added value to our users and
strengthen our competitive position.
For the year ended February 29, 1996, net cash provided by financing activities
decreased 71% to $316,686. The decrease in financing activities is attributable
to the issuance of 568,930 shares of restricted stock totaling $853,370 in
fiscal year 1995. In fiscal year 1996, the only stock issued was for the
Employee Stock Bonus Plan.
The Company did not engage in any borrowing other than capitalized leases and
did not maintain any credit lines during the year.
The Company believes that its current liquidity is sufficient to meet its
obligations during the next twelve months.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This information required by Item 8, and an index thereto, appears at pages F-4
through F-23 (inclusive) of this Report, which pages follow page 19.
ITEM 9: DISAGREEMENTS ON ACCOUNTING FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors
The names, ages and principal occupations of the Company's Directors as
of the end of the reporting period, and the data on which their term of
office commenced and expires, are as follows:
<TABLE>
<CAPTION>
FIRST
TERM OF BECAME PRINCIPAL
NAME AGE OFFICE DIRECTOR OCCUPATION
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John D. Case 51 1 1984 Chairman of the Board of
Directors, General Counsel
and Secretary of the
Company
Homi M. Byramji 43 1 1988 President, Chief Executive
Officer, Treasurer and
Director of the Company
Mark B. Burka 46 1 1995 Portfolio Manager, Manager
of Pension and Deferred
Benefit Investments, Aon
Advisors, Inc. and Director
of the Company
Raymond B. Dooley 49 1 1989 Banker, specializing in
structuring government
backed loans, and Director
of the Company
</TABLE>
- --------------------------------------------------------------------------------
(1) Directors are elected at the annual meeting of stockholders
and hold office until the following annual meeting.
(2) Changes since previous report: Shareholders at the annual
meeting held on August 31, 1995 elected Mark B. Burka to the
Board of Directors.
(3) Time, Inc. has the right to name a Director to the Board as
long as it retains at least a 3.5% ownership in the Company.
Time, Inc. has not exercised its right to name a Director
since 1987.
(4) Changes since end of reported period: None.
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(b) Business Experience
John D. Case, age 51, is a graduate of Hofstra University (B.A. 1968)
and Suffolk University Law School (J.D. 1971). He is admitted to the
practice of law in New York State and Federal jurisdictions. Prior to
assuming the Company's Presidency and Chairmanship in February 1989, he
was a Director of the Company (elected 1984) and was engaged in the
practice of law. Mr. Case served as President and CEO of the Company
from February 1989 to February 1992. Mr. Case is currently compensated
in the form of cash and qualifies for the Key Employee Incentive Plan.
Homi M. Byramji, age 43, a Director since 1988, had previously
consulted in computerized equity research for nine years. He holds a
Masters Degree in Business Administration, Rutgers University (1975)
and became Secretary and Treasurer of the Company on February 23, 1989.
Mr. Byramji remained Treasurer and assumed the duties of President and
CEO on March 1, 1992. He is compensated in the form of cash and
qualifies for the Key Employee Incentive Plan.
Mark B. Burka, age 46, joined the Board in August 1995. He is a
Chartered Financial Analyst and Manager of Pension and Deferred Benefit
Investments with Aon Advisors, Inc. Mr. Burka hold a Masters Degree in
Business Administration from the University of Chicago, Graduate School
of Business. He has been with Aon Advisors, Inc. and its predecessors
since 1977.
Raymond B. Dooley, age 50, joined the Board in March 1989. He is a
banker specializing in structuring government backed corporate loans.
Mr. Dooley holds a Masters Degree in Business Administration from St.
John's University.
All Directors of the Company will serve in such capacity until the next annual
meeting of Company's stockholders and until their successors have been duly
elected and qualified.
ITEM 11: EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table sets forth the total compensation paid or accrued by the
Company to executive officers of the Company who served in such capacities
during fiscal year 1996 (the "Named Officers") for services rendered during each
of the last three fiscal years.
14
<PAGE> 16
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------- ---------------------
FISCAL SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS GRANTED (#)
<S> <C> <C> <C> <C> <C>
Homi M. Byramji................. 1996 $170,000 -0- -0- (a)
President, Chief Executive 1995 142,000 -0- 12,500 (b)
Officer and Treasurer 1994 131,833 -0- 16,667 (b)
John D. Case....................... 1996 $75,000 -0- -0- (a)
Chairman, General Counsel 1995 50,000 -0- 12,500 (b)
and Secretary 1994 50,000 -0- 16,667 (b)
</TABLE>
(a) For the fiscal year ended February 29, 1996 Mr. Case and Mr. Byramji
are included in the Key Employee Incentive Plan approved by the
shareholders in August 1995. As of this date, the Plan has not been
implemented and no options have been awarded.
(b) Mr. Case and Mr. Byramji are partially compensated with options for the
purchase of Restricted Common Stock (per Rule 144 of the Securities and
Exchange Act of 1933 as amended) of the Company. The amount of options
issued in exchange for services is valued at the average bid price for
the month of February.
EMPLOYMENT AGREEMENTS
None of the Company's Executive Officers currently have employment contracts
with the Company. The Company has no pension plan or retirement benefits for its
employees. Outside directors presently receive compensation of $3,000 per year
for serving on the Board, and are eligible to participate in the Outside
Directors' Incentive Plan approved by the shareholders in August 1995.
EMPLOYEE STOCK PURCHASE PLAN
At the August 31, 1995 annual shareholders' meeting, the Board of Directors
approved an Employee Stock Purchase Plan. The Plan enables employees to purchase
common stock of the Company through payroll deductions or cash payments at a 15%
discount based on the lower of the average closing price during the quarter, or
the average closing price for the last five days of the quarter.
KEY EMPLOYEE INCENTIVE PLAN
At the August 31, 1995 annual shareholders' meeting, the shareholders approved a
plan that creates the ability to grant stock and/or options to purchase stock of
the Company to key corporate employees.
15
<PAGE> 17
OUTSIDE DIRECTORS' PLAN
At the August 31, 1995 annual shareholders' meeting, the shareholders approved a
plan that creates the ability to grant non-qualified stock options to the
Company's outside directors.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 29, 1996 by all persons
known to the Company to be beneficial owners of more than 5% of its Common Stock
and all Officers and Directors, both individually and as a Group. For purposes
of calculating the amount of beneficial ownership and the respective
percentages, the number of shares of Common Stock which may be acquired by a
person upon the exercise of outstanding warrants, options or upon conversion of
outstanding promissory notes, are considered outstanding, but shall not be
deemed to be outstanding for the purpose of computing the percentage of Common
Stock owned by any other person.
16
<PAGE> 18
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF APPROXIMATE
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS (2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mark B. Burka 376,725 8.99%
618 Washington Avenue
Wilmette, IL 60091
Homi M. Byramji (3) (4) 535,514 12.79%
One Sheep Hill Road
Boonton Township, NJ 07005
John D. Case (3) (4) 768,994 18.36%
12 Timberland Lane
Old Brookville, NY 11545
Liberty Life Insurance Company 250,000 5.97%
2000 Wade Hampton Blvd.
Greenville, SC 29615
Time Inc. 157,576 3.76%
1271 Avenue of the Americas
New York, NY 10020
All Directors and Officers 1,681,233 40.14%
as a Group (2 persons) (3) (4)
</TABLE>
(1) Unless otherwise indicated, all shares are directly owned and the sole
voting and investment power is held by the persons named.
(2) Based upon 4,188,245 shares of Common Stock issued and outstanding as
of February 29, 1996.
(3) Includes options for the purchase of 62,500 shares of restricted Common
Stock at $0.40 per share, and 16,667 shares of restricted Common Stock
at $1.50 per share.
(4) Includes options for the purchase of 12,500 shares of restricted Common
Stock at $2.68 per share.
The Company does not know of any arrangements or pledge of its securities by
persons now considered in control of the Company that might result in a
change of control of the Company.
17
<PAGE> 19
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 14: FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, EXHIBITS
AND REPORTS ON FORM 8-K
(a) (1) (2) Financial Statements and Financial Statement Schedules
A list of the Financial Statements and Financial Statement Schedules filed
as a part of this Report is set forth in Item 8, and appears at Page F-1
of this Report; which is incorporated herein by reference.
(a) (3) Exhibits
3 Certificate of Incorporation and Amendments thereto*
3(A) By-Laws*
(b) Reports on Form 8-K
In October, 1994 the Company filed Form 8-K to inform that the Company had
relocated to 2001 Marcus Avenue, Suite South 200, Lake Success, New York
11042-1011.
In March, 1994 the Company filed Form 8-K to inform that the Company had
completed the sale of 568,930 shares of restricted Common Stock at a price of
$1.50 per share, adjusted for the October 1995 one-for-foure reverse stock
split, in a private placement with a limited number of institutional and
individual investors.
In December, 1993 the Company filed Form 8-K to inform that the Company had
reached an agreement with Prodigy Services Company to distribute the Market
Guide information.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this Report to be signed on its behalf by
the undersigned, as principal financial and accounting officer thereunto duly
authorized.
MARKET GUIDE INC.
Dated: May 24, 1996
Lake Success, New York /s/ Homi M. Byramji
_______________________________
Homi M. Byramji
President, CEO and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
- ----------------------------------------------------------------------------
/s/ John D. Case Chairman of the Board
- ---------------------------- and Secretary May 24, 1996
JOHN D. CASE
President, CEO,
/s/ Homi M. Byramji Treasurer and Director May 24, 1996
- ----------------------------
HOMI M. BYRAMJI
/s/ Mark B. Burka
- ---------------------------- Director May 24, 1996
MARK B. BURKA
/s/ Raymond B. Dooley
- ---------------------------- Director May 24, 1996
RAYMOND B. DOOLEY
19
<PAGE> 21
MARKET GUIDE INC.
FINANCIAL STATEMENTS
AND
REPORT OF INDEPENDENT AUDITORS
FOR THE YEARS ENDED FEBRUARY 29, 1996
FEBRUARY 28, 1995, AND
FEBRUARY 28, 1994
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Financial Statements
<S> <C>
Report of Independent Auditors
Balance Sheets for the Fiscal Years Ended February 29, 1996
and February 28, 1995 F-4-5
Statements of Operation and Accumulated Deficit for the Fiscal Years
Ended February 29, 1996, February 28, 1995, and February 28, 1994 F-6
Statements of Cash Flows for the Fiscal Years Ended February 29, 1996,
February 28, 1995, and February 28, 1994 F-7-8
Statements of Stockholders' Equity for the Fiscal Years Ended
February 29, 1996, February 28, 1995, and February 28, 1994 F-9
Notes to Financial Statements February 29, 1996, February 28, 1995
and February 28, 1994 F-10-18
Financial Statement Schedules
Schedule of Indebtedness of and to Related Parties for the Fiscal Years
Ended February 29, 1996, February 28, 1995, and February 28, 1994 F-19
Schedule of Property, Plant and Equipment for the Fiscal Years Ended
February 29, 1996, February 28, 1995, and February 28, 1994 F-20
Schedule of Accumulated Depreciation and Amortization of Property,
Plant and Equipment for the Fiscal Years Ended February 29, 1996,
February 28, 1995, and February 28, 1994 F-21
Schedule of Computer Software and Product Enhancements for the
Fiscal Years Ended February 29, 1996, February 28, 1995,
and February 28, 1994 F-22
Accumulated Amortization of Computer Software and Product
Enhancements for the Fiscal Years Ended February 29, 1996,
February 28, 1995, and February 28, 1994 F-23
</TABLE>
<PAGE> 23
[ZERBO & MCKIERNAN, P.C. LETTERHEAD]
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Market Guide Inc.
2001 Marcus Avenue, Suite S200
Lake Success, NY 11042-1011
We have audited the accompanying Balance Sheets of Market Guide Inc. as of
February 29, 1996 and February 28, 1995 and the related Statements of Operation
and Accumulated Deficit, Cash Flows and Stockholders' Equity for the years
February 29, 1996, February 28, 1995 and February 28, 1994 then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Market Guide Inc. as of
February 29, 1996 and February 28, 1995 and the results of its operations and
its cash flows for the years February 29, 1996, February 28, 1995 and February
28, 1994 then ended in conformity with generally accepted accounting principles.
The supplemental information on pages F-19 through F-23 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements, and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Zerbo & McKiernan
- -------------------------------------
Zerbo & McKiernan, P.C.
Fairfield, New Jersey
May 15, 1996
[LOGO ART] Member
----------------------
DIVISION FOR CPA FIRMS AICPA
<PAGE> 24
BALANCE SHEETS Market Guide Inc.
<TABLE>
<CAPTION>
February 29, February 28,
Fiscal Year Ended 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 680,783 $ 695,135
Accounts receivable - net of allowance
for doubtful accounts (Note A-2) 761,180 558,813
Prepaid expenses and other current assets 305,414 89,892
---------- ----------
Total current assets 1,747,377 1,343,840
Property, plant and equipment:
(Note A-3)
Furniture and equipment 593,981 494,434
Equipment held under capital leases 543,655 296,672
---------- ----------
1,137,636 791,106
Less: Accumulated depreciation and
amortization (including amortization of
$154,233 and $84,002 in 1996 and
1995, respectively, on capital leases) 501,538 364,313
---------- ----------
Net property, plant and equipment 636,098 426,793
Other assets:
Computer software and product enhancements
(Net of accumulated amortization) (Note A-4) 1,066,006 732,247
Deposits and other assets 123,536 100,217
---------- ----------
Total other assets 1,189,542 832,464
---------- ----------
Total assets $3,573,017 $2,603,097
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 25
BALANCE SHEETS (continued) Market Guide Inc.
<TABLE>
<CAPTION>
February 29, February 28,
Fiscal Year Ended 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturates of Long-Term
debt and capital leases including
related party debt of $95,333 in 1996
and $95,333 in 1995 (Note B) $ 208,359 $ 158,025
Unearned revenues (Note A-2) 163,371 202,866
Accounts payable and other accrued expenses
(including accrued interest of $61,987 in 1996
and $61,987 in 1995) 401,546 215,998
----------- -----------
Total current liabilities 773,276 576,889
Non-current liabilities:
Long-term debt and capital lease obligations,
less current maturities (Note B) 351,511 182,737
----------- -----------
Total non-current liabilities 351,511 182,737
Commitments (Note C) -0- -0-
----------- -----------
Total liabilities 1,124,787 759,626
----------- -----------
Stockholders' equity (Note E):
Common stock - $.001 par value; 20,000,000
shares authorized, 4,188,245 and 4,112,709
shares issued and outstanding in 1996 and
1995, respectively (Restated as per Note F) 4,188 4,113
Capital in excess of par value
(Restated as per Note F)
3,618,910 3,521,405
Accumulated deficit (1,174,868) (1,682,047)
----------- -----------
Total stockholders' equity 2,448,230 1,843,471
----------- -----------
Total liabilities and stockholders' equity $ 3,573,017 $ 2,603,097
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 26
<TABLE>
<CAPTION>
STATEMENTS OF OPERATION AND ACCUMULATED DEFICIT Market Guide Inc.
February 29, February 28, February 28,
Fiscal Year Ended 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues (Note A-2):
Database vendors $ 3,674,830 $ 2,432,007 $ 1,701,234
Market Guide products 257,001 181,413 216,770
Print products 67,928 74,530 83,114
----------- ----------- -----------
Total revenues 3,999,759 2,687,950 2,001,118
Expenses:
Salaries, payroll taxes and
employee benefits 2,121,109 1,375,007 969,089
Database and product costs
(Note A-4) 521,903 454,489 414,272
General and administrative 724,406 440,826 280,732
Advertising and promotion 87,702 55,451 43,344
----------- ----------- -----------
Total expenses 3,455,120 2,325,773 1,707,437
----------- ----------- -----------
Income from operations 544,639 362,177 293,681
Interest expenses, net of interest income 36,333 6,893 26,350
----------- ----------- -----------
Income before income taxes 508,306 355,284 267,331
Provision for income taxes 1,127 16,846 19,129
----------- ----------- -----------
Net income 507,179 338,438 248,202
=========== =========== ===========
Accumulated deficit, beginning of year (1,682,047) (2,020,485) (2,268,687)
----------- ----------- -----------
Accumulated deficit, end of year $(1,174,868) $(1,682,047) $(2,020,485)
=========== =========== ===========
Earnings per share (Restated as per Note F) .12 .08 .07
Weighted average number of shares outstanding
(Restated as per Note F) 4,165,457 4,052,950 3,505,141
Fully diluted earnings per share
(Restated as per Note F)
.12 .08 .07
Fully diluted weighted average
number of shares outstanding
(Restated as per Note F) 4,401,135 4,256,999 3,630,819
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 27
STATEMENTS OF CASH FLOWS Market Guide Inc.
<TABLE>
<CAPTION>
February 29, February 28, February 28,
Fiscal Year Ended 1996 1995 1994
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 507,179 $ 338,438 $ 248,202
--------- --------- ---------
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 348,899 249,613 228,491
Changes in Assets and Liabilities:
(Increase)/Decrease in accounts receivable (202,367) (227,141) (138,688)
(Increase)/Decrease in prepaid assets (215,521) (89,811) 2,007
(Increase)/Decrease in deposits and
other assets (23,319) (88,211) (3,268)
Increase/(Decrease) in accounts payable and
other accrued expenses
185,548 (7,177) (25,271)
Increase/(Decrease) in unearned revenues (39,494) (55,813) 83,535
--------- --------- ---------
Total adjustments 53,746 (218,540) 146,806
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 560,925 $ 119,898 $ 395,008
--------- --------- ---------
INVESTING ACTIVITIES:
Payment for purchase of fixed assets $(346,529) $(357,891) $ (97,616)
Development of Computer Software and
Product Enhancements (Note A-4) (545,434) (364,264) (156,347)
--------- --------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES $(891,963) $(722,155) $(253,963)
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE> 28
STATEMENTS OF CASH FLOWS (continued) Market Guide Inc.
<TABLE>
<CAPTION>
February 29, February 28, February 28,
Fiscal Year Ended 1996 1995 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Payments for notes payable, long-term
debt and capital leases $(96,837) $ (66,549) $(56,300)
Proceeds from capital leases 315,943 249,187 49,285
Proceeds from Employee Stock Bonus Plan 64,129 60,844 -0-
Proceeds from issuance of common stock -0- 853,370 -0-
Proceeds from Stock Options Exercised 33,451 -0- -0-
-------- ---------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 316,686 1,096,852 (7,015)
-------- ---------- --------
Net increase/(decrease) in cash (14,352) 494,595 134,030
Cash at beginning of year 695,135 200,540 66,510
-------- ---------- --------
Cash at end of year $680,783 $ 695,135 $200,540
======== ========== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 60,974 $ 31,443 $ 42,043
Corporate taxes 5,250 28,611 13,017
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE> 29
STATEMENTS OF STOCKHOLDERS' EQUITY Market Guide Inc.
(Notes E and F)
<TABLE>
<CAPTION>
CAPITAL IN ACCUMULATED TOTAL
EXCESS OF DEFICIT STOCKHOLDERS'
SHARES PAR VALUE PAR VALUE EQUITY
<S> <C> <C> <C> <C> <C>
Balance at February 28, 1993 3,505,129 $3,505 $2,607,799 $(2,268,687) $ 342,617
Net Income for the year -0- -0- -0- 248,202 248,202
--------- ------ ---------- ----------- -----------
Balance at February 28, 1994 3,505,129 $3,505 $2,607,799 $(2,020,485) $ 590,819
--------- ------ ---------- ----------- -----------
Issuance of common stock in a
private offering for cash 568,930 $ 569 $ 852,801 $ -0- $ 853,370
Issuance of common stock in an
Employee Stock Bonus Plan 38,638 39 60,805 -0- 60,844
Net Income for the year -0- -0- -0- 338,438 338,438
--------- ------ ---------- ----------- -----------
Balance at February 28, 1995 4,112,697 $4,113 $3,521,405 $(1,682,047) $ 1,843,471
--------- ------ ---------- ----------- -----------
Stock Options Exercised 45,717 $ 45 $ 33,406 $ -0- $ 33,451
Issuance of common stock in an
Employee Stock Bonus Plan 29,831 30 64,099 -0- 64,129
Net Income for the year -0- -0- -0- 507,179 507,179
--------- ------ ---------- ----------- -----------
Balance at February 29, 1996 4,188,245 $4,188 $3,618,910 $(1,174,868) $ 2,448,230
========= ====== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE> 30
Market Guide Inc.
Notes to Financial Statements
February 29, 1996, February 28, 1995 and
February 28, 1994
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Nature of Business
Market Guide Inc. was incorporated on March 23, 1983, as The Unlisted
Market Service Corporation for the purpose of collecting information to
produce corporate profile reports on unlisted publicly traded companies. On
September 3, 1986, the current corporate name was adopted. Market Guide is
currently engaged in acquiring, condensing, publishing and distributing
historical and current financial information to the individual, financial
services, and institutional investor marketplaces.
The majority of the Company's revenue is derived from over thirty third
party vendors who distribute and sell the Market Guide database. Sales are
made through both third party vendors and direct sales to end users. The
Company also plans to distribute its products over the Internet.
2. Revenue Recognition
Database revenues from certain information vendors are not completely known
until after the end of the fiscal period. In these instances, management
uses estimates in recording vendor revenue in accordance with generally
accepted accounting principles. Accordingly, actual results could differ
from these estimates. Subsequent adjustments are made after actual
collection.
Print product revenues and Market Screen/Market Guide for Windows revenues
are deferred at the time of sale and recognized ratably as revenues over
the terms of their subscriptions. Costs associated with procurement of
these revenues are expensed as incurred.
Bad debts are recorded under the allowance method of accounting. For the
periods ended February 29, 1996 and February 28, 1995, the allowance for
doubtful accounts were $30,000 and $15,000, respectively.
3. Property and Equipment
Depreciation and amortization are provided for in amounts sufficient to
relate the cost of depreciable assets to operations over their estimated
service lives. Leased property under capital leases is amortized over the
lives of the respective leases or over the service lives of the assets for
those leases which substantially transfer ownership. The straight-line
method
F-10
<PAGE> 31
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
of depreciation is followed for substantially all assets for both financial
and tax reporting purposes.
4. Capitalization of Computer Software and Product Enhancements
Management has elected, pursuant to SFAS No. 86, to capitalize computer
software costs incurred for new product development and product
enhancements for the period beginning March 1, 1989. These costs are
reported at the lower of unamortized cost or net realizable value. The
amortization of these costs are included in database and product cost. All
research and development, database expansion and update database
maintenance and customer support costs are expensed as incurred.
The straight-line method of amortization is used over the estimated
economic life of the asset. For the periods ended February 29, 1996,
February 28, 1995 and 1994; $211,674, $181,652 and $188,678 respectively,
were charged to amortization expense. For the periods ended February 29,
1996 and February 28, 1995; accumulated amortization was $898,919 and
$687,245, respectively.
5. Earnings Per Share
Earnings per share are computed based on the weighted average number of
shares of Common Stock outstanding.
NOTE B - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS
<TABLE>
<CAPTION>
2/29/96 2/28/95
-------- --------
<S> <C> <C>
12% Demand note (a) $ 95,333 $ 95,333
Capital lease obligations 464,537 245,429
-------- --------
559,870 340,762
Less: current maturities 208,359 158,025
-------- --------
Total long-term debt
and capitalized leases $351,511 $182,737
======== ========
</TABLE>
(a) The holder of the note is an Officer and Director of the Company.
F-11
<PAGE> 32
NOTE B - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS (Continued)
Annual scheduled principal maturities of long-term debt and capital lease
obligations as of February 29, 1996 are as follows:
<TABLE>
<CAPTION>
Capital Total of Long Term
Long-Term Lease Debt and Capital
Debt Obligations Lease Obligations
---- ----------- -----------------
Year Ending February 28,
<S> <C> <C> <C>
1997 $95,333 $113,026 $208,359
1998 -0- 113,026 113,026
1999 -0- 113,026 113,026
2000 -0- 100,566 100,566
2001 -0- 24,892 24,892
-------- -------- --------
TOTAL $95,333 $464,536 $559,869
</TABLE>
On March 5, 1996 the Company entered into a capital lease to purchase additional
equipment. The monthly payment is $1,680.74 over sixty months.
NOTE C - COMMITMENTS
1. Capital Leases
The schedule of future minimum lease payments for the Company's capital leases
and the present value of the net minimum lease payments is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Year ending February 28, 1997 $113,026
1998 113,026
1999 113,026
2000 100,566
2001 24,892
--------
Total minimum lease payments $464,536
Less: Amounts representing interest 101,313
--------
Present value of net minimum
lease payments $363,223
========
</TABLE>
F-12
<PAGE> 33
NOTE C - COMMITMENTS (Continued)
2. Operating Leases
The Company rents its office facility under an operating lease that expires in
October, 2006. The Company can exercise a buyout option in October, 2001 for the
amount of $160,046. The annual minimum lease payments under the operating lease
as of February 29, 1996 are:
<TABLE>
<CAPTION>
<S> <C> <C>
Year ending February 28, 1997 196,283
1998 294,717
1999 303,968
2000 313,572
2001 323,484
2002 333,793
2003 344,453
2004 355,422
2005 366,831
2006 249,784
----------
Total $3,082,307
==========
</TABLE>
NOTE D - INCOME TAXES
The Company has adopted SFAS 109 and has net operating loss and investment tax
credit carryforwards in the amount of $1,155,509 and $10,524, respectively.
Pursuant to SFAS 109, management believes that it does not have a greater than
50% probability of realization of such loss carryforwards and credits and has
decided to provide for a full valuation allowance. The investment tax credits
will begin to expire, if unused, in the fiscal year ending February 28, 1999.
Annual fiscal year expirations total $3,588 in 1999; $5,470 in 2000; $1,466 in
2001. Net operating losses will begin to expire, if unused, in the fiscal year
ending February 29, 2000. Annual fiscal year expirations total $205,286 in 2001;
$661,740 in 2002; $288,483 in 2003. The Company has recorded deferred tax assets
related to the allowance for doubtful accounts in deposits and other assets. For
periods ended February 29, 1996 and February 28, 1995 the deferred tax assets
were $13,500 and $6,750, respectively.
Federal and New York State tax agencies impose a minimum tax on alternative
minimum taxable income. The minimum Federal and New York State taxes imposed for
the period ending February 29, 1996 are $2,900 and $4,977, respectively.
F-13
<PAGE> 34
NOTE D - INCOME TAXES (Continued)
The components of provision for income taxes are as follows:
<TABLE>
<CAPTION>
2/29/96 2/28/95 2/29/94
------------------------------------------------
<S> <C> <C> <C>
Current
Federal $ 2,900 $ -0- $ -0-
State and Local 4,977 23,596 19,129
Deferred
Federal (5,100) (5,100) -0-
State and Local (1,650) (1,650) -0-
==================================================
TOTALS $ 1,127 $16,846 $ 19,129
</TABLE>
Total income tax expense differs from the expected tax expense (computed by
applying the U.S. Federal statutory income tax rate of 34% to income before
income taxes) as follows:
<TABLE>
<CAPTION>
2/29/96 % 2/28/95 % 2/28/94 %
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax at Federal statutory rate $ 172,824 34.0 $ 120,797 34.0 $ 90,893 34.0
Federal alternative minimum tax 2,900 0.6 -0- 0.0 0.0 0.0
State income taxes, net of
Federal tax benefit 1,636 0.3 13,924 3.9 12,625 4.7
Net operating loss
carryforwards, utilized (179,716) (35.4) (118,772) (33.4) (81,005) (30.3)
Graduated tax bracket
differential -0- 0.0 -0- 0.0 (3,384) (1.3)
Non Deductible Expenses 3,483 0.7 897 0.2 -0- 0.0
======== === ========= === ======== ===
TOTALS $ 1,127 0.2 $ 16,846 4.7 $ 19,129 7.1
</TABLE>
F-14
<PAGE> 35
NOTE D - INCOME TAXES (Continued)
Income taxes currently payable as of February 29, 1996, February 28, 1995 and
1994 are as follows:
<TABLE>
<CAPTION>
2/29/96 2/28/95 2/28/94
----------------------------------------
<S> <C> <C> <C>
Federal $2,900 $ -0- $ -0-
State and Local -0- 4,175 8,366
========================================
TOTALS $2,900 $4,175 $8,366
</TABLE>
NOTE E - STOCKHOLDERS' EQUITY
1. Common Stock
On March 21, 1994 the Company raised $853,370 through the sale of 568,930 shares
of restricted common stock at a price of $1.50 per share, adjusted for the
October 1995 one-for-four reverse stock split, in a private placement with a
limited number of institutional and individual investors.
On August 11, 1994 the Company created a stock bonus program for employees based
upon merit and years of service. The bonus was awarded in four equal quarterly
installments for periods ending August 1994, November 1994, February 1995 and
May 1995, subject to an employee's continued employment on the dates of each
award. For the period ending February 28, 1995, the Company issued 38,638
restricted shares at a total cost of $60,844. For period ending February 29,
1996, the Company issued 29,831 restricted shares at a total cost of $64,129.
The Company adopted an Employee Stock Purchase Plan effective September 1, 1995.
The Employee Stock Purchase Plan is intended to qualify under Section 423 of the
Internal Revenue Code. Under the terms of the Plan, 125,000 shares are available
for purchase. The purchase price will be the lesser of an amount equal to 85% of
the fair market value of stock calculated on the lower of the average of the
stock's closing price for a full fiscal quarter or the average of the stock's
closing price for the last five trading days of a fiscal quarter. While the Plan
was made effective September 1, 1995, and employee participation was effective
on that date, the actual shares will be issued in the first fiscal quarter of
1997.
F-15
<PAGE> 36
NOTE E - STOCKHOLDERS' EQUITY (Continued)
2. Common Stock Warrants
In March, 1988 the Company granted warrants to an investor for the purchase of
28,125 shares of Common Stock at an exercise price of $2.00 per share, adjusted
for the October 1995 one-for-four reverse stock split, through March 6, 1993.
These warrants expired as of February 28, 1994.
In December, 1988 the Company granted warrants to a director for the purchase of
37,500 shares of Common Stock at an exercise price of $2.00 per share, adjusted
for the October 1995 one-for-four reverse stock split, through November 30,
1993. These warrants expired as of February 28, 1994.
3. Common Stock Options
In February, 1993 the Company granted options to a sales representative for the
purchase of 6,835 shares of restricted Common Stock at an exercise price of
$0.40 per share, adjusted for the October 1995 one-for-four reverse stock split,
through February 28, 1998. These stock options were exercised on May 25, 1995.
In May, 1993 the Company granted options to a sales representative for the
purchase of 25,000 shares of restricted Common Stock at an exercise price of
$0.40 per share, adjusted for the October 1995 one-for-four reverse stock split,
through February 28, 1998. These options were exercised on May 25, 1995.
In May, 1993 the Company granted options to two officers for the purchase of
125,095 shares of restricted Common Stock at an exercise price of $0.40 per
share, adjusted for the October 1995 one-for-four reverse stock split, through
February 28, 1998.
In March, 1994 the Company granted options to a sales representative for the
purchase of 13,786 shares of restricted Common Stock at an exercise price of
$1.50 per share, adjusted for the October 1995 one-for-four reverse stock split,
through February 28, 1998. These options were exercised on October 6, 1995.
In March, 1994 the Company granted options to two officers for the purchase of
33,334 shares of restricted Common Stock at an exercise price of $1.50 per
share, adjusted for the October 1995 one-for-four reverse stock split, through
February 28, 1999.
In February, 1995 the Company granted options to a sales representative for the
purchase of 37,581 restricted shares of Common Stock at an exercise price of
$2.68 per share, adjusted for the October 1995 one-for-four reverse stock split,
through October 31, 1995. These options expired as of October 31, 1995.
F-16
<PAGE> 37
NOTE E - STOCKHOLDERS' EQUITY (Continued)
In March, 1995 the Company granted options to two officers for the purchase of
25,000 shares of restricted Common Stock at an exercise price of $2.68 per
share, adjusted for the October 1995 one-for-four reverse stock split, through
February 29, 2000.
The Company adopted an Incentive Stock Option Plan for key employees effective
September 1, 1995. The Incentive Stock Option Plan is intended to qualify under
Section 422 of the Internal Revenue Code. Under the terms of the Plan, incentive
stock options or non-qualified stock options may be granted and 93,750 shares
were made available. The option price cannot be less than 100% of the fair
market value of the stock as determined by the Company's Board of Directors on
the date of the grant of the option. As of February 29, 1996, there were no
options granted or exercised.
The Company adopted an Independent Director's Stock Incentive Plan effective
September 1, 1995. Under the terms of the Plan, only non-qualified stock options
may be granted and 12,500 shares were made available. The option price is
determined by a Committee of three disinterested persons appointed by the Board
of Directors on the date of grant of the option. As of February 29, 1996, there
were no options granted or exercised.
NOTE F - 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
effective 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.
NOTE G - MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK
The Company has two major customers accounting for total sales of $1,465,659.
They are (in alphabetical order) Investext and Prodigy Services Company.
As of February 29, 1996, the Company had $547,240 on deposit at First National
Bank of Long Island and $132,541 on deposit at Rocky Mountain Securities.
NOTE H - SUBSEQUENT EVENTS
The Company completed renegotiation of contractual business arrangements with
two of its larger customers. The revised contractual arrangements will result in
a reduction in revenue realized by Market Guide Inc. from these two customers.
F-17
<PAGE> 38
NOTE I - SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
Selected quarterly financial data for the years ended February 29, 1996 and
February 28, 1995 are presented in the following table:
<TABLE>
<CAPTION>
Three Months Ended
MAY 31, 1995 AUGUST 31, 1995 NOVEMBER 30, 1995 FEBRUARY 29, 1996
<S> <C> <C> <C> <C>
Total revenues $ 890,341 $ 970,580 $1,063,124 (1) $1,075,714 (2)
Operating income 87,093 116,394 190,933 150,219
Income before taxes 81,971 109,196 184,780 132,359
Net income 77,053 101,552 173,693 (1) 154,881 (2)
Earnings per share $ .02 $ .02 $ .04 $ .04
Weighted average number of
shares outstanding 4,116,737 4,174,470 4,182,802 4,188,259
Fully diluted earnings per
share $ .02 $ .02 $ .04 $ .04
Fully diluted weighted
average number of shares
outstanding 4,379,037 4,409,171 4,409,171 4,409,171
MAY 31, 1994 AUGUST 31, 1994 NOVEMBER 30, 1994 FEBRUARY 28, 1995
Total revenues $ 613,549 $ 623,604 $ 654,921 $ 795,876
Operating income 80,702 86,536 81,826 113,113
Income before taxes 75,506 86,126 81,252 112,400
Net income 71,089 80,926 76,989 109,434
Earnings per share $ .02 $ .02 $ .02 $ .03
Weighted average number of
shares outstanding 3,944,194 4,074,728 4,087,260 4,100,817
Fully diluted earnings per
share $ .02 $ .02 $ .02 $ .03
Fully diluted weighted
average number of shares
outstanding 4,148,244 4,278,761 4,291,309 4,304,877
</TABLE>
(1) Total revenues and net income are overstated by approximately $25,000 due
to Fourth Quarter revenues inadvertently included in totals.
(2) Total revenues and net income are understated by approximately $25,000 due
to revenues inadvertently included in Third Quarter totals (see (1)
above).
NOTE: The sum of the four quarterly earnings per share do not equal the
total earnings per share for the fiscal year ended February 28,
1995 due to rounding.
F-18
<PAGE> 39
SCHEDULE OF INDEBTEDNESS OF AND TO RELATED PARTIES
<TABLE>
<CAPTION>
Balance At Balance At
Beginning Additions Reductions End
-----------------------------------------------------
<S> <C> <C> <C> <C>
February 29, 1996
- -----------------
John D. Case $ 95,333 $-0- $ -0- $ 95,333
-------- ---- ------- --------
$ 95,333 $-0- $ -0- $ 95,333
======== ==== ======= ========
February 28, 1995
- -----------------
John D. Case $125,333 $-0- $30,000 $ 95,333
-------- ---- ------- --------
$125,333 $-0- $30,000 $ 95,333
======== ==== ======= ========
February 28, 1994
- -----------------
John D. Case $125,333 $-0- $ -0- $125,333
-------- ---- ------- --------
$125,333 $-0- $ -0- $125,333
======== ==== ======= ========
</TABLE>
F-19
<PAGE> 40
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Balance At
Beginning Additions End of
Of Year At Cost Retirements Year
----------------------------------------------------------------
<S> <C> <C> <C> <C>
February 29, 1996
- -----------------
Machinery & Equipment $426,015 $ 99,547 $ -0- $ 525,562
Capitalized Leased Equipment 296,672 246,983 -0- 543,655
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 32,307 -0- -0- 32,307
Leasehold Improvements -0- -0- -0- -0-
-------- -------- ------ ----------
TOTAL $791,106 $346,530 $ -0- $1,137,636
======== ======== ====== ==========
February 28, 1995
- -----------------
Machinery & Equipment $267,919 $158,096 $ -0- $ 426,015
Capitalized Leased Equipment 106,983 189,689 -0- 296,672
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 22,201 10,106 -0- 32,307
Leasehold Improvements 4,859 -0- 4,859 -0-
-------- -------- ------ ----------
TOTAL $438,074 $357,891 $4,859 $ 791,106
======== ======== ====== ==========
February 28, 1994
- -----------------
Machinery & Equipment $208,673 $ 59,246 $ -0- $ 267,919
Capitalized Leased
Equipment 68,613 38,370 -0- 106,983
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 22,201 -0- -0- 22,201
Leasehold Improvement 4,859 -0- -0- 4,859
-------- -------- ------ ----------
TOTAL $340,458 $ 97,616 $ -0- $ 438,074
======== ======== ====== ==========
</TABLE>
F-20
<PAGE> 41
SCHEDULE OF ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Balance At
Beginning End of
Of Year Depreciation Retirements Year
------------------------------------------------------------
<S> <C> <C> <C> <C>
February 29, 1996
- -----------------
Machinery & Equipment $222,530 $ 65,142 $ -0- $287,672
Capitalized Leased 84,002 70,231 -0- 154,233
Equipment
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 21,669 1,852 -0- 23,521
Leasehold Improvements -0- -0- -0- -0-
-------- -------- ------ --------
TOTAL $364,313 $137,225 $ -0- $501,538
======== ======== ====== ========
February 28, 1995
- -----------------
Machinery & Equipment $180,670 $ 41,860 $ -0- $222,530
Capitalized Leased
Equipment 58,677 25,325 -0- 84,002
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 20,893 776 -0- 21,669
Leasehold Improvements 4,859 -0- 4,859 -0-
-------- -------- ------ --------
TOTAL $301,211 $ 67,961 $4,859 $364,313
======== ======== ====== ========
February 28, 1994
- -----------------
Machinery & Equipment $159,313 $ 21,357 $ -0- $180,670
Capitalized Leased
Equipment 41,221 17,456 -0- 58,677
Office Equipment 36,112 -0- -0- 36,112
Furniture & Fixtures 20,485 408 -0- 20,893
Leasehold Improvements 4,859 -0- -0- 4,859
-------- -------- ------ --------
TOTAL $261,990 $ 39,221 $ -0- $301,211
======== ======== ====== ========
</TABLE>
F-21
<PAGE> 42
SCHEDULE OF COMPUTER SOFTWARE AND PRODUCT ENHANCEMENTS
<TABLE>
<CAPTION>
Balance At
Beginning of
Year Additions Retirement Total
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
February 29, 1996
- -----------------
Computer Software $1,419,493 $545,433 $ -0- $1,964,926
--------- -------- ------- ----------
TOTAL $1,419,493 $545,433 $ -0- $1,964,926
========= ======== ======= ==========
February 28, 1995
- -----------------
Computer Software $ 1,055,229 $364,264 $ -0- $1,419,493
---------- -------- ------- ----------
TOTAL $ 1,055,229 $364,264 $ -0- $1,419,493
========== ======== ======= ==========
February 28, 1994
- -----------------
Computer Software $ 898,882 $156,347 $ -0- $1,055,229
---------- -------- ------- ----------
TOTAL $ 898,882 $156,347 $ -0- $1,055,229
========== ======== ======= ==========
</TABLE>
F-22
<PAGE> 43
SCHEDULE OF ACCUMULATED AMORTIZATION OF COMPUTER SOFTWARE
AND PRODUCT ENHANCEMENTS
<TABLE>
<CAPTION>
Balance At
Beginning of
Year Amortization Retirement Total
--------------------------------------------------------------
<S> <C> <C> <C> <C>
February 29, 1996
- -----------------
Computer Software $ 687,246 $ 211,674 $ -0- $ 898,920
--------- --------- ------- ---------
TOTAL $ 687,246 $ 211,674 $ -0- $ 898,920
======== ========= ======= =========
February 28, 1995
- -----------------
Computer Software $ 505,594 $ 181,652 $ -0- $ 687,246
--------- --------- -------- ---------
TOTAL $ 505,594 $ 181,652 $ -0- $ 687,246
========= ========= ======== =========
February 28, 1994
- -----------------
Computer Software $ 316,325 $ 189,269 $ -0- $ 505,594
--------- --------- -------- ---------
TOTAL $ 316,325 $ 189,269 $ -0- $ 505,594
========= ========= ======== =========
</TABLE>
F-23
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
STATEMENT OF FINANCIAL CONDITION AT 02/29/96 (UNAUDITED) & STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED 02/29/96 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> FEB-29-1996
<EXCHANGE-RATE> 1
<CASH> 680783
<SECURITIES> 0
<RECEIVABLES> 761180
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1747377
<PP&E> 1137636
<DEPRECIATION> 501538
<TOTAL-ASSETS> 3573017
<CURRENT-LIABILITIES> 773276
<BONDS> 351511
0
0
<COMMON> 4188
<OTHER-SE> 2448230
<TOTAL-LIABILITY-AND-EQUITY> 3573017
<SALES> 3999759
<TOTAL-REVENUES> 3999759
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3455120
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36333
<INCOME-PRETAX> 508306
<INCOME-TAX> 1127
<INCOME-CONTINUING> 507179
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 507179
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
