UNITED STATES
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 August 31, 1997
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.
(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
(Address of principal executive offices) (Zip Code)
Registrant's
telephone number,
including area code:
(516) 327-2400
(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 _______
4,713,659 Common shares, $.001 par value were issued and
outstanding on
September 23, 1997.
Table of Contents
Financial Statements
Balance Sheets as of August 31, 1997 (Unaudited) and
February 28, 1997 3
Statement of Operations for the Three Months and Six Months
Ended
August 31, 1997 (Unaudited) and August 31, 1996
(Unaudited) 5
Statement of Cash Flows for the Six Months Ended August 31,
1997
(Unaudited) and August 31, 1996 (Unaudited)
6
Notes to Financial Statements
7
Business
8
Management's Discussion and Analysis of Financial
Condition and Results of Operations -- August 31, 1997
13
Other Information
16
Signature
17
<TABLE>
MARKET GUIDE INC.
Balance Sheets
<S> <C>
<C>
August 31, 1997
February 28, 1997
(Unaudited)
ASSETS
Current assets:
Cash $711,800
$1,230,893
Accounts Receivable (net
557,415
of allowance for doubtful 947,147
accounts)
Prepaid expenses and
other current assets 125,303
263,630
Total current assets 1,784,250
2,051,938
Property, plant and
equipment:
Furniture and equipment 1,311,679
936,097
Equipment held under
capital leases 74,626
72,509
2,329,254
1,951,555
Less: accumulated
depreciation and
amortization (including
amortization of capital
leases totaling $278,422
and $189,234 as of August
31, 1997 and February 28, 915,713
744,551
1997, respectively).
Net property, plant and
equipment 1,413,541
1,207,004
Other assets:
Computer software and
product enhancements (net
of accumulated 2,385,961
1,891,621
amortization)
Deposits and other assets 78,085
78,085
Total other assets 2,464,046
1,969,706
Total assets $5,661,837
$5,228,648
</TABLE>
<TABLE>
MARKET GUIDE INC.
Balance Sheets - continued
<S> <C>
<C>
August 31, 1997
February 28, 1997
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current maturities of long-term
debt and capital leases $185,599
$176,012
Unearned revenues 641,832
248,679
Accounts payable and other
accrued expenses 154,823
179,493
Total current liabilities 982,254
604,184
Non-current liabilities:
Long-term debt and capital
lease obligations, less current 729,257
564,262
maturities
Total non-current liabilities 729,257
564,262
Commitments -
- -
Total liabilities 1,711,511
1,168,446
Stockholders' equity:
Common stock - $.001 par value,
20,000,000 shares authorized,
4,713,659 and 4,708,186 shares
issued and outstanding as of
August 31, 1997 and February 4,714
4,708
28, 1997, respectively
Capital in excess of par value 4,985,867
4,972,032
Accumulated deficit (1,040,255)
(916,538)
Total stockholders' equity 3,950,326
4,060,202
Total liabilities and
stockholders' equity $5,661,837
$5,228,648
</TABLE>
<TABLE>
MARKET GUIDE INC.
Statement of Operations
(Unaudited)
<C> <S> <C> <C>
<C> <C>
Three months Three months Six
months Six months
August 31, August 31,
August 31, August 31,
1997 1996
1997 1996
Revenues:
Database vendors $1,281,896 $1,002,632
$2,453,298 $2,036,493
Market Guide products 383,996 101,630
642,858 182,134
Print product 13,421 12,886
29,170 29,627
Total revenues 1,679,313 1,117,148
3,125,326 2,248,254
Expenses:
Salaries, payroll taxes
& employee benefits 1,015,752 626,979
1,939,150 1,262,124
Database and product 219,854 197,614
414,280 340,893
costs
General and 381,355 218,704
694,031 391,680
administrative
Advertising and 95,430 28,783
172,895 58,116
promotion
Total expenses 1,712,391 1,072,080
3,220,356 2,052,813
Income from operations (33,078) 45,068
(95,030) 195,441
Interest income 4,402 8,308
12,563 14,884
Interest expense 18,513 15,284
39,251 33,202
Income before income (47,189) 38,092
(121,718) 177,123
taxes
Provision for income 2,000 650
2,000 1,970
taxes
Net income $(49,189) $37,442
$(123,718) $175,153
Earnings per share:
Primary $(0.01) $0.01
$(0.03) $0.04
Fully diluted $(0.01) $0.01
$(0.03) $0.04
Weighted average number
of shares outstanding:
Primary 4,709,801 4,192,088
4,709,002 4,190,167
Fully diluted 4,737,084 4,375,517
4,735,144 4,373,596
</TABLE>
<TABLE>
MARKET GUIDE INC.
Statement of Cash Flows
(Unaudited)
<S> <C>
<C>
Six months
Six months ended ended
August 31,
August 31, 1996 1997
Cash Flows From Operating Activities:
Net income $(123,718)
$175,153
Adjustments to reconcile net income to
net cash provided from operating
activities
Depreciation 374,277
231,690
Changes in assets and liabilities:
(Increase)/Decrease in accounts (389,732)
314,010
receivable
(Increase)/Decrease in prepaid assets 138,327
(7,665)
(Increase)/Decrease in deposits and other 0
1,745
assets
Increase/(Decrease) in accounts payable (24,970)
(163,146)
Increase/(Decrease) in unearned revenues 393,153
171,093
Total adjustments 491,055
547,727
Net cash from operating activities 367,337
722,880
Cash Flows From Investing Activities:
Payments for purchase of fixed assets (377,699)
(179,551)
Development of computer software and
product enhancements (697,853)
(270,309)
Net cash from investing activities (1,075,552)
(449,860)
Cash Flows From Financing Activities:
Payments for notes payable, long-term
debt and capital leases (87,724)
(81,925)
Proceeds from capital leases 0
188,839
Proceeds from line of credit 263,005
0
Proceeds from issuance of employee stock 13,841
21,260 plan
Proceeds from private placement of common 0
0 stock
Net cash from financing activities 189,122
128,174
Net increase/(decrease) in cash (519,093)
401,194 Cash
at beginning of period 1,230,893
680,783
Cash at end of period $711,800
$1,081,977
</TABLE>
Market Guide Inc.
Note to Financial
Statements
August 31, 1997
Note 1 INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Market Guide Inc.
have been prepared
without audit, except for the balance sheet as of February
28, 1997. In the
opinion of management, all adjustments (consisting of
normal recurring
adjustments) considered necessary for a fair presentation
have been included.
Operating results for the six months ended August 31, 1997
are not necessarily indicative of the results that may be
expected for the
year ending February 28, 1998.
Note 2 BANK LINE OF CREDIT
During the second quarter ended August 31, 1997, the Company
borrowed $263,005
under its previously arranged line of credit with Fleet
Bank. Proceeds were
used to fund acquisitions of capital equipment
(principally computers
and peripherals). The bank line was used in lieu of
alternative leasing
arrangements used in the past.
Note 3 DEPRECIATION AND AMORTIZATION
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 of depreciation is followed for substantially all
assets for both
financial and tax reporting purposes.
Business
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. In 1996, the Company
formed a new
division, CreditRisk Monitor, to develop products and
services for the
corporate credit manager and other corporate
applications.
The Company acquires, integrates, condenses and publishes
accurate, timely,
and objective financial and other information on publicly
traded corporations,
and markets this information to the financial, investment
and credit
communities, as well as to independent investors, in a cost
effective manner.
The Market Guide Database covers over 9,500 companies
trading on the New York,
American, Nasdaq and Over-the-Counter Stock Exchanges,
including foreign companies trading in the U.S. as
ADRs and ADSs. The content created by Market Guide is
derived from information filed by the
subject company with the Securities and Exchange
Commission, issued in press releases or
carried in other media reports and publications. Each
company's fundamental 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 daily, 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, bond
ratings, and short interest statistics giving users a
complete perspective on each company
Calculation of over 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
and credit decisions.
Developing efficient, timely, cost-effective and easy
to use delivery systems such as
our CD/ROM based analytic service - Market Guide
for Windows, our Internet site
(www.marketguide.com) and the CreditRisk Monitor
Internet site (www.creditriskmonitor.com).
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, the Internet, Market
Guide for Windows (its proprietary
analytic software) and a print publication. The
CreditRisk Monitor division serves the need of
corporate credit managers through an Internet-based service.
Vendors
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 content 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,
America Online, Ameritrade Holding,
Argus Research, Aufhauser, Automatic Data Processing, AIQ
Systems, Inc., Bridge Information
Systems Inc., Briefing.com, Business Wire, CDA Technology,
Ceres Securities, Charles Schwab
and Company, Data Broadcasting Corporation, Devsonshire
Technology, Dial/Data, Dow Jones PIR
Corporate Profiles, Dow Jones Telerate, EDGAR Online,
EuroAmerican Group, FactSet Research,
First Call Corporation, Global Market Information,
Go2Net, Holt Value Associates, IBM
Infomarket, ILX Systems Inc., Individual Investor Magazine,
Instinet Analytics, Interactive
Data Corporation, Interactive Workplace, Internet
Securities, Investools Inc., Los Angeles Times,
Money Club, MX Net, News Alert, NewsWare, Omega Research,
OneSource Information Services, Inc.,
Pacific Brokerage Services, Papyrus Technology Inc., P.C.
Quote, Inc., PointCast, PR Newswire, Prodigy
Services Company, Quote.com, Quotes Plus, Quotron Systems,
Inc., Real Time Quotes, Inc.,
Reality Online, Reuters Ltd., Securities Data Corporation,
Shark Information Services, Inc.
Snapshot Inc., Telemet America, Inc., Telescan, Inc.,
Track Data Corporation, Track Online, Vickers Stock
Research Corporation, Wall Street on Demand, Westergaard
Publishing, Windows on Wall Street and Yahoo!.
Business Developments
Market Guide has developed an analytic software package,
Market Guide for Windows,
introduced in fiscal year 1996, 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 in weekly, monthly or
quarterly update formats.
In June 1996, the Company announced a multi-year contract
with Reuters Limited which grants
Reuters' worldwide use of Market Guide's financial database.
To date, this agreement represents
the largest single contract in Market Guide's history.
The Company has an Internet site that has been in
operation since August 1996 . It is anticipated
that this site will broaden the Company's ability to
sell and service its products directly
to end users. The address to our site is
http://www.marketguide.com. The Company also uses
its Internet infrastructure to host cobranded sites and
partnership with various vendors. Amongst
our cobranded sites are discount brokerage firms such as
Charles Schwab & Co., Ameritrade Holding,
and Pacific Brokerage Services; and other sites such as
Yahoo!, PointCast, the Los Angeles
Times and Individual Investor Magazine.
A version of the Market Guide for Windows software with a
smaller information set is sold over
the Internet to individual investors under the name
StockQuest. StockQuest was introduced in August
1996.
In September 1996, the Company formed a new division,
CreditRisk Monitor (CRM). CRM is an
Internet-based financial information and real-time news
service targeted towards the credit
industry. After seven months of development work, the
CreditRisk Monitor service was successfully
introduced in April 1997.
In September 1997, the Company announced a multi-year
agreement with America Online to provide
financial and investment information to AOL. It is
anticipated this service will become
operational in the third quarter of fiscal 1998.
In September 1997, the Company also announced a
distribution agreement with Riemer Reporting
Services, Inc. to distribute CreditRisk Monitor products
and services. Riemer Reporting
Services is a leading provider of national credit network
services to users of
business credit information.
Publications
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 overthe-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 timeto-time the companies
covered do change due to mergers, acquisitions, bankruptcy,
delisting or moving to the New York or
American Stock Exchanges.
Companies dropped from the book are replaced by companies
which are selected by using
proprietary Market Guide selection criteria. The companies
selected for inclusion in the book
have, as a group, regularly outperformed the Nasdaq
composite as a whole.
Database Enhancements
The Company continuously expands, enhances and improves
the Market Guide Database based
on customer suggestions and employee feedback.
In the fall of 1994, Market Guide introduced a completely
new set of industry and sector
classifications that reflect the current economy and are
being incorporated into all of
Market Guide's products.
These 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 the fall of 1995, the Company completed development of
a historical pricing database to
complement the financial information it had 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 1983,
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 this project, Market Guide
now has annual financial statement information going back
to 1983 for most companies on its
database. As a result of the completion of this project,
Market Guide believes it 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, the
Market Guide for Windows product, and through selected
vendors.
In fiscal year 1997, the Company began collecting
information on Dividend Reinvestment
Plans (DRIPs). The DRIP information Market Guide
collects includes restrictions, fees,
discounts and contacts on over 900 plans. The Company
will
continue to expand its DRIP database as more companies
implement such plans for shareholder
reinvestment of dividends.
In fiscal year 1997, the Company incorporated Senior Debt
Ratings into its database. The
ratings offered on the Market Guide Database are provided by
Fitch Investors Service, L.P.,
Moody's Investors Service and Standard & Poor's Rating
Group, and include current ratings,
prior ratings and the accompanying dates. Using these
ratings, Market Guide has calculated an
average company and industry rating.
Internet
The Company has created a dynamic, comprehensive and
extremely useful Internet site. The site
contains both advertising supported and added cost
content. Advertising supported
content is free to the user and Market Guide expects to
cover costs and generate profits from
the sale of advertising. As of August 1997, advertising
supported content included:
Price quotes (in partnership with PC Quote),
News (in partnership with News Alert),
Market Guide's Company Snapshot Reports,
Market Guide's What's Hot/What's Not service that
identifies the price performing
leaders and laggards by sector, industry and company
over various time
periods, and
Price charts.
For users who wish to have more comprehensive information,
added cost content is available for
nominal per report or subscription based fees. The added
cost content includes:
The Market Guide Quick Facts Report,
The Market Guide Company Profile Report,
The Market Guide Ratio Comparison Report, The Market
Guide Detailed
Financials,
The Market Guide ProVestor Report,
The Earnings Estimate Report (in partnership with First
Call), and
The Market Guide StockQuest Screening and Reporting
application.
The Market Guide web site is very comprehensive with
easy navigational capabilities.
It has been designed to handle all the needs of most
investors. However, the Company continues
to enhance the site with additional content, capabilities
and educational aids. Future
enhancements will include online trading capabilities and
the sale of investment materials.
In addition to our own site, Market Guide's information is
available on over 20 other web sites.
Most of these web partners also offer their users added
cost services from Market Guide. These
added cost services are delivered mostly through cobranded
sites hosted by Market Guide.
CreditRisk Monitor
Market Guide's newest division, CreditRisk Monitor (CRM),
is a new online information and
news service that follows more than 375 U.S. publicly
traded domestic retail chains and
wholesalers. This online service is accessible through
the Internet
(www.creditriskmonitor.com) and has been designed to
provide corporate credit managers with
the analytical tools necessary to follow, on a daily basis,
all the public companies they do
business with.
CRM was formed specifically to leverage Market Guide's
comprehensive database and state
of-the-art technology through sales to a new market. CRM
provides the credit community with a
cost efficient, online credit and financial information
service.
The CRM information service consists of: CRM Company
Reports, the CRM Alert Notification
Service, and the CRM Real-Time News Service. The CRM web
site became operational in April
1997.
Business Facilities
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. The Company
currently maintains two office suites in this
complex, Suite South 200 which totals 13,500 square feet,
and Suite West 290 which totals
5,500 square feet.
In June 1996, the Company leased a sales office in
Chicago, Illinois. This space totals 572
square feet and is staffed by a full time sales
representative.
Market Guide Inc.
Management's Discussion and Analysis of Financial
Condition
and Results of Operations
August 31, 1997
Results of Operations
For the three months ended August 31, 1997 compared to
August 31, 1996
Total revenues for three months ended August 31, 1997
increased 50% to $1,679,313. The
growth in revenues reflects increases of 28% in database
vendor sales to $1,281,896 and 278% in
Market Guide product sales to $383,996. The revenue
growth is attributable to increases in
sales to our traditional core of vendors that sell
to the institutional, retail and
individual investor marketplaces, new revenue from the
addition of more than twenty Internet
related vendors, growth in sales at our own web site
(www.marketguide.com), incremental
sales of Market Guide for Windows products, and the
introduction of CreditRisk Monitor's
Internet-based service (www.creditriskmonitor.com) in the
first quarter of this fiscal year.
Print product revenues, consisting mainly of the Market
Guide - Select OTC
Stock Edition, increased 4% to $13,421. Market Guide
continues to concentrate on marketing
electronic products and services.
Total operating expenses for three months ended August 31,
1997 increased 60% to $1,712,391. The
largest component of this increase is expenses related to
the CreditRisk Monitor division.
Cash outlays did not rise significantly from the previous
quarter ended May 31, 1997, but expenses
rose significantly due to expensing of CreditRisk Monitor's
activities that had been capitalized
until product introduction in April 1997.
Costs associated with increased staffing levels in all
departments, higher general and
administrative expenses, and increased sales and marketing
activities also contributed to the 60%
expense increase. For financial reporting purposes,
CreditRisk
Monitor sales are recognized over a defined period of
time and expenses are recorded as
incurred. The result is that CreditRisk Monitor
expenses continue to exceed recognizable
sales. Management expects that CreditRisk Monitor will
become profitable within one year of its
introduction. Management also believes that CreditRisk
Monitor will develop into a major source
of earnings and cash flow in the years to come.
Loss from operations for three months ended August 31,
1997 totaled $33,078 compared to
operating income of $45,068 for the three months ended
August 31, 1996. These losses are
attributable to the start-up of the new CreditRisk
Monitor division. Without the expenses of
launching this new division and business line, Market
Guide would have recorded record profits
in the quarter just ended.
Interest income for three months ended August 31, 1997
decreased 47% to $4,402. The decrease
reflects lower cash balances throughout the quarter.
Interest expense for three months ended August 31, 1997
increased 21% to $18,513.Higher
interest expense reflects additional capital lease
service requirements.
Net loss for the three months ended August 31, 1997 totaled
$49,189 compared to net income of
$37,442 for the three months ended August 31, 1996. The
loss reflects increased new product line
costs as noted above.
For the six months ended August 31, 1997 compared to August
31, 1996
Total revenues for six months ended August 31, 1997
increased 39% to $3,125,326. The increase in
revenues reflects a 20% increase in database vendor sales
to $2,453,298 and Market Guide
product sales growth of 253% to $642,858. The revenue
growth continues to reflect increases in
sales to our traditional core of vendors that sell to
the institutional, retail and
individual investor marketplaces, new revenue from the
addition of more than twenty Internet
related vendors, growth in sales from our own web site
(www.marketguide.com), incremental sales
of Market Guide for Windows products, and the
introduction of CreditRisk Monitor's internet-
based service in April 1997. Print product revenues,
consisting mainly of the Market Guide
- - Select OTC Stock Edition, decreased 2% to $29,170. The
decline in print product sales reflects
Market Guide's decision to concentrate on marketing
electronic products and services.
Total operating expenses for six months ended August 31,
1997 increased 57% to $3,220,356. The
largest component of this increase is expenses related to
the Company's new CreditRisk
Monitor division. Costs associated with increased
staffing levels in all departments, higher
general and administrative expenses, and increased sales and
marketing activities also contributed
to the increased level of expenses in the six month
interval. For financial reporting purposes,
CreditRisk Monitor sales are recognized over a defined
period of time and expenses are
recorded as incurred. The result is that expenses continue
to exceed recognizable sales.
Management expects this trend to continue to a
lessening degree throughout the remainder of
this fiscal year.
Loss from operations for six months ended August 31,
1997 totaled $95,030 compared to
operating income of $195,441 for the six months ended
August 31, 1996. As noted above, the
operating loss was primarily attributable to the recognition
of costs associated with CreditRisk
Monitor, while associated revenues will continue to build
steadily over time.
Interest income for six months ended August 31, 1997
decreased 16% to $12,563. The decrease
reflects lower cash balances throughout the period.
Interest expense for six months ended August 31, 1997
increased 18% to $39,251. Higher interest
expense reflects additional capital lease service
requirements.
Net loss for the six months ended August 31, 1997 totaled
$123,718 compared to net income of
$175,153 in the six months ended August 31, 1996. The loss
reflects increased costs as noted
above.
Liquidity and Capital Resources
As of August 31, 1997, the Company's working capital
(current assets less current
liabilities) decreased 45% to $801,996 when compared to the
amount at February 28, 1997. The
Company's cash and cash equivalents decreased 42% to
$711,800 when compared to the balance at
February 28, 1997.
For the six months ended August 31, 1997, net cash
provided by operating activities
decreased 49% to $367,337 when compared to the six
months ended August 31, 1996. The
decrease reflects a higher accounts receivable balance
related to CreditRisk Monitor sales and
an operating loss. Partially offsetting this was a sharp
increase in unearned revenues reflecting
advance payments from certain customers.
For the six months ended August 31, 1997, net cash used in
investing activities increased 139%
to $1,075,552 when compared to the six months ended August
31, 1996. The increase reflects the
Company's continued investment in product and database
enhancements and in Market Guide's
Internet site.
For the six months ended August 31, 1997, net cash from
financing activities increased
48% to $189,122 when compared to the six months ended August
31, 1996. This result reflects
$263,005 drawn from the line of credit for the purchase of
computers and equipment.
The Company believes its current liquidity is sufficient to
meet its obligations during the next
twelve months.
Other Information
Item 1 Legal
Proceeding
The Company has commenced litigation in the United States
District Court for the Eastern District
of New York against Information Clearinghouse Inc. d/b/a
F&D Reports ("ICI") and Lawrence Sarf.
The Company's complaint alleges claims of trademark
infringement, unfair competition,
deceptive trade practices and conversion in connection
with defendants' theft and use of the
Company's newly designed proprietary slogan "On-Line, On-
Time, OnTarget," developed for use
with its Internet credit reporting system. The Company
seeks injunctive relief, an accounting,
monetary and punitive damages. Contemporaneously, an action
was commenced in the Nassau County
Supreme Court by ICI against the Company, and primarily,
three newly engaged employees. ICI
claims misappropriation of proprietary information and
trade secrets by the newly engaged
employees, unfair competition, breach of fiduciary duty and
tortious interference. While
ICIrequests injunctive relief as well as money damages,
no request for any temporary
relief has been sought. Management does not believe the
pending actions will have a material
effect on the business activities of the Company.
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
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)
October 13, 1997 /s/ Homi M. Byramji
Date President and CEO
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