<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996.
Commission file number 0-20311
DATA BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3668779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7050 Union Park Center
Suite 600 3490 Clubhouse Drive, I-2
Midvale, Utah 84047 Jackson, Wyoming 83001
(Address of principal (Address of principal
administrative offices) executive offices)
Registrant's telephone number, including area code:
(801) 562-2252 (307) 733-9742
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
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes X No
The number of shares of common stock, par value $.01 per share, of the
registrant outstanding as of May 8, 1996 was 31,066,408.
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PART I.- FINANCIAL INFORMATION
Item 1. Financial Statements
DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
REVENUES $28,364 $19,564 $84,197 $57,879
COSTS AND EXPENSES
Cost of services 10,929 8,220 32,693 24,694
Selling, general
and administrative 9,218 6,243 27,117 18,513
Depreciation and
amortization 4,094 2,634 12,220 7,645
Merger and consolidation costs 155 - 1,865 -
Total costs and expenses 24,396 17,097 73,895 50,852
INCOME FROM OPERATIONS 3,968 2,467 10,302 7,027
Interest and other (expense)
income, net (283) (363) (932) (1,030)
INCOME BEFORE REORGANIZATION
ITEMS AND INCOME TAXES 3,685 2,104 9,370 5,997
CNBC proceeds,
net of obligations 3,299 14,135 3,299 14,135
Other reorganization items, net - (18) - 307
Total reorganization items 3,299 14,117 3,299 14,442
INCOME BEFORE INCOME TAXES 6,984 16,221 12,669 20,439
Provision for income taxes 2,864 5,897 5,574 7,540
NET INCOME $4,120 $10,324 $7,095 $12,899
NET INCOME PER SHARE:
Primary $0.13 $0.43 $0.22 $0.54
Fully diluted $0.12 $0.43 $0.22 $0.53
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
Primary 32,145 23,881 31,974 24,100
Fully diluted 33,276 24,021 32,827 24,159
See accompanying notes to consolidated financial statements.
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DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31, June 30,
ASSETS 1996 1995
Current Assets:
Cash and cash equivalents $16,729 $32,267
Restricted cash 7,463 2,105
Accounts receivable, net 8,334 6,307
Receivable from ADP 345 1,268
Components and supplies 3,447 3,444
Other current assets 6,607 4,619
Total Current Assets 42,925 50,010
Property and equipment, less
accumulated depreciation of
$28,257 and $21,408 20,882 18,007
Software development costs, net of
accumulated amortization of $2,088
and $1,205 4,575 4,217
Goodwill, net of accumulated amortization
of $5,083 and $4,677 69,635 69,650
Deferred tax assets, net 9,587 14,030
Other assets 6,938 7,106
TOTAL ASSETS $154,542 $163,020
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,897 $ 7,215
Payable from restricted
cash 7,212 1,907
Payable to BII stockholders 195 13,484
Accrued liabilities 7,943 14,514
Current maturities of long-term debt 913 7,210
Other current liabilities 795 1,289
23,955 45,619
Obligations for billings
in advance of services 7,135 7,391
Total Current Liabilities 31,090 53,010
Long-term debt 5,531 8,903
Other non-current liabilities 4,910 4,392
TOTAL LIABILITIES 41,531 66,305
Commitments and contingencies
Stockholders' Equity:
Common stock: Issued and
outstanding, 31,174,624 and
29,272,667 312 293
Additional paid-in capital 81,384 72,202
Retained earnings 31,315 24,220
TOTAL STOCKHOLDERS' EQUITY 113,011 96,715
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $154,542 $163,020
See accompanying notes to consolidated financial statements.
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DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
March 31,
1996 1995
CASH FLOWS PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
Net income $ 7,095 $12,899
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 12,220 7,645
Deferred income taxes 3,572 1,074
CNBC proceeds, net of
obligations and taxes (1,847) (8,949)
Other non-cash items, net 2,497 376
Changes in operating assets
and liabilities, net (9,957) (2,393)
NET CASH PROVIDED BY OPERATING ACTIVITIES 13,580 10,652
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Cash paid for acquisitions (18,406) (675)
Purchase of property and equipment (9,852) (6,632)
Receipt of contingent payment
from CNBC 7,738 26,611
Increase in restricted cash (5,566) (26,100)
Proceeds from the sale of Shark 1,331 -
Capitalized software development costs (1,241) (1,652)
Investment in joint ventures (1,134) (65)
Other, net (408) 1,023
NET CASH USED IN INVESTING ACTIVITIES (27,538) (7,490)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Payments of long-term debt (11,184) (1,911)
Exercise of common stock options
and warrants 6,324 286
Issuance of long-term debt 3,500 -
Other, net (220) (21)
NET CASH USED IN
FINANCING ACTIVITIES (1,580) (1,646)
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (15,538) 1,516
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 32,267 3,965
CASH AND CASH EQUIVALENTS AT END OF PERIOD $16,729 $5,481
See accompanying notes to consolidated financial statements.
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DATA BROADCASTING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been
prepared by Data Broadcasting Corporation and Subsidiaries (the "Company"
or "DBC") in accordance with generally accepted accounting principles for
interim financial reporting and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared under
generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. In the opinion of management, all adjustments
considered necessary for a fair presentation of the Company's financial
position, results of operations and cash flows have been included. All
such adjustments are of a normal recurring nature. This report on Form 10-Q
for the three and nine months ended March 31, 1996 should be read in
conjunction with the Company's annual report on Form 10-K for the fiscal
year ended June 30, 1995.
2. ACQUISITIONS
On June 30, 1995, the Company consummated its acquisition of Broadcast
International, Inc. ("BII"). The following unaudited pro forma combined
results of operations for the nine months ended March 31, 1995 assume the
acquisition had occurred on July 1, 1994. These results are not indicative
of results that would have been obtained had the acquisition occurred on
July 1, 1994, and are not intended to be a projection of future results.
Revenues $90,020,000
Net income $15,431,000
Primary earnings per share $0.51
Fully diluted earnings per share $0.51
In connection with the acquisition of BII, management developed and
implemented plans to combine certain BII operations with the Company's
existing operations and consolidate certain of BII's facilities in Utah.
Therefore, as of June 30, 1995, the Company accrued, as part of the
purchase price of BII, $1,369,000 to cover the cost of the involuntary
termination of certain employees and obligations for leased space that
will become idle as a result of the consolidation of facilities. During
the three and nine months ended March 31, 1996, the Company charged
approximately $141,000 and $775,000, respectively, of severance and lease
costs against this accrual. In addition, the Company expensed merger and
consolidation costs of $155,000 and $1,865,000 in the three and nine months
ended March 31, 1996, respectively.
3. LONG-TERM DEBT
In March 1996, the Company entered into a $36,500,000 loan agreement with
Society National Bank, a KeyCorp subsidiary. The agreement provides for
an acquisition line of credit of $30,000,000, a revolving line of credit of
$3,000,000 and a term loan of $3,500,000. The lines of credit are available
until December 31, 2000, with the amount available under the acquisition
line of credit decreasing over time. The term loan matures on December 31,
1999 with principal payments of $250,000 due quarterly beginning
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DATA BROADCASTING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1996. Under this agreement substantially all of the assets of
the Company and its subsidiaries are collateralized. All facilities accrue
interest at variable rates with the interest rate on the term loan being
7.6875% as of March 31, 1996. DBC had not drawn on the line of credit
facilities as of March 31, 1996. This agreement includes various restrictive
covenants and requires the Company to maintain certain financial ratios.
At March 31, 1996, the Company was in compliance with these covenants.
In conjunction with this agreement, DBC prepaid its outstanding bank debt
by March 31, 1996 using the proceeds from the term loan and existing cash
reserves, except for the term loan with Midlantic Bank, which was paid on
April 29, 1996. At March 31, 1996, the Company has classified $2,030,000
as restricted cash and payable from restricted cash in anticipation of the
April prepayment of the Midlantic obligation. DBC expects to record a
pre-tax charge of approximately $373,000 in the fourth quarter of fiscal
1996 as a result of the prepayment of the Midlantic obligation.
4. CNBC PROCEEDS AND OBLIGATIONS
On March 1, 1996, DBC received a final payment of approximately $7,738,000
from the Consumer News and Business Channel ("CNBC") as the result of
the arbitration of matters related to CNBC's purchase of certain Financial
News Network Inc. ("FNN") media assets in May 1991. The gross amounts
payable for commissions, expenses and obligations to claimholders
approximating $4,785,000, less claims owned by DBC of approximately $345,000,
will be paid in the fourth quarter of fiscal 1996. As of March 31, 1996,
approximately $3,320,000 of the proceeds had been classified as restricted
cash and payable from restricted cash as required under the CNBC Proceeds
Security Agreement.
5. CONTINGENCIES
Under the terms of the merger agreement whereby the Company acquired Capital
Management Sciences ("CMS"), DBC may pay the former CMS shareholders up to
$6,840,000 of additional cash based on the pre-tax earnings of CMS over
the three-year period commencing January 31, 1994 and ending January 31,
1997. Contingent cash payments will be added to the acquisition cost
when determinable and amortized prospectively over the then remaining life
of goodwill. As of March 31, 1996, the Company had paid $2,423,000 under
these provisions and accrued $1,710,000 of additional payments.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Information Services Division ("ISD") includes DBC West, Market
Information Corporation (operating under the trade name "BMI") and Capital
Management Sciences ("CMS"). ISD provides real-time stock market quotes,
equity and fixed income analytics, financial market information and news,
access to historical databases, and other information to individual
investors, traders and institutional clients. ISD also provides sports
data and information to sports enthusiasts. The Business Services Division
includes Instore Satellite Network ("ISN") which delivers point to multipoint
communication services, primarily to retail merchants and CheckRite
International, Inc. ("CRI") which provides check recovery and check
verification data and services to retail merchants. The Company distributes
its services via wireless communication devices that rely on FM subcarriers
and satellite transmission, as well as cable television systems, telephone
lines, the Internet and other means of transmission. BMI, ISN and CRI are
subsidiaries of Broadcast International, Inc. ("BII"), acquired on
June 30, 1995. Effective May 1, 1995, the Company sold substantially all
of the assets of Shark Information Services Corp. ("Shark"), a provider of
financial market information and analytical capabilities to institutional
investors.
RESULTS OF OPERATIONS
SELECTED FINANCIAL DATA ($ Thousands)
For the Periods Ended March 31,
Three Months Nine Months
1996 1995 1996 1995
Revenues:
Information Services Division:
DBC West $11,937 $10,269 $35,330 $29,812
BMI 4,633 - 12,770 -
CMS 4,043 3,404 11,488 9,732
Business Services Division:
ISN 3,673 - 13,610 -
CRI 4,078 - 10,999 -
Shark - 5,891 - 18,335
28,364 19,564 84,197 57,879
Cost of services 10,929 8,220 32,693 24,694
Selling, general and administrative:
Sales and marketing 4,789 3,117 14,038 9,049
G&A 4,429 3,126 13,079 9,464
Depreciation and amortization:
Equipment and
leasehold improvements 2,316 1,901 6,957 5,465
Goodwill (tax deductible) 496 432 1,401 1,291
Goodwill (non-deductible) 462 - 1,386 -
Software development 303 220 883 627
All other 517 81 1,593 262
Merger and consolidation costs 155 - 1,865 -
Income from operations $ 3,968 $ 2,467 $10,302 $ 7,027
<PAGE>
Three Months
ISD revenues grew by 51 percent, primarily attributable to the acquisition
of the BMI subscriber base. DBC West experienced a 15 percent increase in
subscribers to 26,000 at March 31, 1996 from 22,700 at March 31, 1995.
Over that period, DBC West revenues grew 16 percent from $10.3 million
to $11.9 million. CMS revenues grew from $3.4 million to $4.0 million
principally as a result of a 9 percent increase in its customer base from
March 31, 1995 to March 31, 1996. BMI revenues increased 35 percent from
$3.4 million for the three months ended March 31, 1995 to $4.6 million for
the three months ended March 31, 1996.
Overall revenues at the Business Services Division decreased as compared
with the quarter ended March 31, 1995. ISN revenues declined 16 percent
from $4.4 million to $3.7 million while CRI revenues improved 17 percent
from $3.5 million to $4.1 million. ISN typically records a significant amount
of revenue upon installation of a new satellite network. This non-recurring
revenue may distort quarterly comparisons from year to year, depending on
the timing of new installations. This is the reason for ISN's revenue decline
in the third quarter.
Revenues disclosed for the BII entities for the quarter ended March 31, 1995
have been presented for comparative purposes and were not included in DBC's
consolidated results of operations.
Excluding $0.2 million of costs incurred in connection with the acquisition
and consolidation of BII, operating income increased 67 percent and
operating margins improved from 13 to 15 percent. The margin improvement
was largely caused by the sale of the assets of Shark, effective May 1, 1995,
which had no operating income during the third quarter of fiscal 1995 on
$5.9 million of revenues. Operating margins for the other businesses
decreased overall due to the Company's investment in new on-line businesses,
international markets and CMS' new BondVu service, which aggregated
approximately $1.3 million in the fiscal 1996 third quarter.
The $9.2 million of third quarter fiscal 1996 SG&A expenses were split
evenly between selling costs and G&A expenses, a similar ratio to the
comparable fiscal 1995 period. The increases in both categories are
principally due to the BII acquisition. Excluding the BII entities, selling
costs decreased $0.3 million and G&A expenses increased $0.1 million, as
decreases from the sale of the assets of Shark were offset by increases at the
other DBC divisions.
Of the $4.1 million in third quarter fiscal 1996 depreciation and
amortization, $1.0 million is attributable to goodwill amortization.
This exceeds third quarter fiscal 1995 goodwill amortization by $0.5 million
due to the acquisition of BII. The $0.9 million increase in other
depreciation and amortization is primarily the result of fixed asset
depreciation at the new BII entities. Excluding the effects of the BII
acquisition, other depreciation and amortization decreased $0.6 million,
largely due to the sale of the assets of Shark.
As the result of the arbitration of matters related to CNBC's purchase of
certain FNN media assets in May 1991, DBC received a final payment of
approximately $7.7 million in March 1996 from CNBC. The net proceeds after
required commissions, expenses, payments to claimholders under FNN's Plan
of Reorganization and taxes (the "CNBC net proceeds") approximated $1.9
million ($3.3 million before taxes).
<PAGE>
The effective tax rate for the three months ended March 31, 1996 was
41 percent. This was higher than in the comparable 1995 period, principally
because of non-deductible goodwill amortization associated with the BII
acquisition. The Company expects its full year effective tax rate to be
approximately 44 percent.
Excluding the CNBC net proceeds of $0.06 per share, net income totaled
$2.3 million, equal to $0.07 per primary share. Last year's third quarter net
income was $1.3 million, excluding the $0.37 per share impact of the CNBC net
proceeds received in the third quarter of fiscal 1995. Related primary
earnings per share was $0.06 and based on 26 percent fewer shares outstanding.
The increase in weighted average shares outstanding was mainly due to the
issuance of 6.1 million shares and options to acquire 1.0 million shares
related to the BII acquisition.
Nine Months
ISD revenues grew by 51 percent, primarily attributable to the
acquisition of the BMI subscriber base and the aforementioned
increase in DBC West and CMS subscribers. Over that period, DBC West
revenues grew 19 percent from $29.8 million to $35.3 million and
CMS revenues grew from $9.7 million to $11.5 million. BMI revenues
increased 36 percent with $12.8 million for the first nine months of fiscal
1996 as compared to $9.4 million for the nine months ended March 31, 1995.
Both companies within the Business Services Division posted revenue increases
over the nine months ended March 31, 1995. ISN revenues improved 5 percent
from $12.9 million to $13.6 million and CRI revenues increased 12 percent
from $9.8 million to $11.0 million.
Revenues disclosed for the BII entities for the nine months ended March 31,
1995 have been presented for comparative purposes and were not included
in DBC's consolidated results of operations.
Excluding $1.9 million of costs incurred in connection with the acquisition
and consolidation of BII, operating income increased 73 percent and
operating margins improved from 12 to 14 percent. The margin improvement
was largely caused by the sale of the assets of Shark, which had an operating
margin of 3 percent during the first nine months of fiscal 1995. Operating
margins for the other businesses decreased overall due to the Company's
investment in new on-line businesses, international markets and CMS' new
BondVu service, which aggregated approximately $3.3 million in the first
three quarters of fiscal 1996.
Selling expenses for the nine months ended March 31, 1996 were $14.0 million
compared with $9.0 million for the nine months ended March 31, 1995. The
increase was primarily attributable to the acquisition of BII. Excluding the
BII entities, selling expenses decreased by $0.5 million as increases at
DBC West and CMS were offset by the sale of the assets of Shark. G&A
expenses for the BII entities were $4.0 million, representing the total
increase for the nine month period, while G&A expenses at the DBC
entities declined by $0.4 million due to the sale of the assets of Shark.
Substantially all of the $1.5 million increase in year-to-date goodwill
amortization was attributable to the acquisition of BII. Other depreciation
and amortization increased by $3.1 million, of which the BII entities
contributed $4.5 million, with the offsetting decrease caused by the sale
of the assets of Shark.
<PAGE>
The effective tax rate for the nine months ended March 31, 1996 was
44 percent. This was higher than in the comparable 1995 period, principally
because of non-deductible goodwill amortization associated with the BII
acquisition.
Excluding the CNBC net proceeds of $0.06 per share and merger and
consolidation costs of $0.03 per share, net income for the nine months ended
March 31, 1996 totaled $6.3 million, equal to $0.20 per primary share. Last
year's net income for this same period, excluding the $0.37 per share impact
of the CNBC net proceeds received in the third quarter of fiscal 1995, was
$3.8 million, or $0.16 per share. This represents a 25 percent increase in
adjusted net income per share despite a 33 percent increase in weighted
average shares outstanding.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $13.6 million and $10.7 million for
the nine months ended March 31, 1996 and 1995, respectively. The increase was
primarily attributable to growth in operating income, excluding merger and
consolidation costs. The Company paid $16.9 million for
acquisitions during the first nine months of fiscal 1996, including the
cash portion and transaction costs of the BII acquisition, the acquisition of
a CRI franchisee and contingent earnout payments for the CMS acquisition.
The Company invested $11.1 million of cash in the first nine months of fiscal
1996 for property and equipment and capitalized software development
compared to $8.3 million in the comparable fiscal 1995 period.
The increase in long-term debt payments from the first nine months of
fiscal 1995 to the first nine months of fiscal 1996 was principally due
to bank debt assumed as part of the BII acquisition that has been paid in
full and the pay down of certain bank debt in conjunction with a new
loan agreement, as described below.
In March 1996, the Company entered into a $36.5 million loan agreement with
Society National Bank, a KeyCorp subsidiary. The agreement provides for
an acquisition line of credit of $30.0 million a revolving line of credit of
$3.0 million and a term loan of $3.5 million. The lines of credit are available
until December 31, 2000, with the amount available under the acquisition
line of credit decreasing over time. The term loan matures on December 31,
1999 with principal payments of $0.3 million due quarterly beginning
September 30, 1996. Under this agreement substantially all of the assets of
the Company and its subsidiaries are collateralized. All facilities accrue
interest at variable rates with the interest rate on the term loan being
7.6875% as of March 31, 1996. DBC had not drawn on the line of credit
facilities as of March 31, 1996. This new loan agreement includes various
restrictive covenants and requires the Company to maintain certain
financial ratios. At March 31, 1996, the Company was in compliance with
these covenants.
In conjunction with this agreement, DBC prepaid its outstanding bank debt
by March 31, 1996 using the proceeds from the term loan and existing cash
reserves, except for the term loan with Midlantic Bank, which was paid on
April 29, 1996. At March 31, 1996, the Company has classified $2.0 million
as restricted cash and payable from restricted cash in anticipation of the
April prepayment of the Midlantic obligation. DBC expects to record a
pre-tax charge of approximately $0.4 million as a result of the prepayment
of the Midlantic obligation.
<PAGE>
Management believes that the cash generated by operating activities, together
with its current financing facilities, are sufficient to meet the short
and long-term needs of the current operations of the Company.
BUSINESS DEVELOPMENT AND OUTLOOK
The Company expects its income from operations to continue growing, as
management expects that ISD revenues will increase from the core businesses
of DBC West, BMI and CMS. In addition to its traditional broadcast systems,
the Company recently began to offer certain services online over the Internet
on its own World Wide Web site, as well as on the web sites of USA Today,
U.S. News and World Report, AsiaOne, Washington Post and over 30 other
companies throughout the world.
The Company is continuing to invest in the development and implementation
of DBC's online services to take advantage of the interest in those markets.
The Company is also investing in CMS' new BondVu service to respond to the
demands of the professional fixed income investor. BondVu is expected to be
released in the summer of 1996.
The Company launched DBC MarketWatch in April 1996. This latest Internet
financial data service offers real-time stock market quotes, fundamental and
historical data, a specialized business news headline service, portfolio
features, links to online brokerage services and other investment-related
services to nonprofessional users starting at $29.95 per month.
The Company's ISN division launched its BusinessVision service on
April 1, 1996. BusinessVision, a new business education service which
can be received using a small, direct broadcast satellite dish, will be
offered by subscription averaging approximately $300 per month. Subscribers
for this new product total more than 300 thus far.
In February 1996, DBC's joint venture in Hong Kong began
providing Signal service to local customers. The data feed
currently consists of Hong Kong stock market data and will be
expanded in the future to include other international data.
In January 1996, DBC and Travelers Group, in an equal partnership, entered
into an agreement with Internet Financial Network, Inc. ("IFN") that
includes an option to acquire controlling interest of IFN. The IFN products
utilize proprietary data warehousing and search engine software to provide
electronic access to the Securities and Exchange Commission's EDGAR database.
Financial information market demand, which is segmented according to the
types of information provided, is largely dependent upon activity levels in
the securities markets. The Company's share of that demand is based on
its ability to compete effectively with other financial information
providers. In the event that the U.S. financial markets were to suffer a
prolonged period of investor inactivity in trading securities, the Company's
ability to maintain growth could be adversely affected. The degree of such
consequences is uncertain. The Company is pursuing a number of projects to
increase its share of its current markets and to broaden the scope of the
markets in which the Company competes.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Shark Information Services Corp. v. Crum & Forster Commercial
Insurance, et al., Civil Action No. 109274/93, commenced on April 14, 1993 in
the New York State Supreme Court. Shark Information Services Corp.,
("Shark"), sued its former insurance carriers, Crum & Forster Commercial
Insurance and United States Fire Insurance Company (collectively, the
"Insurers"), its former insurance consultant, Kelso Risk Management, Inc.,
and its former insurance broker, Robert M. Kelso. Shark sought $400,000 in
compensatory damages. After Shark was awarded summary judgment on liability,
Crum & Forster agreed to settle the action for $400,000. The settlement was
closed in May, 1996.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a. The following exhibits are filed as part of this report:
Exhibit
Number Description of Exhibit
11 Statement re Computation of Earnings per Share
27 Financial Data Schedule
b. Reports on Form 8-K
During the quarter ended March 31, 1996, the Registrant did not
file a Current Report on Form 8-K. Subsequently, on April 9, 1996,
the Registrant filed a Current Report on Form 8-K, reporting the
Registrant's new loan agreement under Items 5 and 7.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DATA BROADCASTING CORPORATION
(Registrant)
Dated: May 14, 1996 By: /s/ Allan R. Tessler
Allan R. Tessler
Co-Chief Executive Officer
Dated: May 14, 1996 By: /s/ Alan J. Hirschfield
Alan J. Hirschfield
Co-Chief Executive Officer
Dated: May 14, 1996 By: /s/ Mark F. Imperiale
Mark F. Imperiale
Executive Vice President
and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
11 Statement re: Computation of Earnings per Share 16
<PAGE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
(In thousands, except per share amounts)
Primary Earnings per Common Share
Net income $4,120 $10,324 $7,095 $12,899
Add: Interest on
assumed debt payments,
net of tax - 45 - 59
Net earnings applicable
to common stock $4,120 $10,369 $7,095 $12,958
Common shares outstanding
at beginning of period 29,273 22,386 29,273 22,386
Less reduction for
Class 7 shares - (25) - (25)
Shares issuable from
assumed exercise of
stock options
and warrants 2,091 1,411 2,071 1,675
Shares issued from
conversion of stock
options and warrants 781 109 630 64
Weighted average number
of common shares
outstanding 32,145 23,881 31,974 24,100
Primary earnings per share $0.13 $0.43 $0.22 $0.54
Fully Diluted Earnings per Common Share
Net income $4,120 $10,324 $7,095 $12,899
Add: Interest on
assumed debt payments,
net of tax - 5 - 18
Net earnings applicable
to common stock $4,120 $10,329 $7,095 $12,917
Common shares outstanding
at beginning of period 29,273 22,386 29,273 22,386
Less reduction for
Class 7 shares - (25) - (25)
Shares issuable from
assumed exercise of
stock options
and warrants 2,035 1,519 2,187 1,715
Shares issued from
conversion of stock
options and warrants 1,968 141 1,367 83
Weighted average number
of common shares
outstanding 33,276 24,021 32,827 24,159
Fully diluted earnings
per share $0.12 $0.43 $0.22 $0.53
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statements of operations and balance sheets and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
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<SECURITIES> 0
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<CURRENT-LIABILITIES> 31,090
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0
0
<COMMON> 312
<OTHER-SE> 112,699
<TOTAL-LIABILITY-AND-EQUITY> 154,542
<SALES> 0
<TOTAL-REVENUES> 84,197
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<OTHER-EXPENSES> 12,220
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<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
