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, 1997.
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, Midvale, Utah 84047
(Address of principal administrative offices)
Registrant's telephone number, including area code: (801) 562-2252
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, 1997 was 33,204,063.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------ ------------------
1997 1996 1997 1996
---- ---- ---- ----
REVENUES $23,579 $20,613 $69,188 $59,588
COSTS AND EXPENSES
Cost of services 8,547 6,269 24,314 17,870
Selling, general and
administrative 9,858 7,720 27,002 22,685
Depreciation and
amortization 3,632 2,690 10,484 7,945
Merger and
consolidation costs - 155 - 1,865
------- ------- ------- -------
Total costs and expenses 22,037 16,834 61,800 50,365
------- ------- ------- -------
INCOME FROM OPERATIONS 1,542 3,779 7,388 9,223
Adjustment of gains on
sales of assets - 3,299 952 3,299
Losses from Hong Kong
joint venture - (163) (828) (444)
Interest income (expense),
net 45 (35) 76 (166)
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,587 6,880 7,588 11,912
Provision for income taxes 589 2,760 3,165 5,131
------- ------- ------- -------
INCOME FROM CONTINUING
OPERATIONS 998 4,120 4,423 6,781
DISCONTINUED OPERATIONS
Income (loss) from discontinued
operations, net of tax (427) 0 (663) 314
Loss on disposal of
discontinued operations,
net of tax (21,264) - (21,264) -
------- ------- ------- -------
Total discontinued
operations (21,691) 0 (21,927) 314
------- ------- ------- -------
NET INCOME (LOSS) ($20,693) $4,120 ($17,504) $7,095
======= ======= ======= =======
NET INCOME (LOSS) PER SHARE
Primary:
Income from continuing
operations $0.03 $0.13 $0.13 $0.21
Income (loss) from
discontinued operations (0.64) 0.00 (0.65) 0.01
------ ------ ------ ------
Net income (loss) ($0.61) $0.13 ($0.52) $0.22
====== ====== ====== ======
Fully Diluted:
Income from continuing
operations $0.03 $0.12 $0.13 $0.21
Income (loss) from
discontinued operations (0.64) 0.00 (0.65) 0.01
------ ------ ------ ------
Net income (loss) ($0.61) $0.12 ($0.52) $0.22
====== ====== ====== ======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Primary 33,917 32,145 33,733 31,974
Fully diluted 33,958 33,276 33,836 32,827
See accompanying notes to consolidated financial statements
<PAGE>
DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31, June 30,
1997 1996
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $15,471 $ 19,667
Accounts receivable, net 10,162 9,645
Net assets of discontinued operations 29,000 -
Other current assets 2,554 6,009
------- -------
Total Current Assets 57,187 35,321
Property and equipment, less accumulated depreciation
of $27,596 and $30,449 17,878 22,838
Software development costs, net of accumulated
amortization of $3,762 and $2,445 5,051 4,783
Goodwill, net of accumulated amortization of
$7,317 and $6,050 48,651 71,539
Deferred tax assets, net 10,647 13,095
Other assets 3,734 6,391
-------- --------
TOTAL ASSETS $143,148 $153,967
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,329 $7,061
Accrued liabilities 15,736 11,374
Current maturities of long-term debt 3,700 3,851
Other current liabilities 717 2,366
------- -------
25,482 24,652
Deferred revenue 6,863 6,802
------- -------
Total Current Liabilities 32,345 31,454
Long-term debt 1,750 2,558
Other non-current liabilities 1,665 3,858
------- -------
TOTAL LIABILITIES 35,760 37,870
Commitments and contingencies
Stockholders' Equity:
Common stock (32,696 shares and 31,338 shares) 335 313
Additional paid-in capital 96,690 82,693
Retained earnings 15,587 33,091
Treasury stock (5,224) -
-------- --------
TOTAL STOCKHOLDERS' EQUITY 107,388 116,097
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $143,148 $153,967
======== ========
See accompanying notes to consolidated financial statements
<PAGE>
DATA BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
March 31,
-------------------
1997 1996
------ ------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss) ($17,504) $7,095
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 14,626 12,220
Write-down of net assets of discontinued
operations, net of tax 21,264 -
Deferred income taxes 2,547 3,572
CNBC proceeds, net of obligations and taxes - (1,847)
Other non-cash items, net 2,500 2,497
Changes in operating assets and liabilities, net (9,043) (9,957)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 14,390 13,580
------- -------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchase of property and equipment (8,321) (9,852)
Cash paid for acquisitions (3,448) (18,406)
Capitalized software development costs (1,585) (1,241)
Investment in joint ventures (1,568) (1,134)
Receipt of contingent payment from CNBC - 7,738
Increase in restricted cash - (5,566)
Proceeds from the sale of Shark - 1,331
Other, net 22 (408)
------- -------
NET CASH USED IN INVESTING ACTIVITIES (14,900) (27,538)
------- -------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Purchase of treasury stock (5,434) -
Exercise of common stock options and warrants 2,608 6,324
Payments of long-term debt (834) (11,184)
Issuance of long-term debt - 3,500
Other, net (26) (220)
------- -------
NET CASH USED IN FINANCING ACTIVITIES (3,686) (1,580)
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,196) (15,538)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 19,667 32,267
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $15,471 $16,729
======= =======
See accompanying notes to consolidated financial statements
<PAGE>
DATA BROADCASTING CORPORATION AND SUBSIDIARIES
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, 1997 should be read in conjunction with the Company's
annual report on Form 10-K for its fiscal year ended June 30, 1996.
2. ACQUISITIONS
Effective July 1, 1996, the Company acquired by merger all of the common stock
of Las Vegas Sports Consultants, Inc. ("LVSC") in exchange for 330,206 shares
of the Company's common stock, valued at $3,100,000. LVSC is the leading
"opening line" odds maker in Las Vegas.
Effective July 1, 1996, the Company acquired all of the outstanding common
stock of Instant Odds Network, Inc. ("ION") for $2,600,000 in cash. ION has
the rights to transmit electronically real-time betting odds from six major
casinos in Las Vegas and has been doing so through DBC's sports products for
the past two years. The agreement contains a contingent earnout provision,
payable in the Company's common stock, based upon the results of operations of
ION for the three-year period ending June 30, 1999.
Effective September 16, 1996, the Company acquired all of the outstanding
common stock of Dajoy Enterprises, Inc., dba Check Network ("CN"), in exchange
for 128,700 shares of the Company's common stock, valued at $1,000,000. CN,
which was merged into CheckRite International ("CRI"), provides check recovery
services.
Effective October 31, 1996, the Company acquired substantially all of the
assets of Federal News Service Group, Inc. ("FNS"), subject to certain
liabilities, for 804,841 shares of the Company's common stock, valued at
$6,650,000. The agreement also provides for a contingent earnout, payable in
the Company's common stock, based upon FNS' results of operations for the year
ending October 31, 1997. FNS provides verbatim transcripts of major federal
government hearings to approximately 350 news organizations, political
associations and corporations around the world.
The above transactions have been accounted for as purchases and goodwill is
being amortized over 5 to 25 years using the straight-line method.
Under the terms of the merger agreement whereby the Company acquired Capital
Management Sciences ("CMS"), DBC is required to pay the former CMS
shareholders 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 are added to the acquisition cost when determinable
and amortized prospectively over the then remaining life of goodwill. As of
March 31, 1997 the Company had paid $4,133,000 under these provisions and
accrued $2,707,500 of additional payments, which were subsequently made in
April 1997.
3. DISCONTINUED OPERATIONS
Effective March 31, 1997, the Company adopted a plan to sell its CRI and
Instore Satellite Network ("ISN") businesses. Accordingly, these businesses
have been accounted for as discontinued operations in the accompanying
financial statements. The Company expects that these businesses will be sold
no later than December 31, 1997.
The estimated loss on the disposal of CRI and ISN is $21,264,000 (net of taxes
of $7,791,000), consisting of an estimated loss on disposal of the business of
$20,653,000 and a provision of $611,000 for anticipated operating losses until
disposal. This loss resulted primarily from the non-cash write-off of
the net assets of the businesses. Prior to the write-off, the net assets
included $34,239,000 of unamortized goodwill. These operations have
continued to generate positive operating cash flow. Estimated costs associated
with these disposals, including taxes, have been recorded as accrued
liabilities.
Revenues for these operations were as follows:
Three Months Ended Nine Months Ended
March 31, 1997 March 31, 1997
CRI $4,702,000 $13,551,000
ISN 3,586,000 10,674,000
4. JOINT VENTURES
In the first nine months of fiscal 1997, the Company recorded a pre-tax charge
of $606,000 to write-off its remaining investment obligation in a joint
venture in Hong Kong and $222,000 of equity losses from this investment. The
Company and its joint venture partner concluded that its core product should
be discontinued, given the lack of acceptance in the market.
5. ADJUSTMENT OF GAINS ON SALES OF ASSETS
In the second quarter of fiscal 1997, the Company adjusted its gain on the
fiscal 1995 sale of substantially all of the assets of Shark Information
Services Corp. and the fiscal 1996 gain from the Consumer News and Business
Channel proceeds by recording a pre-tax benefit of $952,000. These benefits
are the result of reductions in certain reserves recorded at the time of the
initial transactions, which management has determined to no longer be
necessary due to the resolution of certain contingencies and the revision of
certain estimates.
6. STOCKHOLDERS' EQUITY
On November 12, 1996, the Company announced that its board of directors
authorized the repurchase of up to 2 million shares of common stock. This
plan will continue to be implemented from time to time in either open market
or private transactions. As of March 31, 1997 the Company had repurchased
760,000 shares at a cost of $5,434,000. In addition, approximately 219,000
and 854,000 options and warrants were exercised during the three and nine
months ended March 31, 1997, respectively.
7. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"),
which is effective for financial statements for periods ending after
December 15, 1997. SFAS 128 establishes new standards for computing and
presenting earnings per share ("EPS"). Management believes that basic EPS
computed under the new method could be materially higher than the current
primary EPS calculation, depending upon the Company's stock price.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company's continuing operations include DBC West, Market Information
Corporation (operating under the trade name "BMI") and Capital Management
Sciences ("CMS"), which provide real-time stock market quotes, fixed income
prices, agribusiness information, equity and fixed income analytics, financial
market information and news, access to historical data bases, and other
information to individual investors, traders and institutional clients. They
also provide sports data and information to sports enthusiasts, and
international news and government information to media, government agencies,
corporate and international clients. Continuing operations also include the
Lawyers Communications Network ("LCN"), a development stage joint venture
which will provide continuing legal education and other information via
satellite to legal professionals. The Company distributes its services via
communication devices that rely on FM subcarriers, satellite transmission,
cable television systems, telephone lines, the Internet and other means of
transmission.
Discontinued operations include Instore Satellite Network ("ISN") which
delivers point to multipoint communication services, primarily to retail
merchants and business associations, and CheckRite International, Inc. ("CRI")
which provides check recovery and check verification data and services to
retail merchants.
RESULTS OF CONTINUING OPERATIONS
SELECTED FINANCIAL DATA ($ Millions)
For the Periods Ended March 31,
-----------------------------------------
Three Months Nine Months
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues
DBC West $13.1 $11.9 $38.6 $35.3
BMI 5.5 4.6 15.9 12.8
CMS 4.8 4.1 14.0 11.5
Other* 0.2 - 0.7 -
----- ----- ----- -----
Total 23.6 20.6 69.2 59.6
Cost of services 8.6 6.2 24.3 17.9
Selling, general and administrative
Sales and marketing 5.3 4.4 15.2 13.2
G&A 4.6 3.3 11.8 9.5
Depreciation and amortization
Equipment and leasehold
improvements 2.1 1.7 6.3 5.1
Goodwill 0.9 0.6 2.7 1.7
Software development and other 0.6 0.4 1.5 1.1
Merger and consolidation costs - 0.2 - 1.9
----- ----- ----- -----
Income from operations $1.5 $3.8 $7.4 $9.2
===== ===== ===== =====
Income (loss) from operations by unit
DBC West/BMI $4.1 $4.2 $12.1 $11.6
CMS 1.3 1.2 4.1 3.2
Other initiatives* (3.0) (0.7) (6.3) (1.5)
Corporate and unallocated (0.9) (0.8) (2.5) (2.2)
Merger and consolidation
costs - (0.1) - (1.9)
----- ----- ----- -----
$1.5 $3.8 $7.4 $9.2
===== ===== ===== =====
*New product and infrastructure development initiatives, including AgCast,
BondVu, DBC Online and the Lawyers Communications Network.
<PAGE>
Discontinued Operations
In the third quarter of fiscal 1997 the Company adopted a plan to sell its CRI
and ISN businesses. Accordingly, the results of operations for these
businesses are being reported as discontinued operations. The loss from
discontinued operations was $21.7 million ($0.64 per share) and $21.9 million
($0.65 per share) for the three and nine months ended March 31, 1997,
respectively. This loss was primarily due to the non-cash write-off of
the net assets of the businesses. Prior to the write-off, the net assets
included $34.2 million of unamortized goodwill. These operations have
continued to generate positive operating cash flow.
Continuing Operations
Three Months
Revenues from continuing operations grew by 14 percent due to growth at all
operations. The nine percent growth in DBC West revenue, from $11.9 million
to $13.1 million, was due to an increase in subscribers, and the acquisitions
of Instant Odds Network, Las Vegas Sports Consultants, and Federal News
Service. DBC West experienced a five percent increase in subscribers to
27,180 at March 31, 1997 from 25,992 as of March 31, 1996. BMI's revenues
increased by 18 percent over the prior year mainly due to a four percent
increase in subscribers from 8,486 at March 31, 1996 to 8,819 at March 31,
1997. CMS' revenues grew from $4.1 million to $4.8 million primarily as a
result of a 11 percent increase in its customer base from March 31, 1996 to
March 31, 1997.
Income from operations for the quarter decreased to $1.5 million from $3.8
million. The decrease was primarily due to (i) development activities for
AgCast, an online agricultural information service, the Lawyers Communications
Network, a joint venture in conjunction with the American Bar Association, and
the Company's Online services, (ii) initial stage marketing for BondVu and
(iii) market repositioning for the Company's Signal, QuoTrek and BMI products.
In total the Company expensed $3.2 million for these activities in this year's
third quarter as compared with $0.7 million for similar activities in last
year's third quarter. In addition, the Company capitalized $0.2 million of
software development costs related to these activities in this year's third
quarter compared with $0.4 million in last year's third quarter.
In the third quarter of fiscal 1996, DBC received a final payment from the
Consumer News and Business Channel ("CNBC") as a result of the arbitration of
matters related to CNBC's purchase of certain Financial News Network Inc.
media assets in 1991. The net proceeds approximated $1.9 million ($3.3
million before taxes).
Net income from continuing operations for the third quarter of fiscal 1997
totaled $1.0 million, equal to $0.03 per primary and fully diluted share.
Last year's third quarter net income from continuing operations was $4.1
million, or $0.13 per primary share and $0.12 per fully diluted share,
including $0.06 per primary and fully diluted share from the CNBC proceeds.
Primary weighted average shares outstanding grew by six percent, and fully
diluted weighted average shares outstanding grew by two percent, principally
due to the shares issued for the acquisitions of Check Network, Las Vegas
Sports Consultants, and Federal News Service, partially offset by the
Company's stock buyback program.
Nine Months
Revenues from continuing operations grew by 16 percent in the comparative
nine-month period, primarily attributable to the aforementioned acquisitions,
as well as subscriber and customer base growth. DBC West's revenues grew nine
percent when compared with the prior year, from $35.3 million to $38.6
million. BMI's revenues grew 25 percent from $12.8 million to $15.9 million.
CMS revenues grew from $11.5 million to $14.0 million, or 22 percent.
Operating income for the nine months ended March 31, 1997 was $7.4 million,
compared with $11.1 million, excluding non-recurring merger and consolidation
costs of $1.9 million, for the same period in fiscal 1996. The decrease in
<PAGE>
operating income and operating margins was due to the Company's investment in
new business and products described above. The Company expensed $7.0 million
for these activities in the nine months ended March 31, 1997 as compared with
$1.5 million in the corresponding prior-year period.
Depreciation and amortization increased from $7.9 million for the nine months
ended March 31, 1996 to $10.5 million for the same period in fiscal 1997. The
increase of $0.9 million in goodwill amortization was the result of the
aforementioned acquisitions.
The nine months ended March 31, 1997 also include the following non-recurring
items: (i) a pre-tax charge of $0.6 million for the write-off of the
Company's joint venture in Hong Kong and (ii) pre-tax benefits of $1.0 million
related to the fiscal 1995 sale of substantially all of the assets of Shark
Information Services Corp. ("Shark") and proceeds received in fiscal 1996 from
CNBC. The Hong Kong write-off occurred as management concluded that the
operation's core product should be discontinued due to the lack of acceptance
in the market. The benefits resulted from the resolution of certain
contingencies and the revision of certain estimates associated with the Shark
and CNBC transactions.
Net income from continuing operations for the nine months ending March 31,
1997 was $4.4 million, equal to $0.13 per primary and fully diluted share.
Net income for the same period in the prior year was $6.8 million, or $0.21
per primary and fully diluted share, including $0.06 per share from the CNBC
proceeds. Primary weighted average shares outstanding grew by six percent,
and fully diluted weighted average shares outstanding grew by three percent,
principally due to the shares issued for the acquisitions of Check Network,
Las Vegas Sports Consultants, and Federal News Service, partially offset by
the Company's stock buyback program.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $14.4 million and $13.6 million for
the nine months ended March 31, 1997 and 1996, respectively. This increase
was principally due to improved operating earnings after adjustment for
depreciation and amortization, and an increase in accrued liabilities. The
Company paid $3.4 million for acquisitions, net of cash acquired, during the
first nine months of fiscal 1997, including the cash payment for the
acquisition of Instant Odds Network, and contingent earnout payments for the
CMS acquisition. The Company invested $9.9 million of cash in the first three
quarters of fiscal 1997 for property and equipment and capitalized software
development compared to $11.1 million in the comparable fiscal 1996 period.
The decrease in long-term debt payments from the first three quarters of
fiscal 1996 to the first three quarters of fiscal 1997 was principally due to
the debt refinancing that occurred during fiscal 1996. The Company used $5.4
million to purchase treasury shares in a buyback program announced in November
1996. The Company is authorized to buy up to 2 million shares, of which 0.8
million were repurchased through March 31, 1997.
The Company currently expects cash generated from operations to increase
further during fiscal 1997, should current market conditions remain stable.
Management believes that the cash generated by operating activities, together
with its existing cash and financing facilities, are sufficient to meet the
short- and long-term needs of the current operations and the anticipated
capital expenditures of the Company.
DBC's debt agreement with Key Bank National Association contains covenants
requiring the Company to maintain certain financial ratios with respect to
operations and financial position. This agreement also restricts the payment
of dividends to DBC's stockholders and limits the purchase of treasury stock.
At March 31, 1997 the Company was in compliance with these covenants.
BUSINESS DEVELOPMENT AND OUTLOOK
The Company expects to continue the aforementioned development and marketing
efforts at about the same or increased rates for the remainder of fiscal 1997.
The Company also expects that these expenditures will be funded by cash
generated from operations.
In January 1997, the Company launched the Internet-based portion of the AgCast
Network, an agricultural data service providing U.S. and international
<PAGE>
commodities and futures pricing, news, weather, stock quotes and market
analysis from five leading agricultural advisory groups. The service is being
targeted at U.S. farming and agricultural professionals. The Company expects
to launch the 18-inch dish satellite delivery of AgCast at the end of May
1997.
Also in January 1997, the Company and the American Bar Association formed the
Lawyers Communications Network, L.L.C., a limited liability corporation
("LCN"), for the development and sale of continuing legal education and other
information to the legal profession. LCN is currently developing programming
to be broadcast over the network. The network infrastructure is expected to
be in place for testing in July 1997 and LCN expects to begin broadcasting to
subscribers in September 1997.
Demand for financial market information 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 experience a
prolonged period of investor inactivity in trading securities, the Company's
business 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.
From time to time, the Company may publish forward-looking statements relating
to such matters as anticipated financial performance, business prospects,
technological developments, new products, research and development activities
and similar matters. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply
with the terms of the safe harbor, the Company notes that a variety of factors
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward-looking statements. The risks and uncertainties that may effect the
operations, performance, development and results of the Company's business
include the following:
- The presence of competitors with greater financial resources and
their strategic response to the company's new services.
- The response of customers to the Company's new marketing strategies.
- Activity levels in the securities markets.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various legal proceedings incidental to its business
operation, none of which is expected to have a material effect on the
financial condition or results of operations of the Company.
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, 1997, the Registrant did not file a Current
Report on Form 8-K.
<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 15, 1997 By: /s/ Allan R. Tessler
---------------------------
Allan R. Tessler
Co-Chief Executive Officer
Dated: May 15, 1997 By: /s/ Alan J. Hirschfield
---------------------------
Alan J. Hirschfield
Co-Chief Executive Officer
Dated: May 15, 1997 By: /s/ Mark F. Imperiale
---------------------------
Mark F. Imperiale
President, Chief Operating Officer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
- ----------- ----------- ------------
11 Statement re Computation of Earnings per Share 14
27 Financial Data Schedule 15
<PAGE>
EXHIBIT 11
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
(In thousands, except per share amounts)
Primary Earnings per Common share
Income from continuing operations $998 $4,120 $4,423 $6,781
Income (loss) from discontinued
operations (21,691) - (21,927) 314
-------- -------- -------- --------
Net income ($20,693) $4,120 ($17,504) $7,095
======== ======== ======== ========
Common shares outstanding at
beginning of period 31,338 29,273 31,338 29,273
Shares issuable from assumed
exercise of stock options and
warrants 971 2,091 1,221 2,071
Shares issued for acquisitions 1,263 - 872 -
Shares issued from conversion
of stock options and warrants 789 781 470 630
Repurchase of treasury shares (444) - (168) -
------- ------- ------- -------
Weighted average number of
common shares outstanding 33,917 32,145 33,733 31,974
======= ======= ======= =======
Primary earnings per share
Income from continuing
operations $0.03 $0.13 $0.13 $0.21
Income (loss) from discontinued
operations (0.64) - (0.65) 0.01
------- ------- ------- -------
Net income ($0.61) $0.13 ($0.52) $0.22
======= ======= ======= =======
Fully Diluted Earnings per Common Share
Income from continuing operations $998 $4,120 $4,423 $6,781
Income (loss) from discontinued
operations (21,691) - (21,927) 314
-------- -------- -------- --------
Net income ($20,693) $4,120 ($17,504) $7,095
======== ======== ======== ========
Common shares outstanding at
beginning of period 31,338 29,273 31,338 29,273
Shares issuable from assumed
exercise of stock options
and warrants 947 2,035 1,260 2,187
Shares issued for acquisitions 1,263 - 872 -
Shares issued from conversion of
stock options and warrants 854 1,968 534 1,367
Repurchase of treasury shares (444) - (168) -
------- ------- ------- -------
Weighted average number of common
shares outstanding 33,958 33,276 33,836 32,827
======= ======= ======= =======
Fully diluted earnings per share
Income from continuing
operations $0.03 $0.12 $0.13 $0.21
Income (loss) from discontinued
operations (0.64) - (0.65) 0.01
------ ------ ------ ------
Net income ($0.61) ($0.12) ($0.52) $0.22
====== ====== ====== ------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statements of income and balance sheets and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 15,471
<SECURITIES> 0
<RECEIVABLES> 10,162
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 57,187
<PP&E> 45,474
<DEPRECIATION> 27,596
<TOTAL-ASSETS> 143,148
<CURRENT-LIABILITIES> 32,345
<BONDS> 1,750
0
0
<COMMON> 335
<OTHER-SE> 107,053
<TOTAL-LIABILITY-AND-EQUITY> 143,148
<SALES> 0
<TOTAL-REVENUES> 23,579
<CGS> 0
<TOTAL-COSTS> 8,547
<OTHER-EXPENSES> 3,632
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,587
<INCOME-TAX> 589
<INCOME-CONTINUING> 998
<DISCONTINUED> (21,691)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,693)
<EPS-PRIMARY> (.61)
<EPS-DILUTED> (.61)
</TABLE>
