SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 1, 1997
NFO RESEARCH, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21460 06-1327424
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification Number)
2 Pickwick Plaza
Greenwich, CT 06830
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Registrant's telephone number, including area code: (203) 629-8888
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<PAGE>
Item 5. Other Events
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On April 1, 1997 NFO Research, Inc. (the "Company" or "NFO") issued 1,726,480
shares of NFO common stock in conjunction with the acquisition of 100% of the
stock of Prognostics, a leading provider of survey-based quantitative customer
satisfaction research to information technology companies worldwide. This
transaction has been accounted for as a pooling of interests. In Item 7 attached
herein the Company has restated its income statements for the years ended
December 31, 1993 through December 31, 1996 and for the three months ended March
31, 1997 showing the combined results of both NFO and Prognostics. In addition,
included are the restated income statements for each of the quarters in 1996.
All other financial statements for prior periods will be retroactively restated
in future filings.
For a complete description of the transaction, please refer to the Merger
Agreement attached to the Annual Report on Form 10-K for the year ended December
31, 1996 filed on March 31, 1997 by the Company.
<PAGE>
Item 7. Financial Statements and Exhibits
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RESTATED ANNUAL INCOME STATEMENTS FOR THE COMBINED OPERATIONS OF
NFO RESEARCH, INC. AND PROGNOSTICS
<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31:
--------------------------------------------------
1993 1994 1995 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES $ 54,994 $ 65,403 $ 78,171 $ 116,901
COST OF REVENUES 23,343 28,662 34,868 51,853
SELLING, GENERAL AND ADMINISTRATIVE 20,309 23,720 28,034 42,775
DEPRECIATION EXPENSE 1,017 1,058 1,271 1,755
AMORTIZATION OF INTANGIBLE ASSETS 2,319 2,031 2,157 2,891
--------- --------- --------- ---------
OPERATING INCOME 8,006 9,932 11,841 17,627
INTEREST EXPENSE, NET 699 45 (12) 170
OTHER EXPENSES (INCOME) 60 258 0 (111)
EQUITY INTEREST IN NET LOSS
OF JOINT VENTURE 0 0 0 453
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 7,247 9,629 11,853 17,115
INCOME TAX EXPENSE 3,322 3,664 5,072 7,645
--------- --------- --------- ---------
NET INCOME $ 3,925 $ 5,965 $ 6,781 $ 9,470
========= ========= ========= =========
EARNINGS PER SHARE $ 0.39 $ 0.5 $ 0.59 $ 0.75
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING 10,071 11,209 11,422 12,544
========= ========= ========= =========
</TABLE>
<PAGE>
RESTATED QUARTERLY INCOME STATEMENTS FOR THE COMBINED OPERATIONS OF
NFO RESEARCH, INC. AND PROGNOSTICS
<TABLE>
<CAPTION>
FOR THE QUARTERS ENDED:
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1996 1997
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MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31
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<S> <C> <C> <C> <C> <C>
REVENUES $ 25,599 $ 27,827 $ 29,223 $ 34,252 $ 31,969
COST OF REVENUES 11,598 11,974 12,587 15,694 15,258
SELLING, GENERAL AND
ADMINISTRATIVE 9,515 9,837 10,528 12,895 11,843
DEPRECIATION EXPENSE 411 415 450 479 467
AMORTIZATION OF INTANGIBLE
ASSETS 775 775 766 575 742
-------- -------- -------- -------- --------
OPERATING INCOME 3,300 4,826 4,892 4,609 3,659
INTEREST EXPENSE, NET 33 43 (4) 98 16
OTHER EXPENSES (INCOME) (8) (4) (9) (90) (9)
EQUITY INTEREST IN NET LOSS
OF JOINT VENTURE 130 140 75 108 78
-------- -------- -------- -------- --------
INCOME BEFORE INCOME TAXES 3,145 4,647 4,830 4,493 3,574
INCOME TAX EXPENSE 1,456 2,131 2,147 1,911 1,494
-------- -------- -------- -------- --------
NET INCOME 1,689 2,516 2,683 2,582 2,080
======== ======== ======== ======== ========
EARNINGS PER SHARE $ 0.14 $ 0.20 $ 0.21 $ 0.20 $ 0.17
======== ======== ======== ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 12,329 12,439 12,485 12,613 12,323
======== ======== ======== ======== ========
</TABLE>
<PAGE>
SIGNATURES
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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.
Date: June 11, 1997 NFO RESEARCH, INC.,
By: /s/ Patrick G. Healy
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Name: Patrick G. Healy
Title: EVP-Finance and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
NFO RESEARCH, INC.
Current Report on Form 8-K
Dated
Exhibit No. Description Page No.
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1. News Release, dated 7
April 1, 1997, by the
Registrant.
EXHIBIT 1
NEWS RELEASE
CONTACT: Patrick G. Healy
Executive Vice President -
Finance and CFO
203-629-4627
e-mail: [email protected]
NFO RESEARCH, INC. TO SERVE RAPIDLY EXPANDING
INFORMATION TECHNOLOGY MARKETS;
ACQUIRES PROGNOSTICS, A LEADING PROVIDER OF RESEARCH
SERVICES TO OVER 200 INFORMATION TECHNOLOGY COMPANIES
Greenwich, Connecticut -- April 1, 1997 -- NFO Research, Inc. (NASADAQ.NFOR)
today announced that it has established a strong capability to serve the
research needs of information technology companies through the acquisition of
100% of the outstanding stock of Prognostics, a leading provider of survey-based
quantitative customer satisfaction research to information technology companies
worldwide. Prognostics' clients include Sun Microsystems, Oracle, Digital, IBM,
Hewlett-Packard, Cisco, Novell and Silicon Graphics.
The transaction was effected through the issuance of 1.726 million newly issued
shares of NFO common stock and will be accounted for as a pooling of interests.
Prognostics has experienced rapid growth, with revenues for calendar year 1997
expected to reach approximately $11 million, almost three times the revenues
seen in 1994. The acquisition, excluding transaction costs, is expected to have
a slightly positive effect on NFO's 1997 earnings per share.
William E. Lipner, Chairman and Chief Executive Officer of NFO, said, "This
acquisition represents a significant advance of our strategy for growth in the
rapidly expanding worldwide information technology (IT) market. We are
absolutely thrilled that Prognostics' management has chosen to join the NFO
team. Prognostics is the leading provider of customer satisfaction measurement
for the IT industry. In addition to expanding their franchise in that sector, we
will utilize Prognostics' methodology the enhance our product offerings in
support of our business relationships in the financial services and
telecommunications industries. We also believe that Prognostics' strong client
relationships will provide fertile ground for the marketing of NFO//net.source,
NFO's new interactive market research offering; its underlying electronic
technology is the state of the art in fast turnaround, cost-effective survey
tools. In addition, NFO//net.source gives Prognostics' clients access to the
world's largest interactive consumer panel of over 70,000 participating U.S.
households and a growing number of businesses."
J. B. Wood, Prognostics' President and Chief Executive Officer, said, "We
believe that the combination of Prognostics and NFO will represent substantial
added value for our existing and future clients. The combination of our two
companies will provide expanded research and electronic survey capabilities
which will enable us to enhance the quality and turnaround time of our services
worldwide. We also will leverage NFO's extensive panel and consumer experience
to bring new survey offerings to our IT clients."
<PAGE>
Wood added, "Prognostics has achieved considerable growth over the past several
years. Our partnership with NFO will enable us to continue and even accelerate
our expansion plans as we help companies increase their competitiveness by
listening to the voice of their customers. The IT industry as a whole is just
beginning to appreciate the power and value that good marketing information can
provide. Our association with NFO will enable us to help take advantage of this
burgeoning opportunity on a global basis."
Founded in 1981, Prognostics' survey results are utilized by senior level
executives at over 200 of the largest information technology companies in the
world. The company is headquartered in Palo Alto, California and has additional
offices in Boston and London, as well as an affiliate relationship in Japan.
Additional information regarding Prognostics may be found at its website,
http//www.prognostics.com.
NFO Research, Inc. is a leading provider of custom and syndicated market
information to America's largest companies as well as the international business
community. Through its pre-recruited consumer panel and other specialized
databases, NFO offers access to more than 525,000 households and over 1.3
million people. The Company provides its serves to over 1,100 clients, including
44 of the largest 100 companies of the Fortune 500 list, 23 of the top 25 U. S.
bank holding companies, and 18 of the nation's 20 largest pharmaceutical firms.
Statements in this press release relating to matters that are not historical
facts are forward-looking statements. Such forward-looking statements are based
on the Company's current forecasts and actual results may differ materially. To
understand the risks which may affect the Company's future performance, please
refer to Part 1 of NFO's 1996 Annual Report of Form 10-K.
