UNITED STATES
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): October 30, 1997
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NFO WORLDWIDE, 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 (Commission (IRS Employer
of incorporation) File Number) Identification Number)
2 Pickwick Plaza
Suite 400
Greenwich, Connecticut 06830
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(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 629-8888
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Item 5. Other Events
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A copy of the Press Release dated October 30, 1997 is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
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(c) The following is an exhibit to this Report and is filed herewith:
Exhibit 99.1 Press Release dated October 30, 1997 of
NFO Worldwide, Inc.
2
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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 hereunto duly authorized.
NFO WORLDWIDE, INC.
(Registrant)
By: /S/ PATRICK G. HEALY
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Patrick G. Healy
President - Corporate Product/Systems
Development and Chief Financial Officer
Dated: October 30, 1997
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EXHIBIT INDEX
NFO WORLDWIDE, INC.
Current Report on Form 8-K
Dated October 30, 1997
Exhibit No. Description
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Exhibit 99.1 Press Release dated October 30, 1997 of NFO
Worldwide, Inc.
CONTACT: Patrick G. Healy
Chief Financial Officer
203-618-8502
e-mail: [email protected]
NFO WORLDWIDE REPORTS RECORD THIRD QUARTER REVENUES
AND EARNINGS; EPS, EXCLUDING POOLING COSTS, UP BY 36%
Greenwich, CT -- October 30, 1997 -- NFO Worldwide, Inc.
(NASDAQ:NFOR), previously known as NFO Research, Inc., today reported results
for the third quarter and nine months ended September 30, 1997. Revenues for the
third quarter increased 29% to $49.3 million compared with $38.2 million for the
same period a year ago. Third quarter net income rose by 41% to $4.0 million and
primary earnings per share by 36% to $0.19, excluding a transaction charge of
$840,000, or $0.04 per share, relating to the July 1997 acquisition of The MBL
Group Plc. Including the charge, primary earnings per share were $0.15, 7%
higher than the $0.14 per share earned in the 1996 third quarter.
The MBL Group Plc provides market and marketing research, strategic
planning and research-based consultancy through offices located in 17 countries
throughout Europe, the Middle East and Asia.
Revenues for the nine months ended September 30, 1997 increased 26%
to $138.4 million compared with $109.4 million in the same period last year. Net
income, excluding charges of approximately $1.3 million or $0.06 per share
relating to the acquisition of MBL in July 1997 and Prognostics in April 1997,
increased 26% to $9.6 million from $7.6 million a year ago. Primary earnings per
share of $0.46, excluding the $0.06 charge for the acquisitions, were up 24%
compared with $0.37 per share for the same period last year. Including the $0.06
charge, primary earnings per share were $0.40, an 8% increase over the first
nine months of 1996.
The acquisitions of MBL and Prognostics by NFO were accounted for as
poolings of interests. Accordingly, all historical NFO financial statements have
been restated to include the combined results of NFO with MBL and Prognostics.
The transaction costs associated with these acquisitions have been reflected in
selling, general and administrative expenses.
The third quarter's revenue increase of 29% was driven by
double-digit growth in the Company's packaged goods and foods, financial
services, health care and international business units. These same business
units led the strong revenue growth of 26% experienced for the nine-month period
ended September 30, 1997. The acquisitions of The SPECTREM Group in August 1996
and Access Research in May 1997, as well as the first-time consolidation of the
Company's Middle Eastern operations in the third quarter of 1997, contributed
$3.6 million to the quarter's revenue increase and $6.5 million to the
nine-month increase.
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Operating income for the third quarter, excluding the effect of the
pooling transaction costs, increased 35% to $7.3 million compared with $5.4
million last year. Including this charge, operating income for the quarter rose
by 20% to $6.4 million. Operating income for the nine months ended September 30,
1997, excluding the acquisition charge, rose 20% to $18.2 million, compared with
$15.2 million a year ago. Including this charge, operating income rose 11%
compared with the nine months ended September 30, 1996. Operating income for
both the three and nine-month periods also were impacted by the Company's
continued investments in its interactive panel activities.
The Company said that it has been named one of the "200 Best Small
Companies" in America by Forbes Magazine for the second consecutive year. The
Forbes listing, which is published annually, identifies those public companies
which Forbes ranks on the basis of certain financial criteria, including return
on equity, revenue and earnings growth rates and minimum share price threshold.
Subsequent to the end of the quarter, NFO announced that it had
filed a shelf registration statement to allow for the sale of approximately 1.1
million shares of common stock pursuant to contractual arrangements with selling
shareholders of Prognostics and The MBL Group Plc. The sellers will continue as
major investors in the Company.
William E. Lipner, Chairman and Chief Executive Officer, said, "Our
impressive third quarter revenue performance generated the acceleration in NFO's
earnings growth rate, as we anticipated. Our financial services group,
consisting of PSI, SPECTREM Group, and Access Research, Inc., made a strong
contribution to our overall performance as did the packaged goods sector within
NFO Research, and Migliara/Kaplan, our healthcare company. The MBL Group Plc,
the newest addition to NFO Worldwide, had an outstanding quarter with
significant revenue and profit gains in many of its operating units."
Lipner added, "Our strong nine-month performance, coupled with the
Company's continuing investments in NFO's interactive panel activities, provides
a solid platform on which to build as we look for increasing momentum to
complete 1997 and launch an exciting new year. The strong financial performance
which we continue to demonstrate supports our conviction that we are on the
right path in developing NFO into a marketing information services leader
worldwide."
NFO Worldwide, Inc. is a leading provider of custom and syndicated
marketing 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 US
households (over 1.3 million people) and, through a joint venture, to over
100,000 European households. The Company provides its services to over 2,000
clients in key market segments such as packaged goods and foods, healthcare,
financial services, hi-tech/telecommunications
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and travel & leisure. The Company provides its services in 21 countries and has
over 4,400 full and part-time employees.
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NFO WORLDWIDE, INC.
Financial Summary
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30(1) Ended September 30(1)
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues $ 49,340 $ 38,241 $ 138,385 $ 109,427
Cost of Revenues 21,163 16,339 61,311 46,531
Selling, General and
Administrative Expenses (2) 20,143 15,157 55,772 43,654
Depreciations and Amortization
1,607 1,369 4,385 4,043
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Operating Income 6,427 5,376 16,917 15,199
Interest Expense, Net 274 (37) 346 (10)
Other Expenses (Income) 87 (9) (3) (21)
Equity Interest in Net Loss of
Affiliated Companies 86 32 240 287
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Income Before Income Taxes
and Minority Interest 5,980 5,390 16,334 14,943
Income Tax Expense 2,464 2,339 6,933 6,529
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Net Income Before Minority
Interests 3,516 3,051 9,401 8,414
Minority Interest Expense 315 183 1,127 827
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Net Income (2)
$ 3,201 $ 2,868 $ 8,274 $ 7,587
========= ========= ========= =========
Earnings Per Share (2)(3)
$ .15 $ .14 $ .40 $ .37
========= ========= ========= =========
Weighted Average Shares
Outstanding (3) 20,850 20,774 20,665 20,651
========= ========= ========= =========
</TABLE>
(1) Effective July 11, 1997, the Company acquired The MBL Group Plc and on April
1, 1997 the Company acquired Prognostics. Both acquisitions were accounted
for as pooling of interests transactions. Accordingly, all historical
financial information has been restated to include the combined financial
results of NFO, MBL and Prognostics.
(2) Includes, for the three and nine month periods ending September 30, 1997,
approximately $840,000 or $0.04 per share and $1.3 million or $0.06 per
share, respectively, in pooling transaction costs associated with the
transactions discussed above.
(3) For comparability, the earnings per share and share data reflect the
three-for-two stock splits effected October 15, 1997 and February 5, 1996.
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 on Form 10-K and the "Risk Factors"
section in the Company's Form S-3 filed October 22, 1997.
