UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
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: 0 - 21460
NFO WORLDWIDE, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-1327424
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
TWO PICKWICK PLAZA, GREENWICH, CT. 06830
---------------------------------- -----
(Address of principal executive offices) (Zip Code)
(203) 629 - 8888
----------------------------------------------------
(Registrant's telephone number, including area code)
COMMON STOCK, PAR VALUE $0.1 PER SHARE
--------------------------------------
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
AT MAY 8, 1998 REGISTRANT HAD OUTSTANDING 21,240,503 SHARES OF COMMON STOCK.
<PAGE>
NFO WORLDWIDE, INC.
INDEX
PAGE
Part I FINANCIAL INFORMATION NUMBER
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Condensed Consolidated Statement of Stockholders' Equity 7
Notes to Condensed Consolidated Financial Statements 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11
Part II OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 14
Signature 15
2
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1998 1997
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 7,607 $ 8,055
RECEIVABLES:
TRADE 50,065 47,044
UNBILLED 6,852 8,698
PREPAID EXPENSES AND OTHER CURRENT ASSETS 8,102 7,035
--------- ---------
TOTAL CURRENT ASSETS 72,626 70,832
PROPERTY AND EQUIPMENT, NET 23,959 19,917
CUSTOMER LIST, GOODWILL AND
OTHER INTANGIBLE ASSETS 85,656 74,409
OTHER ASSETS 4,716 5,116
--------- ---------
TOTAL ASSETS $ 186,957 $ 170,274
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
CURRENT MATURITIES OF LONG-TERM DEBT $ 940 $ 346
ACCOUNTS PAYABLE 10,683 9,139
ACCRUED EXPENSES 15,872 18,757
CUSTOMER BILLINGS IN EXCESS OF REVENUES EARNED 16,853 14,126
--------- ---------
TOTAL CURRENT LIABILITIES 44,348 42,368
LONG-TERM DEBT 34,156 24,823
OTHER LONG-TERM LIABILITIES 4,358 4,123
--------- ---------
TOTAL LIABILITIES 82,862 71,314
--------- ---------
MINORITY INTEREST 2,474 2,236
--------- ---------
STOCKHOLDERS' EQUITY:
COMMON STOCK, PAR VALUE $.01 PER SHARE;
60,000 SHARES AUTHORIZED, 20,906 AND
20,730 SHARES ISSUED AND OUTSTANDING
IN 1998 AND 1997, RESPECTIVELY 209 208
ADDITIONAL PAID-IN CAPITAL 54,140 51,766
RETAINED EARNINGS 48,526 46,045
ACCUMULATED OTHER COMPREHENSIVE INCOME (1,254) (1,295)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 101,621 96,724
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 186,957 $ 170,274
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED MARCH 31
1998 1997
---- ----
REVENUES $ 50,243 $ 42,020
COST OF REVENUES 22,281 19,116
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 20,984 16,779
DEPRECIATION EXPENSE 948 628
AMORTIZATION EXPENSE 1,107 750
--------- ---------
OPERATING INCOME 4,923 4,747
INTEREST EXPENSE, NET 427 9
EQUITY INTEREST IN NET LOSS
OF AFFILIATED COMPANIES AND
OTHER EXPENSES 173 67
--------- ---------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 4,323 4,671
PROVISION FOR INCOME TAXES 1,665 1,901
--------- ---------
NET INCOME BEFORE MINORITY INTEREST 2,658 2,770
--------- ---------
MINORITY INTEREST 177 419
--------- ---------
NET INCOME $ 2,481 $ 2,351
========= =========
EARNINGS PER WEIGHTED AVERAGE
SHARE OUTSTANDING(A):
BASIC $ .12 $ .12
========= =========
DILUTED $ .12 $ .11
========= =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (A):
BASIC 20,791 20,075
========= =========
DILUTED 21,514 20,687
========= =========
(A) For comparability, the earnings per share and share data reflect the
three-for-two stock split effected on October 15, 1997.
The accompanying notes are an integral part of these statements.
4
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
--------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME $ 2,481 $ 2,351
ADJUSTMENTS TO RECONCILE TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
MINORITY INTEREST 177 419
DEPRECIATION 948 628
AMORTIZATION 1,107 750
EQUITY INTEREST IN NET LOSS OF AFFILIATED COMPANIES 65 76
-------- --------
SUBTOTAL 4,778 4,224
CHANGE IN ASSETS AND LIABILITIES THAT
PROVIDED (USED) CASH:
TRADE RECEIVABLES (2,154) 1,493
UNBILLED RECEIVABLES 2,036 (424)
PREPAID EXPENSES AND OTHER
CURRENT ASSETS (953) (698)
OTHER ASSETS 338 232
ACCOUNTS PAYABLE, ACCRUED AND
OTHER LIABILITIES 866 (365)
CUSTOMER BILLINGS IN EXCESS OF REVENUES
EARNED 701 (1,853)
-------- --------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 5,612 2,609
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
CAPITAL EXPENDITURES (4,586) (1,159)
ACQUISITIONS (NET OF CASH ACQUIRED) (10,489) (1,080)
OTHER, NET (117) (513)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (15,192) (2,752)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
PAYMENTS ON LONG-TERM DEBT (38,579) (4,162)
NET PROCEEDS FROM ISSUANCE OF STOCK 470 9
BORROWINGS ON LINE OF CREDIT 28,500 4,000
BORROWING ON SENIOR NOTES 20,000 0
DEBT ISSUANCE COSTS (303) 0
-------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 10,088 (153)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (956) (194)
-------- --------
CHANGE IN CASH (448) (490)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 8,055 9,579
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,607 $ 9,089
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
THREE MONTHS
ENDED MARCH 31
--------------
1998 1997
---- ----
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST $ 393 $ 78
INCOME TAXES $ 336 $ 560
The accompanying notes are an integral part of these statements.
6
<PAGE>
NFO WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN RETAINED COMPREHENSIVE
SHARES STOCK CAPITAL EARNINGS INCOME
------ ----- ------- -------- ------
<S> <C> <C> <C> <C> <C>
BALANCE AT
JANUARY 1, 1998 20,730 $ 208 $ 51,766 $ 46,045 $ (1,295)
COMMON STOCK ISSUED
IN CONJUNCTION WITH
ACQUISITIONS 102 1 1,904
OTHER STOCK ISSUANCES 74 --- 470
TRANSLATION ADJUSTMENTS 41
NET INCOME 2,481
------ ------ -------- -------- --------
BALANCE AT
MARCH 31, 1998 20,906 $ 209 $ 54,140 $ 48,526 $ (1,254)
====== ====== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
NFO WORLDWIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Financial Statements:
These condensed consolidated financial statements include the accounts of NFO
Worldwide, Inc., and its subsidiaries (the "Company"). All significant
intercompany amounts have been eliminated. In the opinion of the Company, the
accompanying unaudited condensed consolidated financial statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position of the Company as of March 31, 1998 and
the results of its operations for the three month periods ended March 31, 1998
and March 31, 1997.
These financial statements are presented in accordance with the requirements of
Form 10-Q. Accordingly, the financial statements and related notes in the
Company's Audited Financial Statements for the fiscal year ended December 31,
1997, included in the Company's Form 10-K filed with the SEC on March 30, 1998,
should be read in conjunction with the accompanying condensed consolidated
financial statements. The information included herein may not be indicative of
the results to be expected for a full year.
Note 2. Acquisitions:
On March 4, 1998, the Company acquired MarketMind Technologies ("MarketMind")
and Ross-Cooper-Lund ("RCL"). MarketMind owns and licenses the MarketMind (TM)
system, which uses proprietary software that combines a set of key diagnostic
measures together with the integration, interactive analysis and display of
multiple streams of longitudinal data. RCL is a research-based consulting firm
focused on brand-building strategies.
In separate transactions, the Company acquired substantially all the net assets
of each company for the combined consideration of $16.6 million. Of the total
purchase price, $12.45 million or 75% was paid at closing, while the remaining
25% will be payable based upon each company's achieving certain earnings targets
over the next two years. Approximately 85% of the closing consideration was paid
in cash, and the remainder in newly issued shares of NFO common stock.
Both acquisitions have been accounted for as purchases and the accompanying
financial statements include the results of operations from the effective date
of acquisition. The purchase price allocations are based on preliminary
estimates of fair market value and are subject to revision. The pro forma
effects of these acquisitions are not material to the consolidated results of
operations for the Company in 1998 and 1997.
On April 1, 1997, the Company issued approximately 2,590,000 shares (adjusted
for the 3 for 2 stock split effective October 15, 1997) of NFO common stock to
acquire 100% of the stock of Prognostics. On July 11, 1997, the Company issued
approximately 2,046,000 shares (adjusted for the 3 for 2 stock split) of NFO
common stock to acquire 100% of the outstanding stock of The MBL Group, Plc. The
acquisitions of Prognostics and the MBL Group Plc have been accounted for as
poolings of interests. The condensed consolidated financial statements give
retroactive effect to the mergers and all financial statements are presented as
if NFO, Prognostics and The MBL Group Plc had been combined for all periods
presented.
8
<PAGE>
Separate results of operations for the periods prior to the merger with MBL and
Prognostics are as follows:
(UNAUDITED), IN THOUSANDS
-------------------------
FIRST THREE MONTHS
1997
------------------
REVENUES
NFO $ 30,123
MBL 10,051
PROGNOSTICS 1,846
--------
COMBINED $ 42,020
========
NET INCOME
NFO $ 1,950
MBL 271
PROGNOSTICS 130
--------
COMBINED $ 2,351
========
Note 3. Comprehensive Income:
During the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130).
Comprehensive Income is the total of Net Income and all other nonowner changes
in equity ("Other Comprehensive Income"). Comprehensive Income includes all
changes in equity during a period except those resulting from investments by
owners and distributions to owners. The adoption of SFAS 130 will not impact
results from operations, financial condition, or long-term liquidity, but will
require the Company to classify items of Other Comprehensive Income by their
nature in the financial statements and display the accumulated balance of Other
Comprehensive Income separately in the stockholder's equity section of the
Company's consolidated balance sheet.
The Company's total Comprehensive Income for the quarters ended March 31, 1998
and 1997 was approximately $2.5 million and approximately $2.1 million,
respectively. The Company's total Comprehensive Income includes net income and
Other Comprehensive Income. The Company's components of Other Comprehensive
Income are currency translation adjustments and minimum pension liability
adjustments.
9
<PAGE>
Note 4. Earnings Per Share:
Earnings per share have been restated to give effect to the Company's
three-for-two stock split effected on October 15, 1997. The following table
reconciles the net income and weighted average number of shares included in the
basic earnings per share calculation to the net income and weighted average
number of shares used to compute diluted earnings per share (in thousands of
dollars, except per share data):
THREE MONTHS
ENDED MARCH 31
--------------
1998 1997
---- ----
Net Income Used for Basic and Diluted
Earnings Per Share $ 2,481 $ 2,351
========= =========
Weighted Average Number of Shares
Outstanding Used for Basic
Earnings Per Share (thousands) 20,791 20,075
Dilutive Stock Options 576 420
Contingently Issuable Common Shares 147 192
--------- ---------
Weighted Average Number of Shares
Outstanding and Common Share
Equivalents Used for Diluted Earnings
Per Share (thousands) 21,514 20,687
========= =========
Note 5. Credit Facilities:
On March 9, 1998, the Company successfully concluded a private placement of $40
million fixed rate Senior Notes and entered into a $75 million revolving credit
agreement. Borrowings under these combined $115 million credit facilities are
unsecured, the proceeds of which were used to refinance the Company's previous
debt of approximately $32 million and to finance future acquisitions, capital
expenditures, and working capital. The $75 million revolving credit facility,
with an ultimate maturity date of March 2003, replaced the Company's bank line
of $35 million and will enable the Company to borrow in multiple currencies at
interest rates tied to LIBOR or the prime rate, at the Company's option. The $40
million in Senior Notes are due March 1, 2008, bear interest at the fixed rate
of 6.43 percent and are to be repaid in equal annual installments of
approximately $5.7 million starting in the year 2002.
Note 6. Subsequent Event:
On April 3, 1998, the Company completed the acquisition of CF Group, Inc. ("CF
Group"). Founded in 1932, CF Group is the largest market research organization
in Canada. CF Group is headquartered in Toronto and has client service offices
in Montreal, Ottawa and Vancouver. The Company acquired 100 percent of the
outstanding stock of CF Group for a total purchase price of approximately
Canadian $20 million, 70 percent payable at closing with 75 percent in cash and
25 percent in newly issued shares of NFO common stock. The remaining 30 percent
of the purchase price will be payable over the next 2 years, based on CF Group
achieving certain earnings targets. The purchase will be accounted for using the
purchase method of accounting.
10
<PAGE>
NFO WORLDWIDE, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
this Quarterly Report.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain operating
statement data for the Company, expressed as a percentage of revenues, and the
percentage change in such items compared to amounts for the prior year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
---------------------------
PERCENTAGE OF
REVENUES PERCENTAGE
----------------- CHANGE FROM
1998 1997 PRIOR YEAR
---- ---- ----------
<S> <C> <C> <C>
REVENUES 100.0% 100.0% 19.6%
COST OF REVENUES 44.3 45.5 16.6
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 41.8 39.9 25.1
DEPRECIATION EXPENSE 1.9 1.5 51.0
AMORTIZATION EXPENSE 2.2 1.8 47.6
----- ----- ----
OPERATING INCOME 9.8 11.3 3.7
INTEREST EXPENSE, NET 0.9 0.0 NM
EQUITY INTEREST IN NET LOSS
OF AFFILIATED COMPANIES AND
OTHER EXPENSES 0.3 0.2 158.2
----- ----- ----
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 8.6 11.1 (7.5)
PROVISION FOR INCOME TAXES 3.3 4.5 (12.4)
----- ----- ----
NET INCOME BEFORE MINORITY
INTEREST 5.3 6.6 (4.0)
MINORITY INTEREST 0.4 1.0 (57.8)
----- ----- ----
NET INCOME 4.9% 5.6% 5.5%
===== ===== ====
</TABLE>
11
<PAGE>
NFO WORLDWIDE, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OPERATIONS
The Company's revenues for the three months ended March 31, 1998 increased 20%
to $50.2 million from $42.0 million for the same period last year. Strong
performance in the Company's international, hi-tech and financial services units
contributed to the revenue growth. The inclusion of newly acquired companies
(Access Research acquired in May 1997, CM Research acquired in December 1997,
and RCL and MarketMind acquired in March 1998), as well as newly consolidated
companies (MBL Group's Middle Eastern and Indian operations), contributed $6.5
million to the increase in revenues. The growth in overall revenues occurred
despite the negative effects of currency exchange translations, which reduced
reported revenues by $1.5 million or almost 4%. Consolidated revenues, at
constant exchange rates, grew by 23% over the prior year.
Cost of revenues increased 17% to $22.3 million from $19.1 million a year ago
primarily due to the inclusion of the Company's newly acquired and newly
consolidated companies ($2.8 million), increased business volume, and
inflationary increases. Foreign exchange rates reduced cost of revenues by $.4
million in comparison to the same period last year.
Selling, general and administrative expenses increased 25% in the first quarter
to $21.0 million from $16.8 million in the same period last year. The major
factors for the increase were: the inclusion of the Company's newly acquired and
newly consolidated companies ($3.6 million), increased costs due to increased
business activity, especially in the Company's financial services and hi-tech
business units ($.7 million), increased lease expenses due to the Company's
expansion of its operating facilities, and inflationary increases. Offsetting
these increases were the effects of foreign exchange rates, which caused
selling, general and administrative expenses to be reduced by $.7 million.
As a result of the items above, operating income for the quarter ended March 31,
1998 increased 4% to $4.9 million from $4.7 million. Currency translations
negatively impacted reported operating income results by over $.5 million, or
11%. Excluding the effects of the currency translations, operating income
increased 15% over the prior year.
The Company's effective tax rate for the quarter ended March 31, 1998 was 38.5%
compared to 40.7% for the same period last year. The decrease in the quarter's
effective tax rate was primarily the result of lower rates in the Company's
international business units.
Net Income for the first quarter of 1998 increased 6% to $2.5 million compared
to $2.4 million last year, while diluted EPS rose by 9% to $.12 from $.11 a year
ago. Excluding the negative impact of the currency fluctuations of $.4 million
or $.02 per share, net income rose 22% over the same period last year while
diluted EPS increased by 27%.
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of March 31, 1998 was $28.3 million compared to $28.5 million
at December 31, 1997. The slight decrease in working capital resulted primarily
from the cash portion of the purchase prices relating to the Company's
acquisitions net of borrowings ($.5 million), the reclassification of the
Company's Industrial Revenue Bond to short term ($.6 million), debt issuance
costs relating to the Company's new credit facilities ($.3 million), and capital
expenditures ($4.6 million). Offsetting these decreases in working capital were
the results of operations and an increase in accrued liabilities.
As of March 31, 1998, the Company had $13.5 million outstanding on its $75.0
million credit facility, and $20 million outstanding in Senior Notes payable.
12
<PAGE>
Capital expenditures for the quarter ended March 31, 1998 were $4.6 million
compared to $1.2 million for the same period last year. The Company spent $3.2
million during the first quarter of 1998 on the planned expansion of certain of
its operating facilities. Capital expenditures for 1998 are anticipated to be
approximately $16 million, including approximately $11 million for the Company's
planned operations expansion.
The Company anticipates that existing cash, together with internally generated
funds and its credit and stock availabilities will provide the Company with
resources that are needed to satisfy potential acquisitions, capital
expenditures and the Company's growing working capital requirements. The timing
and magnitude of future acquisitions will be the single most important factor in
determining the Company's long term capital needs.
FUTURE REQUIRED ACCOUNTING CHANGES
On April 3, 1998, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position 98-5, "Reporting on the Costs of Start-up
Activities" (SOP 98-5). This Statement of Position (SOP) provides guidance on
the financial reporting of start-up costs and organization costs. It requires
costs of start-up activities and organization costs to be expensed as incurred.
This SOP is effective for financial statements for fiscal years beginning after
December 15, 1998. Initial application of this SOP will be reported as the
cumulative effect of a change in accounting principle. The adoption of this SOP
will have no effect on the Company's cash flow, financial condition, or
long-term liquidity, but will impact reported results from operations due to the
timing of expense recognition for costs covered by this SOP. The Company is
currently quantifying the effect on the consolidated financial statements, but
anticipates that the adoption of this SOP on January 1, 1999 will result in an
immaterial effect on its consolidated financial statements.
OTHER MATTERS
The Company is currently working to resolve the year 2000 issue, which results
from the fact that many existing computer programs were designed for optimal
computer performance on slower computers during the 1980's, and they did not
account for the impact of the upcoming new millenium. In early 1997 the Company
completed an impact analysis across all proprietary custom software programs and
systems, and has since been reviewing the results for any necessary year 2000
changes. As potential problems are identified, affected programs are being
modified by the Company's programming department to ensure future compliance.
The Company is also coordinating with clients, vendors, affiliates and other
outside parties who may affect, or be affected by, the Company's plans to
address the year 2000 issue. Any new programs being developed are being made
year 2000 compliant from the outset, while certain existing systems are being
made year 2000 compliant as they are reengineered. The Company is targeting
January 1, 1999 to complete all mission critical systems, including third party
and supply chain vendors, and June 30, 1999 for all other systems, for year 2000
compliancy.
13
<PAGE>
PART II OTHER INFORMATION
- -------------------------
ITEM 6 Exhibits and Reports on Form 8-K.
- -----------------------------------------
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K with the Commission on
March 9, 1998 to report supplemental 1997 Form 10-K financial
information related to two financing agreements.
The Company filed a report on Form 8-K with the Commission on
May 12, 1998 reporting the Company's first quarter earnings
press release issued on that date.
14
<PAGE>
NFO WORLDWIDE, INC.
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.
NFO WORLDWIDE, INC.
(Registrant)
Dated: May 14, 1998 /s/ Patrick G. Healy
--------------------
Patrick G. Healy,
President - Corporate Products/Systems
Development and Chief Financial Officer
(Authorized Officer of
Registrant and
Principal Financial Officer)
15
<PAGE>
NFO WORLDWIDE, INC.
INDEX TO EXHIBITS
SEQUENTIAL
PAGE
EXHIBITS NUMBER
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in NFO Worldwide, Inc.'s report on Form 10-Q for
the quarter ended March 31, 1998, 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> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,607
<SECURITIES> 0
<RECEIVABLES> 57,478
<ALLOWANCES> 561
<INVENTORY> 0
<CURRENT-ASSETS> 72,626
<PP&E> 42,522
<DEPRECIATION> 18,563
<TOTAL-ASSETS> 186,957
<CURRENT-LIABILITIES> 44,348
<BONDS> 34,156
<COMMON> 209
0
0
<OTHER-SE> 101,412
<TOTAL-LIABILITY-AND-EQUITY> 186,957
<SALES> 50,243
<TOTAL-REVENUES> 50,243
<CGS> 22,281
<TOTAL-COSTS> 45,320
<OTHER-EXPENSES> 148
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 452
<INCOME-PRETAX> 4,323
<INCOME-TAX> 1,665
<INCOME-CONTINUING> 2,481
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,481
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
<FN>
*Information has been prepared in accordance with SFAS No. 128, basic and
diluted EPS have been provided in place of primary and fully diluted,
respectively.
</FN>
</TABLE>
