SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2000
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 (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
2 Pickwick Plaza, Suite 400
Greenwich, Connecticut 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 629-8888
Not applicable
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Page 1
This document consists of 8 pages.
The exhibit index is contained on page 4 of this document.
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2
Item 5. Other Events.
A copy of the Press Release dated March 1, 2000 is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Pro forma financial information.
Not Applicable.
(c) The following is an exhibit to this Report and is filed herewith:
Exhibit 99.1 Press Release dated March 1, 2000 of NFO
Worlwide, Inc.
Page 2
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3
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, 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: March 1, 2000
Page 3
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4
EXHIBIT INDEX
NFO WORLDWIDE, INC.
Current Report on Form 8-K
Dated March 1, 2000
Exhibit Number Exhibit
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Exhibit 99.1 Press Release dated March 1, 2000 of NFO
Worldwide, Inc.
Page 4
CONTACT: Patrick G. Healy
President - Australasia & Middle East, and CFO
203-618-8502
e-mail: [email protected]
NFO WORLDWIDE, INC. REPORTS
FOURTH QUARTER AND 1999 FULL YEAR RESULTS
Greenwich, CT - March 1, 2000 - NFO Worldwide, Inc. (NYSE: NFO) today reported
its results for the fourth quarter and year ended December 31, 1999. The actual
results for the fourth quarter and full year are within the range of estimates
provided by the Company on December 20, 1999.
Revenues for the fourth quarter increased 27% to $120.2 million from $94.6
million for the same period last year. During the quarter, the Company recorded
$21.7 million in pre-tax special charges, primarily to write-off the intangible
assets associated with the Company's financial services businesses, which have
been deemed to be permanently impaired. These special charges, which are
primarily non-cash in nature, amounted to $17.8 million or ($.80) per diluted
share on an after-tax basis. As a result, the Company reported a net loss of
($17.8) million or ($.80) per diluted share for the fourth quarter, compared
with net income of $5.1 million or $.23 per diluted share in the year ago
quarter. Earnings per diluted share, before special charges, were $0.00 per
share for the fourth quarter of 1999.
For the year ended December 31, 1999, revenues increased 66% to $457.2 million
from $275.4 million in the same period last year. Results for the year ended
December 31, 1999, include the results of Infratest Burke, which was acquired on
November 20, 1998. As a result of the aforementioned special charges, the
Company reported a loss of ($6.2) million or ($.28) per diluted share, compared
with net income of $14.5 million or $.67 per diluted share for the 1998 year.
Earnings per diluted share, before special charges, were $.52 per share for the
full year 1999, as compared with $.67 in 1998.
The fourth quarter's 27% revenue increase was marked by growth in all three of
the Company's business sectors, particularly in Europe where Infratest Burke
marked its first year anniversary with the Company. In total, organic revenue
growth was 8% for the quarter, led by strong double-digit organic growth in
Europe and Australasia & the Middle East. Revenues in the Company's North
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American sector increased by 5% for the fourth quarter, led by strong
double-digit growth within the Company's Healthcare and Panel businesses.
Revenues within the Company's domestic financial services businesses actually
declined during the quarter; excluding financial services revenues, the
Company's organic revenue growth rates for the quarter were 12% within North
America and 12% in total. Currency translation effects, primarily attributable
to a weakened Euro, negatively impacted the quarter's revenues by over 3%.
For the year ended December 31, 1999, North American revenues increased 12%,
with 5% from organic growth and 7% driven by acquisitions. Revenues within
Europe increased dramatically, primarily due to organic growth of 10% and the
first time inclusion of Infratest Burke. Revenue growth in Australasia and the
Middle East was 11%, 7% through organic growth and 4% related to acquisitions.
William E. Lipner, Chairman, President and Chief Executive Officer, stated,
"While we are disappointed with our overall results for the fourth quarter, we
believe we have taken the appropriate strategic and operational steps to allow
certain of our operating companies to achieve better results within a constantly
changing market environment. Of particular importance to me was the fact that
our consolidated organic revenue growth rate accelerated this past quarter, and
reached almost 12% when our financial services businesses are excluded. On this
same pro forma basis, organic revenues within each of our three geographic
business sectors grew by more than 10% during the quarter."
Lipner continued, "NFO's Internet-based custom marketing research revenues
continued their explosive growth during the fourth quarter, increasing by 120%
above their level of the year ago quarter and over 50% on a sequential basis
from the third quarter of 1999. In total, NFO's interactive revenues reached
almost $18 million for the full year, and represented almost 9% of our total
North American activity.
"Client demand for and acceptance of Internet based marketing research is
growing daily, as the benefits of increased speed and respondent access are
substantial. NFO is clearly the unrivaled leader in the interactive space, and
is the world's largest provider of Internet-based custom marketing research
services. Taken together with our global organization, proprietary products and
world class market sector expertise, NFO Interactive is well positioned to
benefit from this burgeoning market."
Lipner concluded, "InsightExpress, our fully-automated, web-enabled survey
system, was officially launched during the fourth quarter. Client acceptance for
this break-through service has been good, and we are very optimistic about its
potential to create an entirely new industry to complement our existing
interactive business."
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On December 20, 1999, NFO announced that it had reached a definitive agreement
to be acquired by The Interpublic Group of Companies, Inc. (NYSE: IPG) in a
stock for stock transaction. The Agreement, which is subject to certain
customary closing conditions, is expected to close in April of 2000. The
Interpublic Group of Companies is one of the largest of advertising and
marketing communications organizations in the world, with more than 35,000
employees and offices in 127 countries. Its principal operating companies
include McCann-Erickson WorldGroup, Lowe Lintas & Partners Worldwide,
DraftWorldwide, Initiative Media Worldwide, International Public Relations,
Zentropy Partners, Octagon, Allied Communications Group, and other related
companies
NFO Worldwide, Inc. is a leading provider of research-based, marketing
information and counsel to the worldwide business community. With over 15,000
full and part-time employees operating in 38 countries; in-depth expertise in
all research methodologies; and in-field marketing experience across multiple
market sectors, NFO provides clients with trusted insight into the behaviors,
attitudes and opinions of customers around the globe. Key services include
comprehensive counsel on market evaluation, product development, brand
management, customer satisfaction, pricing, distribution, and advertising
effectiveness. The Company delivers custom and syndicated marketing information
and counsel to over 3,000 clients in key market sectors such as packaged goods
and foods, healthcare, financial services, high-tech/ telecommunications, travel
& leisure, automotive and business to business. NFO is the largest custom
marketing research firm in North America, and is among the top three in the
world. Together with its subsidiary and affiliated companies, NFO is the world's
largest provider of Internet-based custom marketing research services. Visit NFO
Worldwide on the Web http://www.nfow.com.
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 1998 Annual Report on Form 10-K filed on March 31,
1999.
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NFO WORLDWIDE, INC.
FINANCIAL SUMMARY
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31 Ended December 31
-------------------------- --------------------------
1999 (a) 1998 1999 (a) 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
North America $ 57,480 $ 54,619 $ 208,248 $ 186,390
Europe 54,036 31,014 210,075 50,350
Australasia and the Middle East 11,447 10,385 44,719 40,140
Intersegment Revenues (2,784) (1,399) (5,844) (1,529)
--------- --------- --------- ---------
Total Revenues 120,179 94,619 457,198 275,351
Cost of Revenues 65,847 44,613 239,661 127,006
Selling, General and Administrative 51,322 35,916 169,746 109,023
Depreciation and Amortization 20,209 3,665 34,745 9,994
--------- --------- --------- ---------
Operating (Loss) Income (17,199) 10,425 13,046 29,328
Interest Expense, Net 3,527 1,962 14,084 3,750
Equity Interest in Net (Income) Loss
of Affiliated Companies
and Other Expenses (329) (173) (2,221) 221
--------- --------- --------- ---------
(Loss) Income Before Income Taxes
and Minority Interests (20,397) 8,636 1,183 25,357
Provision for Income Taxes (2,647) 3,604 6,787 10,489
--------- --------- --------- ---------
Net (Loss) Income Before Minority Interests (17,750) 5,032 (5,604) 14,868
Minority Interests 7 (50) 566 378
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Net (Loss) Income $ (17,757) $ 5,082 $ (6,170) $ 14,490
========= ========= ========= =========
Earnings Per Share:
Basic $ (.80) $ .24 $ (.28) $ .68
========= ========= ========= =========
Diluted $ (.80) $ .23 $ (.28) $ .67
========= ========= ========= =========
Average Shares Outstanding:
Basic 22,326 21,353 22,006 21,154
========= ========= ========= =========
Diluted 22,353 21,970 22,369 21,704
========= ========= ========= =========
Selected Financial Data:
12/31/99 12/31/98
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Cash and Cash Equivalents $ 20,062 $ 17,739
Total Debt 175,857 191,053
Stockholders' Equity 124,252 121,763
Total Assets 426,062 451,798
</TABLE>
Note (a): Includes pre-tax special charges of $21.7 million, primarily to
write-off the intangible assets associated with the Company's financial services
businesses, which have been deemed to be permanently impaired. Special charges
after tax aggregated $17.8 million, or ($.80) per share on a diluted basis.
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