United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Period Ended June 30, 1996
Commission file number 0-22554
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OPINION RESEARCH CORPORATION
- - --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-3118960
- - ------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
23 Orchard Road
Skillman, NJ 08558
- - ------------------------ ------------------------------------
(Address of principal (Zip Code)
executive offices)
908-281-5100
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(Registrant's telephone number, including are code)
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 periods that
the registrant was required to file such reports): Yes X No
and; (2) has been subject to such filing requirements ------ ------
for the past 90 days: Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Stock, $0.01 Par Value - 4,186,072 shares as of July 31, 1996
<PAGE>
<PAGE>
INDEX
Opinion Research Corporation and Subsidiaries
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets - June 30, 1996 and December 31, 1995
Condensed consolidated statements of income - Three months ended
June 30, 1996 and 1995; Six months ended June 30, 1996 and 1995
Condensed consolidated statements of cash flows - Six months
ended June 30, 1996 and 1995
Notes to consolidated financial statements - June 30, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
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<PAGE>
<TABLE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share amounts)
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<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 342 $ 340
Accounts receivable:
Billed 7,513 7,878
Unbilled services 5,316 3,696
------- -------
12,829 11,574
Less: allowance for doubtful accounts 171 129
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12,658 11,445
Prepaid and other current assets 2,244 1,495
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Total current assets 15,244 13,280
Property and equipment, net 5,286 4,885
Capitalized production costs, net 220 300
Intangibles, net 1,130 1,343
Goodwill, net 9,125 8,194
Other assets 581 535
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Total assets $31,586 $28,537
======= =======
<PAGE>
<PAGE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $ 1,293 $ 1,392
Accrued expenses 2,247 1,828
Deferred revenues 2,220 1,078
Notes payable 3,526 2,776
Current maturities of obligations under
capital leases 225 250
Other current liabilities 155 126
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Total current liabilities 9,666 7,450
Long term debt $ 3,536 $ 3,857
Deferred interest payable 998 804
Long term maturities of obligations under
capital leases 397 489
Deferred income taxes 403 355
Other liabilities 851 837
Stockholder's Equity:
Preferred Stock, $.01 par value, 1,000,000
shares authorized, none issued or
outstanding
Common stock, $.01 par value, 10,000,000
shares authorized, 4,231,747 shares
issued and 4,186,072 outstanding in 1996 42 42
and 4,231,747 issued and 4,197,122
outstanding in 1995
Additional paid-in capital 14,010 14,067
Retained earnings 1,822 718
Foreign currency translation adjustment 143 125
Treasury stock, at cost, 45,675 shares in
1996, and 34,625 in 1995 (282) (207)
------- -------
Total stockholders' equity 15,735 14,745
------- -------
Total liabilities and stockholders' equity $31,586 $28,537
======= =======
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See notes to financial statements
/TABLE
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<TABLE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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<CAPTION>
Six Months Ended June 30,
1996 1995
------------ ------------
<S> <C> <C>
Cash provided by (used in) operating
activities: $ 1,722 $ (152)
Cash flows from investing activities:
Payments for acquisitions (752) (891)
Proceeds from the sale of fixed assets 12
Capital expenditures (899) (682)
------- -------
Net cash used in investing activities (1,639) (1,573)
Cash flows from financing activities:
Issuance of note payable 1,410
Repayment of note payable (1,031) (51)
Borrowings under line-of-credit facilities 7,606 4,164
Repayment under line-of-credit facilities (6,147) (4,485)
Proceeds from equipment financing 500
Capital stock repurchased (373)
Repayments under capitalized lease obligations (136) (137)
------- -------
Net cash provided by (used in) financing
activities 81 1,401
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Increase (decrease) in cash and cash equivalents 2 (324)
Cash and cash equivalents at beginning of period 340 1,227
------- -------
Cash and cash equivalents at end of period $ 342 $ 903
======= =======
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See notes to financial statements
/TABLE
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<TABLE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except share and per share amounts)
(Unaudited)
- - --------------------------------------------------------------------------
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $11,704 $10,198 $23,261 $22,031
Cost of revenues 6,866 6,578 13,799 13,726
------- ------- ------- -------
Gross Profit 4,838 3,620 9,462 8,305
Selling, general and
administrative expenses 3,008 3,161 6,025 6,159
Depreciation and amortization 547 665 1,085 1,603
Unusual items 3,489 3,489
------- ------- ------- -------
Operating Income (Loss) 1,283 (3,695) 2,352 (2,946)
Interest expense, net 207 199 343 383
------- ------- ------- -------
Income (loss) before
provision (benefit) for
income taxes 1,076 (3,894) 2,009 (3,329)
Provision (benefit) for
income taxes 490 (941) 904 665
------- ------- ------- -------
Net Income (Loss) $ 586 $ 2,953 $ 1,105 $(2,664)
======= ======= ======= =======
Net income (loss) per
common share:
Primary $ 0.14 $ (0.69) $ 0.26 $ (0.63)
======= ======= ======= =======
Fully diluted $ 0.13 $ 0.25
======= =======
Weighted average common
shares outstanding:
Primary 4,247,547 4,249,064 4,288,379 4,243,910
Fully diluted 4,936,455 4,925,057
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See notes to financial statements
/TABLE
<PAGE>
<PAGE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1996
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three- and six-month
periods ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ended December
31, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Registrant Company and Subsidiaries' Annual Report on Form 10-K
for the year ended December 31, 1995.
NOTE B - EARNINGS PER SHARE
Primary earnings per share is determined by dividing net income
or loss by the weighted average common shares and stock options
and warrants outstanding. Fully diluted earnings per share also
take into account the conversion of convertible debentures
outstanding adjusted for related interest expense. Common stock
equivalents and shares attributable to the conversion of
convertible debentures are not included in 1995 as their effect
is anti-dilutive.
NOTE C - ACQUISITION OF STRATEGIC RESEARCH AND CONSULTING, INC.
Based on 1995 operating performance, an additional $666,621 was
paid to the principals of Strategic Research and Consulting, Inc.
during the second quarter of 1996. This payment consisted of a
cash payment of $425,690 and the issuance of stock valued at
$240,931. This payment has been recorded as goodwill and will be
amortized over the 23 years remaining on the original goodwill.
NOTE D - CREDIT FACILITY
The Company has a credit facility with a U.S. Bank totaling
$10,000,000. The facility allows for $4,000,000 of acquisition
financing, $1,000,000 for equipment financing, and $5,000,000 for
working capital. All borrowings are subject to the master credit
facility which has been extended through June 30, 1997.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations - Second Quarter 1996 as Compared to Second
Quarter 1995
Revenues for the second quarter of 1996 increased $1,506,000, or
15%, from $10,198,000 in the second quarter of 1995 to
$11,704,000 in the second quarter of 1996. The increase in
second quarter revenues can be attributed to an improvement in
general business conditions and management's redeployment of the
work force to higher growth businesses in the second quarter of
1995. An increase in revenues was recorded for both domestic and
international operations.
Gross profit for the three months ended June 30, 1996 increased
by $1,218,000 from $3,620,000 to $4,838,000 or 34%. As a percent
of revenues, gross profit increased from 36% in 1995 to 41% in
1996. This increase in gross profit is attributable to increased
efficiencies associated with repetitive revenue streams as well
as management's decision in the second quarter of 1995 to abandon
the lower margin lines of business while restructuring and
consolidating the Company's operations.
Selling, general and administrative expenses decreased from
$3,161,000 to $3,008,000 for the three months ended June 30,
1996, relative to the same period in 1995. As a percent of
revenues, SG&A has decreased from 31% for the three months ended
June 30, 1995 to 25% for the comparable period in 1996. This
decrease is due to management's efforts to control costs while
increasing revenues. SG&A is expected to remain fairly constant
in the immediate future.
Depreciation and amortization expense decreased from $665,000 in
the second quarter of 1995 to $547,000 in the second quarter of
1996. This decrease in expense is attributable to the write-down
of: capitalized production costs, obsolete fixed assets, and
intangible assets associated with the unusual charge taken in the
second quarter of 1995.
For the three months ended June 30, 1995, the Company took a one-time
pre-tax charge of $3,489,000 ($2,093,000 after-tax charge)
for items associated with the restructuring and consolidation of
operations. This amount included non-cash charges of $2,596,000
for write-downs of the following: capitalized production costs of
$1,958,000, obsolete fixed assets of $178,000, and other
intangibles of $460,000. Also included in the charge is a
provision for the abandonment of leases of $414,000, severance of
$380,000, and other miscellaneous charges of $99,000. No such
unusual charge was recorded for 1996.
<PAGE>
<PAGE>
Results of Operations - Six Months Year-to-Date 1996 as Compared
to Six Months Year-to-Date 1995.
Revenues for the first six months of 1996 increased $1,230,000,
or 6%, as compared to the first six months of 1995. The six
month increase in revenues can be attributed to an improvement in
general business conditions and management's redeployment of the
work force to higher growth businesses in the second quarter of
1995. This six month increase reflects domestic growth and a
slight downturn in international operations which occurred in the
first quarter of 1996.
Gross profit for the six months ended June 30, 1996 increased by
$1,157,000 from $8,305,000 to $9,462,000 or 14%. As a percent of
revenues, gross profit increased from 38% in 1995 to 41% in 1996.
This increase in gross profit is attributable to increased
efficiencies associated with repetitive revenue streams as well
as management's decision in the second quarter of 1995 to abandon
the lower margin lines of business while restructuring and
consolidating the company's operations.
Selling, general and administrative expenses decreased from
$6,159,000 to $6,025,000 for the six months ended June 30, 1996,
relative to the same period in 1995. As a percent of revenues,
SG&A has decreased from 28% for the six months ended June 30,
1995 to 26% for the comparable period in 1996. This decrease is
primarily due to the management's efforts to control costs while
increasing revenues. SG&A is expected to remain fairly constant
in the immediate future.
Depreciation and amortization expense decreased from $1,603,000 to
$1,085,000 for the six months ended June 30, 1996, relative to
the same period in 1995. This decrease in expense is
attributable to the write-down of: capitalized production costs,
obsolete fixed assets, and intangible assets associated with the
unusual charge taken in the second quarter of 1995.
For the six months ended June 30, 1995, the Company took a one-time
pre-tax charge of $3,489,000 ($2,093,000 after-tax charge)
for items associated with the restructuring and consolidation of
operations. This amount included non-cash charges of $2,596,000
for the write-downs of the following: capitalized production
costs of $1,958,000, obsolete fixed assets of $178,000, and other
intangibles of $460,000. Also included in the charge is a
provision for the abandonment of leases of $414,000, severance of
$380,000, and other miscellaneous charges of $99,000. No such
unusual charge was recorded for 1996.
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash flows provided by operating activities for the first six
months of 1996 were $1,722,000.
Based on 1995 operating performance, an additional $666,621 was
paid to the principals of Strategic Research and Consulting, Inc.
during the second quarter of 1996. This payment consisted of a
cash payment of $425,690 and the issuance of stock valued at
$240,931. This payment has been recorded as goodwill and will be
amortized over the 23 years remaining on the original goodwill.
Significant financing and investing activities for the first six
months of 1996 included capital expenditures of $899,000, net
borrowings of $1,459,000 under a Line of Credit agreement, a net
decrease of $1,031,000 in notes payable, stock repurchases of
$373,000 and the issuance of treasury shares valued at $489,500.
The Company has a credit facility with a U.S. Bank totaling
$10,000,000. The facility allows for $4,000,000 of acquisition
financing, $1,000,000 for equipment financing, and $5,000,000 for
working capital. All borrowings are subject to the master credit
facility which has been extended through June 30, 1997. The
Company believes that its current sources of liquidity and capital
resources will be sufficient to fund its long-term obligations and
working capital needs for the foreseeable future.
<PAGE>
<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of ORC was held on
June 18, 1996 at the Company's headquarters for the
following purposes:
1. To elect three directors to serve until the 1999
Annual Meeting of Stockholders of the Company and
until their respective successors shall have been duly
elected and qualified.
-- Michael R. Cooper
-- John F. Short
-- Stephen A. Greyger
2. To approve an amendment to the Opinion Research
Corporation 1993 stock incentive plan.
3. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the 1996 fiscal year.
All questions were approved by the stockholders with a
majority in excess of 95% of votes cast.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) (11) Statement regarding computation of per share
earnings
(27) Financial data schedule (EDGAR version only)
b) Reports on Form 8-K
None
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<TABLE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Exhibit (11)-Statement Re: Computation of Earnings per Share
- - --------------------------------------------------------------------------
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------- --------- --------- ---------
(000's omitted, except per share data)
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 4,170 4,232 4,159 4,232
Net effect of dilutive stock
options based on the
treasury stock method 78 17 69 11
----- ------- ----- -----
Totals 4,248 4,249 4,228 4,243
Net income (loss) $ 586 $(2,953) $1,105 $(2,664)
Per share amount $0.14 $ (0.69) $ 0.26 $ 0.63
===== ======= ====== =======
Fully diluted: (1)
Average shares outstanding 4,170 4,159
Net effect of dilutive stock
options based on the
treasury stock method 112 112
Assumed conversion of
convertible debentures 654 654
----- -----
Totals 4,936 4,925
Net income $ 586 $1,105
Add debenture interest, net
of tax effect 52 107
Totals 638 1,212
Per share amount $0.13 $ 0.25
===== ======
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<FN>
<F1>
Common stock equivalents and shares attributable to the conversion
of convertible debentures are not included in 1995 as their effect
is anti-dilutive.
</FN>
</TABLE>
See notes to financial statements<PAGE>
<PAGE>
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.
Opinion Research Corporation
--------------------------------------
(Registrant)
Date August 2, 1996 JOHN F. SHORT
--------------------- --------------------------------------
John F. Short, Vice Chairman & CFO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Company's consolidated balance sheet as of June 30, 1996
and the related condensed consolidated statements of cash flows
and condensed consolidated statements of income for the six
months ended June 30, 1996 and is qualified in its entirety by
reference to such financial statements. Dollars are in thousands
except per share amounts.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 342
<SECURITIES> 0
<RECEIVABLES> 12,829
<ALLOWANCES> 171
<INVENTORY> 0
<CURRENT-ASSETS> 15,244
<PP&E> 5,286
<DEPRECIATION> 0
<TOTAL-ASSETS> 31,586
<CURRENT-LIABILITIES> 9,666
<BONDS> 4,931
0
0
<COMMON> 42
<OTHER-SE> 15,693
<TOTAL-LIABILITY-AND-EQUITY> 31,586
<SALES> 0
<TOTAL-REVENUES> 23,261
<CGS> 13,799
<TOTAL-COSTS> 13,799
<OTHER-EXPENSES> 7,110
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343
<INCOME-PRETAX> 2,009
<INCOME-TAX> 904
<INCOME-CONTINUING> 1,105
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,105
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.25
</TABLE>
