<PAGE>
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 March 31, 1997
Commission file number 0-22554
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OPINION RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 22-3118960
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(State of incorporation) (I.R.S. Employer
Identification No.)
23 Orchard Road
Skillman, NJ 08558
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(Address of principle executive offices) (Zip Code)
908-281-5100
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(Registrant's telephone number, including area 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;
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(2) has been subject to such filing requirements for the past 90 days: Yes
X No _______
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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 - 4,143,889 shares as of March 31, 1997
<PAGE>
INDEX
Opinion Research Corporation and Subsidiaries
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets - March 31, 1997
and December 31, 1996
Condensed consolidated statements of income - Three months ended
March 31, 1997 and 1996
Condensed consolidated statements of cash flows - Three months ended
March 31, 1997 and 1996
Notes to condensed consolidated financial statements - March 31, 1997
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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OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)
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<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 397 $ 865
Accounts receivable:
Billed 7,759 7,480
Unbilled services 3,675 2,867
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11,434 10,347
Less: allowance for doubtful accounts 162 162
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11,272 10,185
Prepaid and other current assets 2,717 2,655
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Total Current Assets 14,386 13,705
Property and equipment, net 5,373 5,511
Capitalized production costs, net 449 516
Intangibles, net 1,328 1,427
Goodwill, net 10,735 10,971
Other assets 772 642
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Total Assets $33,043 $32,772
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,356 $ 1,979
Accrued expenses 1,307 1,305
Advanced billings 4,475 2,782
Revolving credit line 895 380
Notes payable 4,988 6,047
Current maturities of obligations under capital leases 214 220
Deferred interest payable 1,309 1,203
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Total Current Liabilities 14,544 13,916
Long term debt 764 993
Long term maturities of obligations under capital leases 228 276
Deferred income taxes 1,091 1,103
Other liabilities 895 839
Stockholders' 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 4,143,889 outstanding in 1997 and 42 42
4,231,747 shares issued and 4,143,889 outstanding in 1996.
Additional paid-in capital 14,011 14,011
Retained earnings 1,680 1,526
Foreign currency translation adjustment 278 556
Treasury stock, at cost, 87,858 shares in 1997 and 1996 (490) (490)
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Total Stockholders' Equity 15,521 15,645
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$33,043 $32,772
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</TABLE>
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OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except share and per share amounts)
(Unaudited)
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1997 1996
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<S> <C> <C>
Revenues $12,519 $11,557
Cost of revenues 7,990 6,933
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Gross profit 4,529 4,624
Selling, general and administrative expenses 3,405 3,017
Depreciation and amortization 657 538
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Operating income 467 1,069
Interest expense, net 176 136
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Income before provision for income taxes 291 933
Provision for income taxes 137 414
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Net income $ 154 $ 519
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Net income per common share:
Primary $ 0.04 $ 0.12
Fully diluted $ 0.04 $ 0.12
Weighted average common shares outstanding:
Primary 4,143,889 4,209,211
Fully diluted 4,143,889 4,899,636
</TABLE>
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<PAGE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1997 1996
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<S> <C> <C>
Net cash provided by operating activities $ 729 $ 1,105
Cash flows from investing activities:
Payment for acquisitions (150)
Proceeds from sale of fixed assets 11
Capital expenditures (210) (523)
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Net cash used in investing activities (360) (512)
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Cash flows from financing activities:
Issuance of notes payable 49 20
Borrowings under line-of-credit agreements 1,517 2,480
Repayments of notes payable (230) (871)
Repayments under line-of-credit agreements (2,117) (1,580)
Capital stock repurchase 0 (372)
Repayments under capital lease arrangements (56) (75)
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Net cash provided by (used in) financing activities (837) (398)
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Increase (decrease) in cash and cash equivalents (468) 195
Cash and cash equivalents at beginning of period 865 340
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Cash and cash equivalents at end of period $ 397 $ 535
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</TABLE>
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<PAGE>
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1997
(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-month period ended March 31,
1997 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1997. 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, 1996.
NOTE B - EARNINGS PER SHARE
Primary earnings per share is determined by dividing net income by the weighted
average common shares and stock options outstanding. Fully diluted earnings per
share for the three months ended March 31, 1996, takes 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 the earnings per share calculation
for the three months ended March 31, 1997 as they expired on November 30, 1996.
NOTE C - 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 credit facility which has been extended through June 30, 1997.
During March of 1997 the Company executed a Letter of Intent for an increased
credit facility with its senior lender. The new facility is for $15,000,000;
$9,000,000 of revolving credit and $6,000,000 of 5 year notes. Subordinated
debt of $3,000,000 and deferred interest of $1,309,000 will be repaid from this
credit facility. The agreement is for 3 years and is secured by substantially
all assets of the Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - FIRST QUARTER 1997 AS COMPARED TO FIRST QUARTER 1996
Revenues for the first quarter of 1997 increased $962,000, or 8%, as compared to
the first quarter of 1996. This increase in revenues principally resulted from
GSR/SIA, Limited ("SIA"), which was purchased on October 1, 1996, being reported
in 1997, a slight increase in U.S. revenues and a decline in revenues from
Gordon Simmons Research Group ("GSR"). Although less than the revenues
generated in the first quarter of 1996, GSR has shown an increase in revenues
over the fourth quarter of 1996.
Gross profit for the three months ended March 31, 1997 decreased by $95,000 to
$4,529,000 from $4,624,000 or 2%. As a percent of revenues, gross profit has
declined to 36% for the first three months of 1997. Increased staffing levels
and subcontracting expenses are responsible for the lower gross profit. As
revenues increase, the gross margin is expected to recover.
Selling, general and administrative expenses increased to $3,405,000 from
$3,017,000 for the three months ended March 31, 1997 relative to the same period
in 1996. This increase can be primarily attributed to the inclusion of SIA for
the three months ended March 31, 1997. As a percent of revenues, SG&A has
increased to 27% for the three months ended March 31, 1997 from 26% for the
comparable period in 1996.
Depreciation and amortization expense increased to $657,000 from $538,000 for
the three months ended March 31, 1997, relative to the same period in 1996. As
a percent of revenues, depreciation and amortization remained constant at 5% for
the three months ended March 31, 1997 and 1996.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations for the first three months of 1997 was $729,000.
Investing and financing activities for the first three months of 1997 included
capital expenditures of $210,000, a payment of $150,000 to the former owner of
the ORC Healthcare practice, a net repayment of $600,000 under a Line of Credit
agreement, and a net decrease of $181,000 in notes payable. The Company
believes that its current sources of liquidity and capital will be sufficient to
fund its long-term obligations and working capital needs for the foreseeable
future.
<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
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a) (11) Statement regarding computation of per share earnings
b) Reports on Form 8-K
None.
<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
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(Registrant)
Date: May 7, 1997 /s/ John F. Short
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John F. Short, Vice Chairman & CFO
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OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Exhibit (11)-Statement Re: Computation of Earnings per Share
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1997 1996
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(000's omitted, except per share data)
<S> <C> <C>
Primary:
Average shares outstanding 4,144 4,147
Net effect of dilutive stock options - based
on the treasury stock method 0 62
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Totals 4,144 4,209
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Net income $ 154 $ 519
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Per share amount $ 0.04 $ 0.12
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Fully diluted:
Average shares outstanding 4,144 4,147
Net effect of dilutive stock options -
based on the treasury stock method 0 98
Assumed conversion of convertible debentures 0 654
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Totals 4,144 4,899
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Net income $ 154 $ 519
Add debenture interest, net of tax effect 0 54
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Totals 154 573
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Per share amount $ 0.04 $ 0.12
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</TABLE>
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<TABLE> <S> <C>
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEET AS OF 3/31/96 AND THE RELATED CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1997
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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 397
<SECURITIES> 0
<RECEIVABLES> 11,434
<ALLOWANCES> 162
<INVENTORY> 0
<CURRENT-ASSETS> 14,386
<PP&E> 5,373
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,043
<CURRENT-LIABILITIES> 14,544
<BONDS> 992
0
0
<COMMON> 42
<OTHER-SE> 15,479
<TOTAL-LIABILITY-AND-EQUITY> 33,043
<SALES> 0
<TOTAL-REVENUES> 12,519
<CGS> 7,990
<TOTAL-COSTS> 7,990
<OTHER-EXPENSES> 4,062
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 176
<INCOME-PRETAX> 291
<INCOME-TAX> 137
<INCOME-CONTINUING> 154
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
