<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------------------
FORM 8 - K/A
AMENDMENT NO.1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 15, 2000
(August 31, 2000)
-----------------
OPINION RESEARCH CORPORATION
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 000-22554 22-3118960
--------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
23 Orchard Road, Skillman, NJ 08558
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (908) 281-5100
--------------
<PAGE>
Item 2. Acquisition
On September 15, 2000 the Registrant filed with the Securities and
Exchange Commission a Current Report on Form 8-K (the "September 8-K") regarding
its acquisition of a portion of the assets of C/J Research, Inc., an Illinois
corporation ("C/J"), pursuant to a certain Asset Purchase Agreement (the
"Agreement"), dated August 31, 2000, by and among the Registrant, ORC Consumer,
Inc., C/J, and the stockholders of C/J.
In accordance with Rule 3-05(b)(i) and Article 11 under Regulation S-X,
as referenced by Items 7(a) and 7(b) of Form 8-K, the Registrant is required to
furnish the below-listed (i) financial statements of C/J and (ii) certain pro
forma information with regard to the Registrant in filing its Form 8-K. The
Registrant hereby amends the September 8-K to file such financial statements and
pro forma information, in accordance with Item 7(a)(4) of Form 8-K.
(i) The audited financial statements of C/J as of and for the year
ended December 31, 1999.
(ii) The unaudited pro forma consolidated financial statements of
Opinion Research Corporation as of June 30, 2000 and for the year
ended December 31, 1999 and for the six months ended June 30, 2000.
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of the acquired business. The following financial
statements are included herein:
I. Financial Statements of C/J Research, Inc.
Independent Auditor's Report
Balance Sheet as of December 31, 1999
Statement of Earnings for the year ended December 31, 1999
Statement of Changes in Stockholders' Equity for the year ended December
31, 1999
Statement of Cash Flows for the year ended December 31, 1999
Notes to Financial Statements
Schedule of General and Administrative Expenses for the year ended
December 31, 1999
Independent Auditor's Report on Supplementary Information
(b) Pro forma financial information. The following pro forma financial
information is included herein:
I. Pro Forma Consolidated Financial Statements of Opinion Research Corporation
Introduction
Pro Forma Consolidated Balance Sheet as of June 30, 2000 (unaudited)
Pro Forma Consolidated Statement of Operations for the Six Months Ended
June 30, 2000 (unaudited)
Pro Forma Consolidated Statement of Operations for the Year Ended December
31, 1999 (unaudited)
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits
<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 hereunto duly authorized.
Opinion Research Corporation
Dated: October 30, 2000 By: /s/ Douglas L. Cox
----------------- ---------------------
Douglas L. Cox
Executive Vice President and
Chief Financial Officer
<PAGE>
C/J RESEARCH, INC.
(An Illinois Corporation)
Financial Statements and Schedule
December 31, 1999
(With Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
C/J Research, Inc.:
We have audited the accompanying balance sheet of C/J Research, Inc. as of
December 31, 1999 and the related statements of earnings, changes in
stockholders' equity, and cash flows for the year then ended. The financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C/J Research, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Folisi, Samz & Company
Schaumburg, Illinois
March 23, 2000
<PAGE>
C/J Research, Inc.
Balance Sheet
December 31, 1999
ASSETS
------
Current assets:
Cash and temporary cash investments $1,096,045
Accounts receivable 1,851,352
Prepaid expenses and other current assets 95,681
----------
Total current assets 3,043,078
----------
Fixed assets, at cost, less
accumulated depreciation 141,416
----------
Other assets:
Investments, at cost (market $1,775 in 1999) 6,000
Refundable deposits 4,059
----------
Total other assets 10,059
----------
$3,194,553
==========
See accompanying notes to financial statements.
<PAGE>
C/J Research, Inc.
Balance Sheet, continued
December 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable - officers $ 400,000
Accounts payable 87,892
Income taxes payable 13,628
Accrued telephone expense payable 56,104
Accrued payroll, bonuses and payroll
taxes payable 95,513
Accrued sales commission payable 44,908
Accrued profit sharing contribution 79,683
Deferred income 241,592
----------
Total current liabilities 1,019,320
----------
Stockholders' equity:
Common stock; no par value, $5 stated value
Authorized 10,000 shares; issued and
outstanding 482 shares 2,411
Retained earnings 2,172,822
----------
Total stockholders' equity. 2,175,233
----------
$3,194,553
==========
<PAGE>
C/J RESEARCH, INC.
Statement of Earnings
Year ended December 31, 1999
Revenue from services $ 8,581,600
-----------
Direct project costs:
Hourly labor 2,217,581
Telephone 382,539
Field interviewing 289,661
Data processing, coding and sampling expenses 371,002
Honorarium expense 509,279
-----------
3,770,062
-----------
Gross margin 4,811,538
General and administrative expenses 3,241,428
-----------
Earnings from operations 1,570,110
-----------
Other income (expense):
Interest expense (52,914)
Interest and dividend income 34,937
Miscellaneous income 670
-----------
(17,307)
-----------
Earnings before income taxes 1,552,803
Income tax expense 14,200
-----------
Net earnings $ 1,538,603
===========
See accompanying notes to financial statements.
<PAGE>
C/J RESEARCH, INC.
Statement of Changes in Stockholders' Equity
Year ended December 31, 1999
Common Retained
Stock Earnings
----- --------
Balance at December 31, 1998 $ 2,411 2,253,728
Net earnings -- 1,538,603
Cash dividends paid -- (1,619,509)
-------- ---------
Balance at December 31, 1999 $ 2,411 2,172,822
======== =========
See accompanying notes to financial statements.
<PAGE>
C/J RESEARCH, INC.
Statement of Cash Flows
Year Ended December 31, 1999
Cash flows from operating activities:
Net earnings $ 1,538,603
-----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization of fixed assets 51,453
Increase in accounts receivable (185,902)
Decrease in prepaid income taxes 700
Increase in prepaid expenses and other current assets (12,546)
Decrease in refundable deposits 2,384
Decrease in accounts payable (12,356)
Decrease in income taxes payable (3,232)
Decrease in accrued telephone expense payable (68,394)
Decrease in accrued payroll, bonuses and payroll
taxes payable (123,288)
Increase in accrued sales commission payable 1,354
Increase in accrued profit sharing contribution 2,898
Increase in deferred income 45,462
-----------
Total adjustments (301,467)
-----------
Net cash provided by operating activities 1,237,136
-----------
Cash flows from investing activities - purchase of
fixed assets (86,034)
-----------
Net cash used by investing activities $ (86,034)
-----------
(continued)
<PAGE>
C/J RESEARCH, INC.
Statement of Cash Flows, Continued
Year Ended December 31, 1999
Cash flows from financing activities:
Advances under line-of-credit agreement $ 400,000
Repayments under line-of-credit agreement (400,000)
Cash dividends paid (1,619,509)
-----------
Net cash used by financing activities (1,619,509)
-----------
Net decrease in cash and
temporary cash investments (468,407)
Cash and temporary cash investments
at beginning of year 1,564,452
-----------
Cash and temporary cash investments
at end of year $ 1,096,045
===========
See accompanying notes to financial statements.
<PAGE>
C/J RESEARCH, INC.
Notes to Financial Statements
December 31, 1999
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Nature of Operations
--------------------
The Company provides research services to various industries
throughout the United States. Research services are conducted at its
interviewing facilities or field locations.
(b) Revenue Recognition
-------------------
Revenue from projects is recognized as services are performed. Revenue
recognized on projects in progress at year end is based upon the
percentage of completion of the project. Percentage of completion for
telephone related projects is measured by the total hours incurred on
the project as a percent of the total estimated project hours, and for
field/mall related projects by the total of costs incurred on the
project as a percent of total estimated project costs.
(c) Fixed Assets and Depreciation
-----------------------------
Fixed assets are stated at cost. Expenditures for acquisitions,
renewals and betterments are capitalized, whereas maintenance and
repair costs are expensed as incurred. When fixed assets are retired
or otherwise disposed of, the appropriate accounts are relieved of
costs and accumulated depreciation and any resulting gain or loss is
credited or charged to income.
Fixed assets acquired after December 31, 1980 and prior to January 1,
1987 are depreciated using the accelerated cost recovery system for
both financial and income tax reporting purposes. Fixed assets
acquired after December 31, 1986 are depreciated under the modified
accelerated cost recovery system for both financial and income tax
reporting purposes.
(continued)
<PAGE>
2
C/J RESEARCH, INC.
Notes to Financial Statements
(1) Summary of Significant Accounting Policies, continued
-----------------------------------------------------
(d) Investments
-----------
Investments are recorded at cost.
(e) Deferred Income
---------------
Deferred income represents the amount of billings in excess of the
amount of revenue earned on research projects. Research projects are
generally completed within one year.
(f) Income Taxes
------------
The Company has elected to be taxed under the provisions of Subchapter
S of the Internal Revenue Code (S Corporation).
Under those provisions, the Company does not pay federal corporate
income taxes on its taxable income. State corporate income taxes are
provided for those states in which the Company conducts business and
applicable state law provides for a corporate income tax. The
stockholders are liable for individual federal and state income taxes
on their respective share of the Company's taxable income.
(g) Statements of Cash Flows
------------------------
The Company considers all highly liquid debt investments with a
maturity of three months or less when purchased to be cash
equivalents. The Company does not consider any of its investments to
meet the definition of cash equivalent.
The amount of interest and income taxes paid for the years ended
December 31, 1999 are summarized below:
Interest $ 52,914
======
Income taxes $ 16,732
======
(continued)
<PAGE>
3
C/J RESEARCH, INC.
Notes to Financial Statements
(h) Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts of assets,
liabilities, and disclosures at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Accordingly, actual results could differ from those estimates.
(2) Cash and Temporary Cash Investments
-----------------------------------
Cash and temporary cash investments at December 31, 1999 consist of the
following:
Checking/sweep accounts $ 1,062,821
Savings accounts 32,924
Petty cash 300
---------
$ 1,096,045
=========
The combined checking/sweep accounts and savings accounts earn interest at
fluctuating rates as determined by the bank or money trust fund. The excess
checking account monies are transferred into a "sweep" account for
investment in a U.S. Government money trust.
(3) Accounts Receivable
-------------------
Accounts receivable at December 31, 1999 are summarized as follows:
Trade receivables $ 1,449,493
Accrued trade receivables 401,859
---------
$ 1,851,352
=========
(continued)
<PAGE>
4
C/J RESEARCH, INC.
Notes to Financial Statements
(3) Accounts Receivable (continued)
-------------------------------
Included in trade receivables at December 31, 1999 are $92,748 of billings
on research projects which had not been earned at the end of the respective
year. Accrued trade receivables represent income earned and not billed on
research projects in progress at the end of the year. All of the Company's
accounts receivable are pledged as security for its bank line of credit
(note 5) and notes payable to officers (note 6).
(4) Fixed Assets and Accumulated Depreciation
-----------------------------------------
Fixed assets and accumulated depreciation at December 31, 1999 are
summarized as follows:
Assets:
Office furniture and equipment $ 1,081,672
Leasehold improvements 57,309
---------
1,138,981
---------
Accumulated depreciation:
Office furniture and equipment 944,470
Leasehold improvements 53,095
---------
997,565
---------
Fixed assets, net $ 141,416
=========
All of the Company's fixed assets are pledged as security for
its bank line of credit (note 5) and notes payable to officers
(note 6).
(5) Note Payable - Bank Line of Credit
----------------------------------
The Company has a $1,000,000 line of credit at December 31, 1999.
Borrowings under this line of credit are at a current index rate determined
by the bank, which approximates the prime rate, and are due on April 30,
2000 and are secured by all of the assets of the Company including an
assignment of the Company's accounts receivable. There were no outstanding
borrowings at December 31, 1999.
(continued)
<PAGE>
5
C/J RESEARCH, INC.
Notes to Financial Statements
(5) Note Payable - Bank Line of Credit (continued)
----------------------------------------------
Under the provisions of the line of credit agreement, the Company is, among
other matters, restricted to minimum levels of working capital and tangible
net worth (as defined). The Company is in compliance with the line of
credit agreement covenants at December 31, 1999.
(6) Notes Payable - Officers
------------------------
At December 31, 1999, the Company has a revolving $1,000,000 borrowing
agreement with the officers of the Company. Borrowings under this agreement
are at an interest rate of 10% and are due on demand and are secured by all
of the assets of the Company including an assignment of the Company's
accounts receivable. There were outstanding borrowings of $400,000 at
December 31, 1999. This debt is subordinate to the bank line of credit
(note 5).
(7) Income Taxes
------------
The Company previously received approval from the Internal Revenue Service
to be taxed as an S corporation. As a result, no provision for federal
income tax expense has been presented in the financial statements for the
year ended December 31, 1999, as such taxes are to be paid by the Company's
stockholders individually. A provision for state income taxes has been
provided for those states in which the Company conducted business and
applicable state law provides for a corporate level income tax thereon.
The provision for deferred income taxes is the result of temporary timing
differences in the recognition of officer bonuses and accrued payroll
expense for certain company officer-shareholders. The financial statements
reflect the accrued bonuses and payroll expense whereas for income tax
purposes these are not recognized until paid.
(continued)
<PAGE>
6
C/J RESEARCH, INC.
Notes to Financial Statements
(7) Income Taxes (continued)
------------------------
The components of the provision for income tax expense for 1999 is as
follows:
Current - state $ 13,500
Deferred - state 700
------
Total income taxes $ 14,200
======
(8) Profit Sharing Plan
-------------------
The Company has a discretionary (elective) profit sharing plan covering all
employees meeting the minimum age, yearly minimum hours and years of
service requirements as specified by the plan. An outside consultant
assists with the calculation of the annual contribution. This plan also
includes a salary deferral (401K) option. The salary deferral plan permits
a participant to elect to defer up to 10% of compensation with a (non-
elective) partial matching Company contribution. The non-elective Company
contribution was $69,683 for the year ended December 31, 1999. The
discretionary profit sharing (elective) contribution expense was $10,000
for the year ended December 31, 1999.
(9) Related Party Transactions
--------------------------
The Company purchases data entry services from THG Associates (THG), a
partnership in which the general partners are also the Company's officer-
shareholders. Data entry services billed to the Company amounted to $14,650
for the year ended December 31, 1999.
The Company had notes payable of $400,000 due to officers (note 6) at
December 31, 1999. Interest expense on these notes totaled $39,671 for the
year ended December 31, 1999.
(continued)
<PAGE>
7
C/J RESEARCH, INC.
Notes to Financial Statements
(10) Lease Commitments
-----------------
At December 31, 1999, the Company was obligated under two long-term non-
cancelable leases, one for office space expiring February 28, 2002 and
another for interviewing facilities which expires June 30, 2001. Under the
terms of the office space lease, the Company is required to make base
monthly payments of $11,117 through February 28, 2000 with yearly increases
as specified in the lease, plus a pro-rata share of the excess amount of
operating expenses and real estate taxes over the base year (i.e. 1999)
amounts. The lease for interviewing facilities has a monthly rent of
$6,562.
The minimum rental commitments, inclusive of the Company's pro-rata share
of operating expenses and real estate taxes based on 1999, for years
subsequent to 1999 are as follows:
Year ending
December 31 Amount
----------- ------
2000 $ 332,418
2001 340,226
2002 46,976
---------
$ 719,620
=========
Total rent expense for office space, including the pro-rata share of the
building's operating expenses and interviewing facilities, for 1999 was
$326,438. Total rent expense for computer software was $75,058, automobile
leases was $37,432 and office equipment was $27,849 for the year ended
December 31, 1999.
(continued)
<PAGE>
8
C/J RESEARCH, INC.
Notes to Financial Statements
(11) Concentration of Credit Risk
----------------------------
In the normal course of business, the Company provides credit to its
customers. The Company performs on-going credit evaluations of its
customers. The Company believes its portfolio of accounts receivable is
diversified and as a result its credit risks are minimal. Historically, the
Company's uncollected accounts receivable have been insignificant. As a
general policy, the Company does not require collateral for its
receivables.
At December 31, 1999, the Company has cash deposits in excess of federally
insured limits with one financial institution in Chicago, Illinois. Bank
deposits with this institution totaled $119,433 at December 31, 1999.
Additionally, the Company's temporary cash investments in a government
money trust fund totaling $1,010,208 at December 31, 1999 are not covered
by federal depository insurance, but are backed by the full faith and
credit of the U.S. Government and its agencies.
<PAGE>
Schedule A
----------
C/J Research, Inc.
Schedule of General and Administrative Expenses
Year ended December 31, 1999
Management and staff payroll $1,632,730
Sales commissions 178,313
Rent 326,438
Depreciation and amortization of
fixed assets 51,453
Profit sharing plan contribution 79,683
Travel and entertainment 77,471
Computer software rental 75,058
Payroll taxes 120,985
Insurance - health and life 98,634
Insurance - general 28,529
Office supplies 40,309
Printing and stationery 43,068
Air freight 51,637
Automobile leasing 37,432
Repairs and maintenance 94,892
Advertising 54,087
Copier supplies and paper 16,325
Legal and accounting fees 10,351
Electricity 25,223
Computer supplies 21,342
Office machine rental 27,849
Postage 49,793
Payroll processing 14,543
Dues and subscriptions 19,707
Employee benefits 16,948
Messenger 4,981
Employee messenger 3,700
Office plant rental 6,140
Holiday gifts 4,585
Bad debts 4,875
Water 636
Miscellaneous 2,072
Profit sharing plan expense 5,479
Contributions 1,710
Metered gas 600
Taxes and licenses 11,260
Training 2,590
----------
$3,241,428
==========
See accompanying Auditors' report.
<PAGE>
Independent Auditors' Report
on Supplementary Information
----------------------------
The Board of Directors
C/J Research, Inc.
We have audited and reported separately herein on the financial statements of
C/J Research, Inc. as of and for the year ended December 31, 1999.
The audit referred to above was directed primarily toward formulating an opinion
on the financial statements of C/J Research, Inc., taken as a whole. The
accompanying schedule of general and administrative expenses at December 31,
1999 is presented for supplementary analysis purposes and is not necessary for a
fair presentation of the financial position and results of operations and cash
flows of the Company. The schedule has been subjected to the auditing procedures
applied in the audit of the financial statements and, in our opinion, is stated
fairly in all material respects only when considered in conjunction with the
related financial statements taken as a whole.
/s/ Folisi, Samz & Company
Schaumburg, Illinois
March 23, 2000
<PAGE>
OPINION RESEARCH CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma consolidated balance sheet of the Company
as of June 30, 2000 gives effect to the acquisition of C/J Research, Inc.
completed by the Company subsequent to such date and financing of such
acquisition, as if all such transactions had occurred on June 30, 2000.
The following unaudited pro forma consolidated statements of operations of
the Company for the six months ended June 30, 2000 and the year ended December
31, 1999 give effect to the acquisition and the financing thereof, as if all
such transactions had occurred at the beginning of the respective periods.
The unaudited pro forma consolidated financial statements are based upon
certain assumptions and estimates which are subject to change. These statements
are not necessarily indicative of the actual results of operations that might
have occurred, nor are they necessarily indicative of expected results in the
future.
The pro forma consolidated financial statements should be read in
conjunction with the Company's historical consolidated financial statements and
related notes filed as an Exhibit hereto and the consolidated financial
statements of C/J Research, Inc. presented elsewhere herein.
<PAGE>
OPINION RESEARCH CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Opinion C/J
Research Research, Pro Forma Pro Forma
Corporation Inc. Adjustments Consolidated
---------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,762 $ 1,139 $ 775 (a) $ 2,976
(700)(c)
Accounts receivable, net 34,244 2,228 36,472
Prepaid and other current assets 1,663 129 1,792
---------------------------------------------------------------------------
Total current assets 37,669 3,496 75 41,240
Non-current assets:
Property and equipment, net 8,791 131 8,922
Intangible assets, net 3,662 - 1,300 (b) 4,962
Goodwill, net 39,514 7,613 (b) 47,127
Other assets 3,697 10 3,707
---------------------------------------------------------------------------
Total non-current assets 55,664 141 8,913 64,718
===========================================================================
Total assets $ 93,333 $ 3,637 $ 8,988 $ 105,958
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 13,475 $ 774 $ 255 (a) $ 14,504
Deferred revenue 1,921 288 2,209
Short-term borrowings 2,509 700 (700)(c) 2,509
Other current liabilities 5,506 1,308 (b) 6,814
---------------------------------------------------------------------------
Total current liabilities 23,411 1,762 863 26,036
Long-term liabilities:
Long-term debt 46,094 46,094
Deferred income taxes 1,104 1,104
Other liabilities 1,061 1,061
---------------------------------------------------------------------------
Total non-current liabilities 48,259 48,259
Stockholders' equity:
Common stock 43 2 7 (a) 50
(2)(d)
Additional paid-in capital 15,656 9,993 (a) 25,649
Retained earnings 6,549 1,873 (1,873)(d) 6,549
Treasury stock (186) (186)
Accumulated other comprehensive income (399) (399)
-----------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 21,663 1,875 8,125 31,663
---------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 93,333 $ 3,637 $ 8,988 $ 105,958
=============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
<PAGE>
OPINION RESEARCH CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
(AMOUNTS, EXCEPT PER SHARE AMOUNTS, IN THOUSANDS)
<TABLE>
<CAPTION>
Opinion C/J
Research Research, Pro Foma Pro Forma
Corporation Inc. Adjustments Consolidated
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 79,570 $ 5,270 $ 84,840
Cost of revenues 52,763 2,312 55,075
-----------------------------------------------------------------------
Gross profit 26,807 2,958 29,765
Selling, general and administrative expenses 17,804 1,693 19,497
Depreciation and amortization 3,410 19 320 (a) 3,749
-----------------------------------------------------------------------
Operating income 5,593 1,246 (320) 6,519
Interest expense, net 2,708 (4) 4(b) 2,708
-----------------------------------------------------------------------
Income before provision for income taxes 2,885 1,250 (324) 3,811
Provision for income taxes 1,267 11 359 (c) 1,637
-----------------------------------------------------------------------
Net income $ 1,618 1,239 ($683) $ 2,174
=======================================================================
Earnings per share:
Basic $ 0.38 $ 0.40
================= =========
Diluted 0.34 $ 0.37
================= =========
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
financial statements
<PAGE>
OPINION RESEARCH CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
(AMOUNTS, EXCEPT PER SHARE AMOUNTS, IN THOUSANDS)
<TABLE>
<CAPTION>
Opinion C/J
Research Research Pro Forma Pro Forma
Corporation Inc. Adjustments Consolidated
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $118,621 $8,582 $127,203
Cost of revenues 75,849 3,770 79,619
------------------------------------------------------------------
Gross profit 42,772 4,812 47,584
Selling, general and administrative expenses 28,502 3,191 31,693
Depreciation and amortization 5,807 51 641 (a) 6,499
------------------------------------------------------------------
Operating income 8,463 1,570 (641) 9,392
Interest expense, net 4,005 17 (17)(b) 4,005
------------------------------------------------------------------
Income before provision for income taxes 4,458 1,553 (624) 5,387
Provision for income taxes 1,944 14 358 (c) 2,316
------------------------------------------------------------------
Income (loss) before extraordinary loss $2,514 $1,539 ($982) $3,071
==================================================================
Earnings per share:
Basic $0.59 $O.57
================= ==============
Diluted $0.58 $0.56
================= ==============
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
<PAGE>
OPINION RESEARCH CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNT IN THOUSANDS)
(A) BACKGROUND
Opinion Research Corporation was established in 1938 to apply the
principles of general public opinion polling to marketing issues facing
America's largest companies. The Company has evolved to provide primary market
research, social research, information services, marketing services, including a
focus on businesses selling primarily to other businesses, and model-based
telemarketing. The Company assists clients in evaluating, monitoring and
optimizing the effectiveness of their marketing and sales. The Company's
services and products address issues as customer loyalty and retention, market
demand and forecasting, corporate image, competitive positioning, public sector
primary research, and model-based telemarketing.
(B) HISTORICAL FINANCIAL STATEMENTS
The historical financial data presented in these pro forma consolidated
financial statements represent the financial position and results of operations
of (i) the Company as of and for the six months ended June 30, 2000 and the year
ended December 31, 1999 and (ii) C/J Research, Inc.("C/J") as of and for the six
months ended June 30, 2000 and the year ended December 31, 1999. Such data is
derived from the respective financial statements of the Company and C/J
Research, Inc..
(C) ACQUISITION
The Company acquired substantially all of the assets of C/J pursuant to an
Asset Purchase Agreement dated August 31, 2000. The purchase price was comprised
of a $9,225 cash payment and approximately $325 of additional costs related to
the acquisition. The fair value of the net assets acquired was $637.
Identifiable intangible assets valued at $1,300 are being amortized using the
straight-line method over a period of five years. The excess consideration paid
over the estimated fair value of net assets acquired and identifiable intangible
assets of $7,613 has been recorded as goodwill to be amortized using the
straight-line method over a period of twenty years.
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(D) PRO FORMA ADJUSTMENTS
Balance sheet adjustments:
(a) Records the funding of the purchase price from operations and partially
through an equity investment.
(b) Records the allocation of the purchase price over the estimated fair value
of the net assets acquired, $1,300 for intangible assets and $7,613 for
goodwill.
(c) Records the elimination of assets not acquired and liabilities not assumed.
(d) Records the elimination of the historical stockholders' equity of C/J
Research, Inc.
Statements of operations adjustments:
(a) Records the amortization (i) of the identifiable intangible assets over a
period of five years; and (ii) of the goodwill attributable to the
acquisition over a period of twenty years.
(b) To eliminate the historical non-operating income/expense.
(c) Records an additional provision for income taxes at an effective tax rate of
40%.
(E) EARNINGS PER SHARE
Earnings per share is calculated by dividing the net income by the weighted
average outstanding shares during the period. The historical weighted average
outstanding shares during the periods are as follows:
June 30, December 31,
2000 1999
------------ ---------------
Basic 4,269,115 4,244,026
============ ===============
Diluted 4,766,225 4,331,700
============ ===============
For the pro forma calculation as of June 30, 2000 and December 31, 1999,
respectively, 1,176,458 shares of the Company's common stock were assumed issued
at the beginning of the respective periods arising from the equity investment.
There is no dilutive effect of warrants associated with the equity investment
for each of the respective periods.
