Opinion Research (NASDAQ:ORCI)
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PRINCETON, N.J., Oct. 31 /PRNewswire-FirstCall/ -- Opinion Research Corporation (NASDAQ:ORCI), today announced financial results for the third quarter ended September 30, 2005.
Revenues
Revenues for the quarter were $48.7 million versus $48.9 million in the prior year's third quarter. Social research revenues were $34.1 million versus $32.7 million in last year's third quarter. Market research revenues totaled $12.9 million versus $13.0 million in the prior year's third quarter. Teleservices revenues were $1.8 million versus $3.2 million in last year's third quarter.
Income
The Company reported a net loss for the quarter of $4.65 million. This includes an impairment provision for the remaining goodwill in the teleservices segment, the previously announced write-off of expenses incurred in a postponed equity offering and a tax accrual adjustment due to a change in the estimated annual tax rate, which together reduced net income by approximately $5.0 million. Net loss per diluted common share was $2.58. The above items and the impact from the previously announced repurchase of the LLR interests reduced earnings per diluted common share by $2.64. Net income and diluted earnings per share for the third quarter of 2004 were $1.0 million and $0.15 respectively.
Nine Month's Results
For the first nine months of 2005, revenues were $149.4 million compared to $146.3 million in the first nine months of 2004.
The Company reported a net loss for the nine months of $3.2 million. This includes the goodwill impairment provision, a first quarter refinancing charge and the write-off of the equity offering expenses which together reduced net income by approximately $5.3 million. Net loss per diluted common share was $2.12. The above items and the impact from the repurchase of the LLR interests reduced earnings per diluted common share by $2.45. Net income and diluted earnings per share for the first nine months of 2004 were $1.7 million and $0.26 respectively. Last year's nine months was impacted by a refinancing charge that reduced net income by $1.5 million and diluted earnings per share by $0.24.
Business Outlook
Summarizing the quarter's results, Chairman and CEO, John F. Short, said, "We are pleased with the performance of our largest segment, social research, and are able to report that bookings of new social research business in the first nine months were over $160 million, a 50% increase over the same period in 2004. As a result, our social research backlog is currently $324 million. We are disappointed with the slow turnaround in market research and continued decline in teleservices but believe that we have taken the appropriate action to improve these businesses."
The Company expects revenues in 2005 to be around $198 to $200 million, net loss to be between $2.6 and $2.8 million and net loss per share to be between $2.10 and $2.14. These expectations include the third quarter goodwill impairment, the write-off of the equity offering expenses and the charge to net income available to common shares due to the repurchase of the LLR interests, and the first quarter refinancing charge, which together reduce net income by $5.3 million and diluted earnings per share by $2.54. The fourth quarter is expected to be profitable but due to the reduction in shares late in the year the net loss per share for the year may not decline from that reported for the first nine months.
The statements above concerning the Company's business outlook for 2005 are based on current expectations. These statements are forward-looking and actual results may differ materially. See "Forward-looking Statements" below.
Conference Call
Chairman and Chief Executive Officer John F. Short and Chief Financial Officer Douglas L. Cox will conduct an investor conference call at 4:00 p.m. (EST) on Monday, October 31. The dial-in number for the live conference call will be (866) 770-7120 (617) 213-8065 outside the U.S. and Canada) and enter conference passcode 94354526. There will be a live web cast of the conference call over the investor relations page of the company's Web site at http://www.opinionresearch.com/ as well as at http://www.fulldisclosure.com/.
For those who cannot listen to the live broadcast, an audio replay of the call will be available on the above web sites for 30 days. A telephone replay of the call will also be available from 6:00 p.m. on October 31 until 11:59 p.m. on November 7. To listen to the telephone replay, dial (888) 286-8010 (617) 801-6888 outside the U.S. and Canada) and enter conference passcode 75884966.
About Opinion Research Corporation
Founded in 1938, Opinion Research Corporation provides commercial market research, health and demographic research for government agencies, information services, teleservices and consulting. The company is a pioneering leader in the science of market and social research and has built an international organization to support market intelligence in both public and commercial markets. Further information is available at http://www.opinionresearch.com/.
Forward-looking Statements
This press release contains, within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995, forward- looking statements that are based on management's beliefs and assumptions, current expectations, estimates and projections. These statements are subject to risks and uncertainties and therefore actual results may materially differ. The Company disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Important factors and risks that may affect future results are described in the Company's filings with the Securities and Exchange Commission, copies of which are available upon request from the Company.
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except share and per share amounts)
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
2004 2005 2004 2005
Revenues $48,894 $48,697 $146,255 $149,417
Cost of revenues
(exclusive of depreciation) 34,692 35,505 103,455 107,210
Gross profit 14,202 13,192 42,800 42,207
Selling, general and
administrative expenses 10,130 9,912 30,398 31,153
Depreciation and amortization 1,017 1,068 2,914 3,060
Goodwill impairment charge - 5,530 - 5,530
Operating income (loss) 3,055 (3,318) 9,488 2,464
Interest expense 1,167 1,405 6,540 4,539
Other non-operating
(income) expense, net (85) 1,373 (386) 1,324
Income (loss) before
income tax expense (benefit) 1,973 (6,096) 3,334 (3,399)
Income tax expense (benefit) 972 (1,442) 1,632 (228)
Net income (loss) $1,001 $(4,654) $1,702 $(3,171)
Repurchased LLR interests - (9,904) - (9,904)
Net income (loss) available
to common shareholders $1,001 $(14,558) $1,702 $(13,075)
Net income (loss) per common share:
Basic $0.16 $(2.58) $0.27 $(2.12)
Diluted $0.15 $(2.58) $0.26 $(2.12)
Weighted average shares outstanding:
Basic 6,288,649 5,642,665 6,226,654 6,158,475
Diluted 6,483,720 5,642,665 6,435,092 6,158,475
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
30-Sep-05 31-Dec-04 30-Sep-05 31-Dec-04
Assets Liabilities and
stockholders'
equity
Current assets: Current liabilities:
Cash and Accounts payable $5,207 $6,254
equivalents $1,718 $467 Accrued expenses 10,289 9,191
Accounts Deferred revenues 3,950 4,344
receivable 24,583 26,001 Short-term
Allowance for borrowings 3,000 2,000
doubtful Other current
accounts (53) (93) liabilities 3,181 2,823
Unbilled Total current
services 17,927 17,986 liabilities 25,627 24,612
Prepaid expenses
and other Long-term
current assets 2,898 3,672 borrowings 56,927 40,286
Total current Other liabilities 1,584 1,542
assets 47,073 48,033
Non-current assets: Redeemable equity - 8,900
Fixed assets, net
of depreciation 10,015 10,105 Total stockholders'
Goodwill 26,970 32,748 equity 7,422 22,343
Other
intangibles, net Total liabilities
of amortization 243 421 and stockholders'
Other non-current equity $91,560 $97,683
assets 7,259 6,376
Total non-current
assets 44,487 49,650
Total assets $91,560 $97,683
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Segment Information
(in thousands)
US UK
Market Market Tele- Social Total Consol-
Research Research Services Research Segments Other idated
Three months ended September 30, 2004:
Revenues from
external
customers $6,023 $5,623 $3,213 $32,703 $47,562 $1,332 $48,894
Operating
(loss)
income (640) 58 236 3,378 3,032 23 3,055
Interest and other
non-operating
expenses, net 1,082
Income before
income tax expense $1,973
Three months ended September 30, 2005:
Revenues from
external
customers $6,072 $6,097 $1,750 $34,064 $47,983 $714 $48,697
Goodwill
impairment
charge - - (5,530) - (5,530) - (5,530)
Operating
(loss) income (685) 210 (5,865) 3,302 (3,038) (280) (3,318)
Interest and
other non-
operating
expenses,
net 2,778
Loss before
income tax
benefit $(6,096)
Nine months ended September 30, 2004:
Revenues from
external
customers $19,623 $16,681 $10,163 $95,897 $142,364 $3,891 $146,255
Operating
(loss)
income (1,920) 348 926 10,104 9,458 30 9,488
Interest
and other
non-operating
expenses,
net 6,154
Income before
income tax
expense $3,334
Nine months ended September 30, 2005:
Revenues from
external
customers $19,266 $17,236 $6,234 $104,118 $146,854 $2,563 $149,417
Goodwill
impairment
charges - - (5,530) - (5,530) - (5,530)
Operating
(loss)
income (1,390) 284 (6,254) 10,654 3,294 (830) 2,464
Interest and
other non-
operating
expenses,
net 5,863
Loss before
income tax
benefit $(3,399)
DATASOURCE: Opinion Research Corporation
CONTACT: Douglas L. Cox, Executive Vice President, Chief Financial
Officer of Opinion Research Corporation, +1-609-452-5274
Web site: http://www.opinionresearch.com/