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Opinion Research Reports Financial Results for 2003
Business Editors
PRINCETON, N.J.--(BUSINESS WIRE)--Feb. 19, 2004--Opinion Research Corporation (NASDAQ:ORCI), today announced financial results for the fourth quarter and year ended December 31, 2003. Summarizing the year's results, Chairman and CEO John F. Short said, "We are obviously disappointed with the consolidated results for the year, but pleased with the performance of our social research business and UK market research business. This was also a year for cost containment and further debt reduction, which helps position the Company for improved performance in 2004."
After a $16.3 million non-cash charge for goodwill impairment and severance expenses of $.7 million, the company experienced a net loss for the year of $8.9 million, or $1.47 per diluted share, versus a net loss of $2.9 million, or $0.49 per diluted share in 2002. The 2002 results included non-cash charges of $6.2 million for goodwill impairment and the cumulative effect of an accounting change.
Revenues
Revenues for the fourth quarter were $46.0 million versus $44.7 million in the prior year's fourth quarter. Social research revenues were $28.5 million versus $28.4 million in last year's fourth quarter. Market research revenues totaled $13.1 million versus $13.1 million in the prior year's fourth quarter. Teleservices revenues were $4.4 million versus $3.2 million in last year's fourth quarter.
Revenues for the full year 2003 were $179.6 million versus $175.3 million for the full year 2002. Social research revenues were $115.6 million versus $105.5 million last year. Market research revenues totaled $49.1 million versus $54.2 million in the prior year. Teleservices revenues were $14.9 million versus $15.6 million last year.
Income
The net loss for the fourth quarter was $11.3 million, or $1.85 per diluted share, versus a net loss of $5.3 million, or $0.88 per diluted share, in last year's fourth quarter. Results for the fourth quarter of 2003 were impacted by $12.0 million, net of tax benefits, for a goodwill impairment charge relating to both the US market research and teleservices business units and severance expenses relating to US market research. Results for the fourth quarter of 2002 were impacted by $5.9 million, net of tax benefits, for a goodwill impairment charge relating to US market research.
The net loss for the full year 2003 was $8.9 million, or $1.47 per diluted share, versus a net loss of $2.9 million, or $0.49 per diluted share, for the full year 2002. Results for 2003 were impacted by $12.0 million, net of tax benefits, for a goodwill impairment charge and severance expenses. Results for 2002 were impacted by $6.2 million, net of tax benefits, for a goodwill impairment charge and the cumulative effect of an accounting change.
The income tax benefit in 2003 is lower than statutory rates and the income tax provision in 2002 is higher than statutory rates due to the non-deductibility of certain goodwill impairment charges, and the fact that the company is not providing for tax benefits on non-US losses and state losses.
Business Outlook
Mr. Short commented, "We believe that the outlook for our U.S. businesses is improving, based on increases in the volume of new business inquiries we are receiving and the proposals we are submitting to potential clients. In the social research business, new contract bookings into backlog in 2003 totaled $201 million, a new record. We have won all of the key re-competitions in which we were the incumbent contractor, including a very substantial demographic and health survey contract with the U.S. Agency for International Development, for $106 million over a five-year period."
The company expects revenues in 2004 to be between $184 and $189 million, net income to be between $3.5 and $4.0 million and diluted earnings per share to be between $0.53 and $0.61.
The statements above concerning the company's business outlook for 2004 are based on current expectations. These statements are forward-looking and actual results may differ materially.
Conference Call
The company has scheduled an investor conference call for 10:00 a.m. (ET) on Friday, February 20. The dial-in number for the live conference call will be (outside the U.S. and Canada). There will be a live web cast of the conference call over the investor relations page of the company's Web site at www.opinionresearch.com as well as at 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 1:00 p.m. on February 20 until 11:59 p.m. on February 27. To listen to the telephone replay, dial (outside the U.S. and Canada) and enter conference ID . 5521695.
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 a worldwide data-collection network. Further information is available at www.opinionresearch.com.
This 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. Many of the factors that will determine the company's financial results are beyond the ability of the company to control or predict. 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.
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OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
----------------------------------------------------------------------
For The Three Months For The Year
Ended December 31, Ended December 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues $ 46,045 $ 44,691 $ 179,557 $ 175,260
Cost of revenues,
exclusive of
depreciation 32,577 30,957 125,890 120,705
---------- ---------- ---------- ----------
Gross profit 13,468 13,734 53,667 54,555
Selling, general and
administrative
expenses 10,245 10,144 39,437 39,736
Depreciation and
amortization 1,052 1,161 4,024 4,596
Goodwill impairment
charge 16,317 5,938 16,317 5,938
---------- ---------- ---------- ----------
Operating income
(loss) (14,146) (3,509) (6,111) 4,285
Interest and other non-
operating expenses,
net 1,443 1,208 4,996 4,784
---------- ---------- ---------- ----------
Loss before
provision for
income taxes (15,589) (4,717) (11,107) (499)
Provision for income
taxes (4,283) 561 (2,165) 2,122
---------- ---------- ---------- ----------
Loss before
cumulative effect
of accounting
change (11,306) (5,278) (8,942) (2,621)
Cumulative effect of
accounting change, net
of tax benefit of $0 - - - (292)
---------- ---------- ---------- ----------
Net loss $ (11,306) $ (5,278) $ (8,942) $ (2,913)
========== ========== ========== ==========
Basic earnings per
share:
Loss before
cumulative effect
of accounting
change $ (1.85) $ (0.88) $ (1.47) $ (0.44)
Cumulative effect
of accounting
change - - - (0.05)
---------- ---------- ---------- ----------
Net loss $ (1.85) $ (0.88) $ (1.47) $ (0.49)
========== ========== ========== ==========
Diluted earnings per
share:
Loss before
cumulative effect
of accounting
change $ (1.85) $ (0.88) $ (1.47) $ (0.44)
Cumulative effect
of accounting
change - - - (0.05)
---------- ---------- ---------- ----------
Net loss $ (1.85) $ (0.88) $ (1.47) $ (0.49)
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 6,109,398 6,007,449 6,078,535 5,948,797
Diluted 6,109,398 6,007,449 6,078,535 5,948,797
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
----------------------------------------------------------------------
Assets 31-Dec-03 31-Dec-02
--------- ---------
Current assets:
Cash and equivalents $ 2,766 $ 2,549
Accounts receivable 24,890 21,936
Allowance for doubtful accounts (336) (348)
Unbilled services 14,140 13,480
Prepaid expenses and other current assets 3,161 3,151
--------- ---------
Total current assets 44,621 40,768
Non-current assets:
Fixed assets, net of depreciation 9,099 8,549
Goodwill 32,537 48,577
Other intangibles, net of amortization 715 1,230
Other non-current assets 8,739 3,312
--------- ---------
Total non-current assets 51,090 61,668
--------- ---------
Total assets $ 95,711 $ 102,436
========= =========
Liabilities and stockholders' equity 31-Dec-03 31-Dec-02
--------- ---------
Current liabilities:
Accounts payable $ 5,473 $ 5,501
Accrued expenses 13,829 11,490
Deferred revenues 2,183 2,090
Short-term borrowings 3,000 6,000
Other current liabilities 762 954
--------- ---------
Total current liabilities 25,247 26,035
Long-term borrowings 41,922 40,866
Other liabilities 1,543 720
Redeemable equity 8,900 8,900
Total stockholders' equity 18,099 25,915
--------- ---------
Total liabilities and stockholders' equity $ 95,711 $ 102,436
========= =========
OPINION RESEARCH CORPORATION AND SUBSIDIARIES
Segment Information
(in thousands)
----------------------------------------------------------------------
US Market UK Market
Research Research Teleservices
-------- -------- ------------
Three months ended December 31, 2003:
-------------------------------------
Revenues $ 6,391 $ 5,957 $ 4,427
Goodwill impairment charge (6,000) - (10,000)
Operating income (loss) (8,228) 546 (9,043)
Interest and other non-operating
expenses, net
Loss before provision for income
taxes and cumulative effect of
accounting change
Three months ended December 31, 2002:
-------------------------------------
Revenues $ 8,239 $ 5,226 $ 3,198
Goodwill impairment charge (5,938) - -
Operating income (loss) (6,5 456
Interest and other non-operating
expenses, net
Loss before provision for income
taxes and cumulative effect of
accounting change
Year ended December 31, 2003:
-----------------------------
Revenues $ 25,788 $ 20,487 $ 14,868
Goodwill impairment charge (6,000) - (10,000)
Operating income (loss) (10,757) 1,167 (7,973)
Interest and other non-operating
expenses, net
Loss before provision for income
taxes and cumulative effect of
accounting change
Year ended December 31, 2002:
-----------------------------
Revenues $ 33,008 $ 18,988 $ 15,596
Goodwill impairment charge (5,938) - -
Operating income (loss) (9,059) ,408
Interest and other non-operating
expenses, net
Loss before provision for income
taxes and cumulative effect of
accounting change
Social Total
Research Segments Other Consolidated
-------- --------- ------ ------------
Three months ended
December 31, 2003:
-------------------
Revenues $ 28,452 $ 45,227 $ 818 $ 46,045
Goodwill
impairment
charge - (16,000) (317) (16,317)
Operating income
(loss) 2,862 (13,863) (283) (14,146)
Interest and other non-
operating expenses, net 1,443
Loss before provision for
income taxes and cumulative
effect of accounting change $ (15,589)
Three months ended
December 31, 2002:
-------------------
Revenues $ 28,360 $ 45,023 $ (332) $ 44,691
Goodwill
impairment
charge - (5,938) - (5,938)
Operating income
(loss) 2,363 (3,570) 61 (3,509)
Interest and other non-
operating expenses, net 1,208
Loss before provision for
income taxes and cumulative
effect of accounting change $ (4,717)
Year ended
December 31, 2003:
-------------------
Revenues $ 115,591 $176,734 $2,823 $ 179,557
Goodwill
impairment
charge - (16,000) (317) (16,317)
Operating income
(loss) 12,158 (5,405) (,111)
Interest and other non-
operating expenses, net 4,996
Loss before provision for
income taxes and cumulative
effect of accounting change $ (11,107)
Year ended
December 31, 2002:
-------------------
Revenues $ 105,464 $173,056 $2,204 $ 175,260
Goodwill
impairment
charge - (5,938) - (5,938)
Operating income
(loss) 10,266 4,219 66 4,285
Interest and other non-
operating expenses, net 4,784
Loss before provision for
income taxes and cumulative
effect of accounting change $ (499)
CONTACT: Opinion Research Corp.
Douglas L. Cox,
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