Guideline, Inc. (Formerly FIND/SVP, Inc.) Reports Strong First Half and Second Quarter Financial Results
15 August 2006
Guideline, Inc. (formerly FIND/SVP, Inc.) (OTC Bulletin Board: GDLN), the nation's only single-source provider of custom business research, today announced financial results for the first half and second quarter ended June 30, 2006.
Revenues for the first half of 2006 were $23,218,000, an increase of 15% versus revenues of $20,115,000 in the prior year. Net income attributable to common shareholders for the first half was $568,000 or $0.03 per basic and fully diluted share as compared to a loss of ($536,000), or ($0.03) per basic and fully diluted share in the first half of the prior year.
EBITDA* for the first half was $1,646,000, a significant increase compared to EBITDA of $284,000 in the prior year. Operating income for the first half also increased significantly to $848,000 compared to an operating loss of ($269,000) in the prior year. EBITDA exclusive of non-cash stock compensation expense for the first half was $1,958,000, a significant increase compared to $626,000 in the first half of the prior year.
On an adjusted basis (please see attached financial tables), EBITDA exclusive of non-cash stock compensation expense for the first half of 2006 was $2,379,000, representing a 41% increase over reported Adjusted EBITDA* for the first half of 2005 of $1,692,000.
Revenues in the second quarter of 2006 were $11,962,000, an increase of 6% versus revenues of $11,329,000 in the prior year. Net income attributable to common shareholders for the second quarter was $354,000 or $0.02 per basic and fully diluted share as compared to a loss of ($577,000), or ($0.03) per basic and fully diluted share in the second quarter of the prior year.
EBITDA for the quarter was $889,000, a significant increase compared to EBITDA of ($163,000) in the prior year. Operating income of $575,000 for the quarter significantly improved compared to an operating loss of ($482,000) in the prior year. EBITDA exclusive of non-cash stock compensation expense for the quarter was $1,048,000, a significant increase compared to $41,000 in the second quarter of the prior year.
On an adjusted basis (please see attached financial tables), EBITDA exclusive of non-cash stock compensation expense for the second quarter of 2006 was $1,244,000, representing a 16% increase over reported Adjusted EBITDA for the second quarter of 2005 of $1,071,000.
As of June 30, 2006, Guideline, Inc. had cash on hand of $1,319,000, short and long term debt of $2,505,000 and $2,887,000, respectively, and shareholders' equity of $22,095,000. Cash flow from operations for the six months ended June 30, 2006 was $883,000.
David Walke, Chairman and CEO of Guideline, Inc., said, "I am very pleased with Guideline's strong second quarter and first half of 2006. Revenue and profitability are up significantly on both a sequential and year-over-year basis in addition to positive cash flow from operations. Our enhanced sales strategy yielded several successes during the quarter through increased cross- selling efforts. Existing and new clients are taking advantage of the depth of our suite of services as we see contributions across our various businesses. We also continue to develop new products that will expand our service continuum and satisfy clients' additional research needs."
Mr. Walke noted that on a sequential quarter-to-quarter basis, revenues increased 6.3%, EBITDA increased 17.6%, and net income attributable to common shareholders increased 65.4%. "This represents perhaps the best indication of the improved progress of our organic growth efforts," Mr. Walke said. "Furthermore, we exceeded our internal EBITDA performance plan in the first half, and are optimistic for further improvement in the second half of the year which is traditionally stronger than the first half due to seasonal factors."
Mr. Walke concluded by saying that "Guideline's acquisition program remains active as we continue to explore opportunities that will expand Guideline's presence in complementary business research arenas. We are positioned to achieve a strong second half of the year with continued success."
* We believe EBITDA and Adjusted EBITDA, which are defined as net income (loss) before interest, income taxes, and depreciation and amortization and net income (loss) before interest, income taxes, and depreciation and amortization and other non-recurring charges, respectively, are useful measures to investors, allowing them to focus on our recurring results of operations, and are common alternatives to measuring operating performance used by investors and financial analysts to measure value, cash flow and performance. Also, our credit facility, which contains a term note totaling $4,500,000, maturing in 2010, and a revolving loan facility totaling $4,500,000, includes financial and other covenants which are based on or refer to EBITDA and Adjusted EBITDA. The non-GAAP financial measures described above should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Pursuant to the requirements of Regulation G, Guideline has provided reconciliations in the attached financial information for the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Earnings Conference Call Information
Management will host a conference call today at 2:30 PM ET to review the first half and second quarter financial results. The dial-in number for the conference call is 866-406-5369 for domestic participants. Please reference the conference ID number: 7650888. A taped replay of the conference call will also be available beginning approximately one hour after the call's conclusion and will remain available for 7 days. It can be accessed by dialing 877-519- 4471, using the passcode 7650888. To access the live and/or archived webcast of the call, please go http://www.guideline.com.
About Guideline, Inc.
Guideline, Inc. (OTC Bulletin Board: GDLN) is the nation's only single- source provider of customized business research and analysis. Through its end-to-end continuum of On-Demand Business Research, Custom Market Research, Strategic Intelligence, and Product Development Intelligence. Guideline's research analysts create integrated solutions that enable clients to make informed decisions to address their critical business needs. Guideline specializes in nearly all major industries, including media and entertainment, healthcare and pharmaceuticals, financial and business services and consumer products. Guideline, Inc. is located at 625 Avenue of the Americas, New York, N.Y. 10011. More information is available by calling 212-645-4500 or visiting http://www.guideline.com.
Forward-Looking Statements
Note: This news release contains "forward-looking statements" within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding the outlook for the Company's markets and the demand for its products and services, earnings per share, future cash flows from operations, future revenues and margin requirement and expansion, the success of new products and services introductions, growth in costs and expenses and the impact of acquisitions, divestitures, restructurings and other unusual items, including the Company's ability to integrate and obtain the anticipated results and synergies from its acquisitions. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Company's periodic and other reports filed with the Securities and Exchange Commission.
Investor Contact: Press Contact:
Stacey Fisher Lorne Fisher
305-335-9577 954-258-1786
sfisher@fish-consulting.com lfisher@fish-consulting.com
GUIDELINE, INC. COMPARATIVE STATEMENTS OF INCOME (LOSS)
(unaudited)
Six Months Ended
June 30
2006 2005
Revenue $23,218,000 $20,115,000
Operating income (loss) $848,000 ($269,000)
EBITDA 1, 2,3 $1,646,000 $284,000
Adjusted EBITDA 1,2,3 $2,067,000 $1,350,000
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change $540,000 ($448,000)
Income tax provision ($48,000) ($68,000)
Cumulative effect of accounting change 4 $96,000 $--
Net income (loss) $588,000 ($516,000)
Income (Loss) attributable to common
shareholders' 5 $568,000 ($536,000)
Income (Loss) Per Share - Basic & Diluted $0.03 ($0.03)
Weighted Average Shares
Outstanding - Basic and Diluted 20,677,922 19,787,331
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (unaudited):
1 EBITDA and Adjusted EBITDA (000's omitted) for the six months ended June
30, 2006 is as follows:
Net income $588
Tax provision 48
Depreciation and amortization 795
Interest expense 311
Cumulative effect of accounting change (96)
EBITDA $1,646
Nonrecurring rent and other facility charges 132
Name change related expenses 148
Nonrecurring severance 39
Other 102
Adjusted EBITDA $2,067
2 EBITDA and Adjusted EBITDA (000's omitted) for the six months ended
June 30, 2005 is as follows:
Net loss $(516)
Tax provision 68
Depreciation and amortization 617
Interest expense 115
EBITDA $284
Nonrecurring severance 909
Acquisition related integration costs 109
Sarbanes-Oxley 404 implementation fees 50
Other (2)
Adjusted EBITDA $1,350
3 EBITDA and Adjusted EBITDA for the six months ended June 30, 2006, were
$1,958,000 and $2,379,000, respectively, exclusive of $312,000 of non-
cash stock compensation expense, and for the six months ended June 30,
2005 EBITDA and Adjusted EBITDA were $626,000 and $1,692,000,
respectively, exclusive of $342,000 of non-cash stock compensation
expense.
4 During the first quarter of 2006, Guideline adopted the revised
Statement of Financial Accounting Standards No. 123, "Share-Based
Payments" ("SFAS 123 (R)"). As a result of adopting SFAS 123(R),
Guideline recognized a before and after-tax gain of approximately
$96,000 representing the cumulative effect of a change in accounting
principle attributable to the requirement under SFAS 123(R) to estimate
forfeitures at the grant date instead of recognizing them as incurred.
5 Net income for the six months ended June 30, 2006 of $588,000 was
reduced by preferred dividends of $20,000, resulting in net income
attributable to common shareholders of $568,000.
GUIDELINE, INC. COMPARATIVE STATEMENTS OF INCOME (LOSS)
(unaudited)
Three Months Ended
June 30
2006 2005
Revenue $11,962,000 $11,329,000
Operating income (loss) $575,000 ($482,000)
EBITDA 1, 2,3 $889,000 ($163,000)
Adjusted EBITDA 1,2,3 $1,085,000 $867,000
Income (Loss) Before Income Taxes $400,000 ($624,000)
Income tax (provision) benefit ($36,000) $57,000
Net income (loss) $364,000 ($567,000)
Income (Loss) attributable to
common shareholders' 4 $354,000 ($577,000)
Income (Loss) Per Share - Basic & Diluted $0.02 ($0.03)
Weighted Average Shares
Outstanding - Basic and Diluted 20,905,842 20,168,505
Reconciliation of Net Income (Loss) to
EBITDA and Adjusted EBITDA (unaudited):
1 EBITDA and Adjusted EBITDA (000's omitted) for the three months ended
June 30, 2006 is as follows:
Net income $364
Tax provision 36
Depreciation and amortization 325
Interest expense 164
EBITDA $889
Nonrecurring rent and other facility charges 20
Name change related expenses 89
Nonrecurring severance 7
Other 80
Adjusted EBITDA $1,085
2 EBITDA and Adjusted EBITDA (000's omitted) for the three months ended
June 30, 2005 is as follows:
Net loss $(567)
Tax benefit (57)
Depreciation and amortization 350
Interest expense 111
EBITDA $(163)
Nonrecurring severance 775
Acquisition related integration costs 103
Sarbanes-Oxley 404 implementation fees 50
Other 102
Adjusted EBITDA $867
3 EBITDA and Adjusted EBITDA for the quarter ended June 30, 2006, were
$1,048,000 and $1,244,000, respectively, exclusive of $159,000 of non-
cash stock compensation expense, and EBITDA and Adjusted EBITDA for the
quarter ended June 30, 2005 were $41,000 and $1,071,000, respectively,
exclusive of $204,000 of non-cash stock compensation expense.
4 Net income for the three months ended June 30, 2006 of $364,000 was
reduced by preferred dividends of $10,000, resulting in net income
attributable to common shareholders of $354,000.
GUIDELINE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30 December 31
2006 2005
(unaudited)
Assets
Cash and cash equivalents $1,319,000 $2,697,000
Accounts receivable, net 10,465,000 8,646,000
Deferred tax assets 349,000 386,000
Prepaid expenses and other current assets 651,000 671,000
Total Current Assets 12,784,000 12,400,000
Property, Plant & Equipment, net 2,433,000 2,572,000
Goodwill, net 19,295,000 18,245,000
Intangibles, net 2,347,000 2,522,000
Deferred tax assets 1,057,000 987,000
Deferred financing fees, net 570,000 647,000
Other assets 738,000 834,000
Total assets $39,224,000 $38,207,000
Liabilities and Shareholders' Equity
Trade accounts payable $2,668,000 $2,425,000
Accrued expenses and other 2,148,000 2,378,000
Unearned retainer income 5,754,000 4,311,000
Current maturities of notes payable 2,505,000 3,005,000
Total current liabilities 13,075,000 12,119,000
Notes payable 2,887,000 3,389,000
Deferred compensation and other liabilities 537,000 761,000
Total liabilities 16,499,000 16,269,000
Redeemable, convertible, preferred stock 630,000 610,000
Shareholders' Equity 22,095,000 21,328,000
Total Liabilities and Shareholders' Equity $39,224,000 $38,207,000
Source: prnewswire
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