News notes
Chicago-based Peryam & Kroll Research Corporation has changed its name to P&K Research.
San Diego-based WebSideStory, Inc., a provider of digital marketing applications, has filed a patent infringement lawsuit against NetRatings, Inc., in the U.S. District Court for the Southern District of California. WebSideStory alleges that NetRatings infringes WebSideStory’s patent rights. “We believe this action is necessary to protect the intellectual capital we have worked hard to develop in-house since 1996,” said Jeff Lunsford, chairman and CEO of WebSideStory, in a company statement. “Although we have been focused on innovation and building value for our customers, we cannot ignore companies that we believe are infringing our intellectual property.” In its complaint against NetRatings, WebSideStory is seeking unspecified monetary damages and an injunction against further infringement by NetRatings.
In February, Netherlands-based VNU announced it had entered into a settlement of the 1996 antitrust litigation brought by Information Resources, Inc. (IRI) against Dun and Bradstreet, ACNielsen and IMS Health. The settlement will result in a complete dismissal of all claims in the case. The case was on appeal following the entry of judgment in favor of defendants. Under the settlement agreement, VNU has agreed to a payment of $55 million, which, after tax, will result in a EUR 28 million charge to 2005 earnings. The company noted that the dismissal of IRI’s claims will also terminate the Amended Indemnity and Joint Defense Agreement (JDA) among the defendants and thereby give VNU the flexibility to implement certain changes to its group structures that would have otherwise been limited under the JDA. These changes are expected to benefit VNU’s earnings in future years.
In a company statement, Rob van den Bergh, chief executive officer of VNU, said, “We are pleased to have finally concluded this decade-old lawsuit. While we believe that the appellate court would have affirmed the dismissal of IRI’s meritless case, it was in our company’s best interest to resolve this matter and eliminate any further litigation uncertainty and expense. We have always maintained that the competition between ACNielsen and IRI belongs in the marketplace and not in the courtroom.”
Separately, VNU announced in February that it continues to be in active talks with a private-equity consortium over a proposed buyout of the company, and that its supervisory and executive boards expected to provide their view on the non-binding offer by the end of February. In connection with the discussions, the private-equity group has been conducting due diligence of the company. VNU announced on January 16, 2006 that it had received a non-binding proposal to purchase the company for EUR 28.00 to 28.50 per common share from the private-equity consortium consisting of AlpInvest Partners, the Blackstone Group, the Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co., Permira Advisers Ltd., and Thomas H. Lee Partners.
Simmons Research, Fort Lauderdale, Fla., announced that its flagship survey, the National Consumer Study (NCS), has been awarded accreditation by the Media Rating Council (MRC), an association that audits and accredits measurement services meeting the MRC’s minimum standards. Having been accredited by the MRC board of directors, the Simmons NCS is now authorized to show the MRC Double-Check logo on its National Consumer Study.
Formed in 1964, at the urging of the United States Congress, the MRC strives to secure, for the industry and related users, measurement services that are valid, reliable and effective. The MRC pursues this goal through setting the minimum standards for media rating research, auditing measurement services who voluntarily submit to the MRC process, and accrediting those services that meet the MRC’s minimum standards and that fully disclose their methodology to the MRC and service subscribers.
New York-based Arbitron Inc. announced that another phase of the independent audit of the Portable People Meter (PPM) radio and television ratings system has been delivered to the Media Rating Council. The audit was designed by the MRC to authenticate and illuminate the procedures used in the PPM ratings system. Ernst and Young conducted the audit on behalf of the MRC.
Norway-based research company FIRM announced its placement towards institutional and private investors of 1,770,000 shares at the price of NOK 17.00. The placement represents 9.99 percent of shares outstanding before the placement. Gross proceeds from the share issue amount to NOK 30,090,000. The new share issue was subscribed 2.7 times. The purpose of the placement is to establish increased strategic and operational flexibility. The board exercised the authority granted to it under the company’s annual general meeting held on November 1, 2005. Total outstanding shares after the issue are 19,484,445 shares, nominal value NOK 0.175.
Acquisitions/transactions
Research company Schlesinger Associates has acquired the Research House Ltd., a U.K. research firm with facilities in London’s West End and in the suburbs of Wimbledon Village.
Cunningham Research Group, Inc., Ormond Beach, Fla., has acquired MRCGroup’s Preview Studio Venetian Canale Shoppes in Las Vegas and has placed it under the TestAmerica Division.
Germany-based GfK Group increased its shareholding in the Swiss pharmaceutical market research company Research Matters from 33 percent to 66 percent. Separately, as part of the integration of NOP World’s U.S. subsidiaries, Audits & Surveys has been incorporated into the Retail and Technology division.
Paris-based research firm Ipsos has acquired Camelford Graham, a Toronto-based company founded in 1988 by Jennifer Camelford and Brenda Graham which now has 28 full-time employees. Both Camelford and Graham will continue to lead the newly formed company, Ipsos Camelford Graham.
Milwaukee-based Market Probe, Inc. has acquired St. Louis research firm Marketing Horizons, Inc. Earl Wims, co-founder of Marketing Horizons, retired from the company in December. Robert Jasper, co-founder of Marketing Horizons, has assumed the title of senior vice president of Market Probe and will continue to oversee the day-to-day management of operations of Marketing Horizons. Marketing Horizons, Inc. will retain its name, adding “a division of Market Probe, Inc.”
Service Intelligence, Inc., a Suwanee, Ga., provider of employee performance assessments through mystery shops and site evaluations, has been acquired by Charlotte, N.C.-based Global Compliance Services.
Alliances/strategic partnerships
The GfK Group, Cypriot company MEMRB and Avinoam Brog, owner of the Israeli market research company Market Watch founded a joint venture in Israel. GfK has a 63.8 percent stake in the company, which will operate under the name GfK Retail and Technology Israel in future. As part of the retail and technology division, the company provides sales information on technical consumer goods in Israel.
Fifty-Plus.net International Inc., which owns a portfolio of Internet media operating as The 50Plus Group, and Decima Research, a Canadian research firm, have partnered to develop market research insights and services for marketers interested in consumers aged 50 and over. Under the terms of the multi-year agreement: the 50Plus Group’s entire audience will be invited to join Decima’s EVOX online research panel; Decima is establishing a 50-plus specialty practice to direct the development of these syndicated products and offer custom research studies to current and future Decima clients; Decima and the 50Plus Group will collaborate on the design of a series of syndicated studies of consumer behavior and attitudes in this segment.
Association/organization news
The British Market Research Association (BMRA) on February 21 announced a vote in favor of proposals to integrate BMRA services into the Market Research Society (MRS), with effect from April 2006 (at which point the BMRA will cease to exist). The vote follows an extensive consultation process involving both the BMRA and MRS councils. Following initial approval by both councils in December 2005, the decision was put to a BMRA membership vote, with the motion being carried by a majority of 29 votes (62 out of 95 voting members in favor).
Ivor Stocker, chairman of the BMRA, said: “We have been in discussions with the MRS over possible integration of services for several years - with the aim of providing one unified body to coordinate the U.K. market research sector and better serve the needs of our industry. The BMRA and MRS has long shared the remit of providing professional development opportunities to their members, and through this integration, our members will continue to benefit from the BMRA’s gold standard services as well as accessing those offered by the MRS.
“The proposal agreed by our members fully retains the culture and enthusiasm of the BMRA while conferring additional benefits which MRS, with its established brand and infrastructure and larger scale of operation, is well-placed to deliver. This move provides an opportunity to bring together individuals and companies from across the market research industry to share best practice and help drive the industry forward into a new era.”
Awards/rankings
Winston-Salem, N.C.-based AllPoints Research, Inc. has been awarded certification as a Women’s BusinesEnterprise by the Women’s Business Enterprise Council. AllPoints Research, owned by Tara Olson and Sherrie Aycock, meets the requirements for certification under the criteria and guidelines established by the Women’s Business Enterprise National Council: 51 percent ownership by a woman or women (AllPoints is 100-percent woman-owned); proof of effective management of the business (operating position, bylaws, hire-fire and other decision-making role); control of the business as evidenced by signature role on loans, leases and contracts; U.S. citizenship or resident alien status.
New accounts/projects
Simmons Research, Fort Lauderdale, Fla., has signed a deal to provide NBC Universal with Television BehaviorGraphics, Simmons’ behavior targeting technology.
Arbitron Inc., New York, announced that Philadelphia ad agencies Harmelin Media, Mayo Seitz Media and the Star Group have signed an agreement for Arbitron’s Portable People Meter (PPM) ratings service when it is deployed in that market. In addition, Beasley Broadcast Group, Inc. has entered into a multi-year agreement for Arbitron’s radio ratings services that includes Portable People Meter audience measurement services when deployed in Philadelphia. MPG, the media buying and planning unit of marketing communications company Havas, has signed a contract to use the Portable People Meter radio audience estimates. The agreement covers the U.S.-based radio planning and buying activities of Havas companies including MPG and MPG Diversity. Zenith Optimedia, Starcom MediaVest Group and MediaCom have also signed on to use the PPM service.
New York-based TNS Media Intelligence announced that the Interpublic Group of Companies has renewed its partnership with TNS MI as its primary provider for competitive advertising intelligence.
The BI Norwegian School of Management has renewed its licensing of the Confirmit research software from Norway-based FIRM.
U.K. research firm ESA has been retained by retailer Marks & Spencer to assess head-office telephone customer service for 2006. The study will focus on the M&S switchboard and take the form of mystery telephone calls.
San Francisco-based MarketTools, Inc., announced that its self-service survey solution, Zoomerang, has been selected as the official survey partner of online publisher MarketingProfs.com.
Techneos Systems Inc., a Vancouver-based survey software firm, and the Canadian Sport Tourism Alliance have extended their agreement to use Techneos’s Entryware software to collect primary data on-site at selected sporting events across Canada.
Seattle research firm QuestionPro has been selected by the online unit of grocer Safeway to power its customer satisfaction surveys.
New companies/new divisions/relocations/expansions
Vancouver, B.C.-based NRG Research Group has opened offices in Calgary and Edmonton.
Research firm Advitek has moved to new, larger offices and expanded its call center. The new address is 235 Yorkland Boulevard, Suite 301, Toronto, ON, M2J 4Y8. The main phone number remains 416-756-2867.
Seattle-based Global Market Insite, Inc. has opened a new office in the Netherlands at Zuiderkruis 13, 5215 MV ‘s Hertogenbosch. Leon de Koning, managing director for Northern Europe, will head the new location.
Australia-based Pulse Group, a research process outsourcing supplier, has opened a new international operations center in Cyberjaya, Malaysia to cover the Asia-Pacific market.
Germany-based GfK Group has established a new GfK HealthCare branch in Thailand.
Company earnings reports
In full-year 2005 results, Paris-based Ipsos generated consolidated revenues of EUR 717.8 million, up 18.7 percent relative to 2004. This performance can be attributed to three factors. Organic growth was 8.6 percent for the full year, and 9.3 percent for the fourth quarter alone. For the first time since 2001, the currency effect was positive due to the appreciation of the U.S. and Canadian dollars and the currencies of Latin America against the euro. The positive effect was 1.8 percent. Changes in the scope of consolidation also had a positive effect of 8.4 percent, reflecting the consolidation of Descarie & Complices (Montreal) and Shifrin Research (New York) in January 2005, GDMR (Canton) on April 1, Napoleon Franco (Colombia) on July 1, MORI (UK) in October and Understanding UnLtd. (Cincinnati) in November.
For its fiscal second quarter 2006, ended December 31, 2005, Harris Interactive, Rochester, N.Y., reported revenue of $54.8 million, up 4 percent when compared with $52.6 million of revenue reported for the same period a year ago. U.S. revenue was $43.7 million, up 12 percent from the $39.0 million of revenue reported a year ago. European revenue was $11.2 million, down 15 percent from the $13.1 million of revenue reported for the second fiscal quarter of 2005. European revenue was negatively impacted by the continued erosion of the traditional research business, lower than expected Internet revenue growth and $0.8 million of unfavorable foreign exchange rate differences. Global Internet revenue for the second fiscal quarter of 2006 was $32.4 million, up 26 percent from Internet revenue of $25.7 million reported for the same period a year ago. U.S. second fiscal quarter 2006 Internet revenue was $29.2 million, up 26 percent when compared to $23.1 million in the second fiscal quarter of 2005. European Internet revenue for the second fiscal quarter of 2006 was $3.2 million, up 21 percent from the $2.6 million of Internet revenue reported for the same quarter last year. Internet revenue comprised 59 percent of total revenue, 67 percent of the U.S. revenue and 28 percent of the European revenue for the second fiscal quarter of 2006.
Operating income for the second fiscal quarter of 2006, which included $0.7 million of non-cash stock-based compensation expense, was $4.0 million, or 7.2 percent of revenue, up 68 percent when compared to operating income of $2.4 million, or 4.5 percent of revenue, for the same period a year ago. Second fiscal quarter 2005 did not include any stock-based compensation expense, but did include one-time pre-tax severance costs of $0.8 million.
Net income for the second fiscal quarter of 2006 was $2.4 million, or $0.04 per diluted share, up 66 percent when compared with net income of $1.4 million, or $0.02 per diluted share for the same period a year ago.
Norway-based FIRM reported revenue increased in the fourth quarter 2005 by 39 percent compared to the corresponding quarter in 2004. FIRM achieved revenue of $6.263 million in Q4 2005 compared to $4.513 million in the corresponding quarter of 2004. Operating result (EBIT) for Q4 2005 was $917,000 compared to $774,000 for the corresponding quarter in 2004. A one-off charge of $250,000 in listing costs has been charged in the fourth quarter. Profit before tax for Q4 2005 was $923,0000 compared to $623,000 in Q4 2004. Accumulated revenue for 2005 amounted to $17.297 million compared to $13.024 million in 2004, a growth of 33 percent. Operating result (EBIT) for 2005 was $915,000 compared to $696,000 in 2004.
Greenfield Online, Inc., Wilton, Conn., reported financial results for the fourth quarter and full year ended December 31, 2005. Net revenue totaled $24.5 million for the fourth quarter of 2005 as compared with $13.6 million for the same period a year ago and $23.1 million in the third quarter of 2005. Net revenue from Ciao, the company’s European subsidiary, totaled $9.1 million, including $3.6 million in revenue from the Ciao comparison shopping business.
Gross profit totaled $18.5 million or 75.4 percent of revenues for the fourth quarter of 2005, as compared with $10.0 million or 73.7 percent of revenues in the prior year period, and $16.4 million or 71.0 percent of revenue in the third quarter of 2005.
Operating losses were $88.6 million for the fourth quarter of 2005, including the impairment and restructuring charges described above. Excluding these charges, fourth-quarter 2005 operating income was $2.7 million or 11.1 percent of revenue, as compared to $2.5 million or 18.1 percent of revenue for the prior year period and $1.9 million or 8.0 percent of revenue in the third quarter, excluding the $1.0 million charge related to our management change, which we announced on September 29, 2005.
Net losses for the fourth quarter of 2005 were $88.7 million, as compared with net income of $2.4 million for the prior year period and net income of $1.6 million for the third quarter of 2005.
Cash flow from operations was $7.6 million for the fourth quarter of 2005 as compared to $3.3 million for the prior year period and $7.2 million in the third quarter of 2005.
For the fourth quarter of 2005, adjusted EBITDA, a non-GAAP financial measure, excluding the impairment and restructuring charges, was $5.7 million or 23.3 percent of revenues, as compared to $3.4 million or 25.0 percent of revenue for the prior year period and $4.6 million or 19.8 percent of revenue for the third quarter of 2005, excluding the $1.0 million charge related to the September 29th management change.
Operating free cash flow, a non-GAAP financial measure, was $5.4 million for the fourth quarter of 2005 as compared to $1.7 million for the prior year period and $4.8 million in the third quarter of 2005.
IMS Health, Fairfield, Conn., announced fourth-quarter diluted earnings per share on an SEC-reported basis of $0.38, up 19 percent, compared with $0.32 in the prior year. Fourth-quarter adjusted diluted earnings per share were $0.40, compared with $0.34 per share in the same period of 2004, an increase of 18 percent. Fourth-quarter 2005 revenues were $477.7 million, up 8 percent (12 percent constant dollar), compared with revenues of $443.7 million for the fourth quarter of 2004. Net income on an SEC-reported basis was $89.4 million, up 22 percent compared with net income of $73.6 million in the year-earlier quarter. On an adjusted basis, net income for the fourth quarter of 2005 was $94.1 million, up 19 percent, compared with net income of $79.2 million in the prior year.
For its fourth quarter and fiscal year ended December 31, 2005, Chicago-based SPSS Inc. reported record revenues of $62.2 million and diluted earnings per diluted share (EPS) of $0.30 for the fourth quarter of 2005, representing the highest single revenue quarter in its history. These results compare to revenues of $60.5 million and EPS of $0.20 in the fourth quarter of 2004. Operating income for the fourth quarter of 2005 increased to $8.6 million, or 14 percent of total revenues, from $3.7 million, or 6 percent of total revenues, in the same quarter last year.
Revenues for the 2005 fiscal year totaled $236.1 million with EPS of $0.85, compared to $224.1 million and $0.31, respectively, in 2004. New license revenues increased 12 percent to $107.6 million from $95.8 million in 2004. Operating income for the 2005 fiscal year reached $28.0 million, or 12 percent of total revenues, through the combination of record revenues and a 4 percent decrease in operating expenses resulting from widespread gains in productivity, cost management and more efficient revenue generation.
Cash totaled $84.4 million as of December 31, 2005, compared to $37.1 million at the end of the 2004 fiscal year. Net cash flow from operating activities in 2005 increased to $51.5 million from $12.3 million in 2004.
Forrester Research, Inc., Cambridge, Mass., reported fourth-quarter total revenues increased 9 percent to $41.2 million, compared with $38.0 million for the fourth quarter of 2004. On a GAAP-reported basis, which reflects an effective tax rate of 37 percent, Forrester reported net income of $3.6 million or $0.16 per diluted share, compared with net income of $3.5 million, or $0.16 per diluted share, for the same period in 2004.
On a pro forma basis, net income was $4.8 million or $0.22 per diluted share for the fourth quarter of 2005, which excludes amortization of $782,000 of acquisition-related intangible assets, non-cash stock-based compensation expense of $537,000, and net realized losses and impairments of non-marketable investments of $326,000, and reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $3.9 million, or $0.18 per diluted share, for the same period in 2004, which excludes amortization of $1.3 million of acquisition-related intangible assets, a reversal of reorganization costs of $355,000, and net marketable and non-marketable investment gains of $305,000, and reflects a pro forma effective tax rate of 35 percent.
For the full year 2005, total revenues increased 11 percent to $153.2 million, compared with $138.5 million for 2004. On a GAAP-reported basis, which reflects an effective tax rate of 41 percent, Forrester reported net income of $11.3 million, or $0.52 per diluted share for 2005, compared with net income of $4.1 million or $0.18 per diluted share for 2004.
On a pro forma basis, net income was $14.8 million or $0.68 per diluted share for 2005, which excludes amortization of $3.5 million of acquisition-related intangible assets, non-cash stock-based compensation expense of $1.6 million, net marketable and non-marketable investment gains and impairments of $1.7 million, and reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $12.8 million, or $0.57 per diluted share for the same period last year, which excludes amortization of $6.5 million of acquisition-related intangible assets, reorganization costs of $8.4 million primarily due to office space consolidations, and net marketable and non-marketable investment gains of $1.4 million, and reflects a pro forma effective tax rate of 35 percent.