News notes
Total Research Corporation, Princeton, N.J., announced the signing of a letter of intent with GfK, a Nuremberg, Germany-based market research company, for the proposed sale of Total’s 51 percent interest in its Romtec-GfK joint venture to GfK. Total Research acquired its interest in the Romtec-GfK joint venture in its May 2000 acquisition of Romtec plc, a U.K.-based IT and telecommunications market research company. Pursuant to the letter of intent, Total’s share of Romtec-GfK would be sold to GfK for $2.160 million, which is approximately 1.55 times the joint venture’s fiscal 2000 revenues and approximately 22.5 times Total’s share of its fiscal 2000 net income. The joint venture generated revenues of approximately $1.395 million and net income of approximately $188,000 in fiscal 2000. The proposed sale is subject to the execution of a definitive agreement and other customary conditions.
Research firm Millward Brown has announced a move to distribute its interactive intelligence throughout the company. Interactive tools that were previously available primarily through its San Francisco office will be available to all clients out of all offices across North America. Millward Brown IntelliQuest will continue to maintain a team of custom interactive research specialists in its New York office. This team will serve as both internal consultants to the rest of Millward Brown and as external consultants to marketers with complex interactive needs. Additionally, the Austin, Texas, office of Millward Brown IntelliQuest becomes the integrated production center for North American interactive operations.
Separately, responding to recent corrections in the technology market, Millward Brown has made adjustments to streamline its interactive and high-technology marketing research groups. The firm has rolled its interactive group (Millward Brown Interactive) into its Austin-based technology marketing research goup, and closed its San Francisco office on June 1. In addition, Millward Brown IntelliQuest has reduced its workforce by 13 employees.
Hormel Foods Corporation has agreed to renew its contract with Schaumburg, Ill.-based ACNielsen U.S. Under the new five-year contract, Hormel Foods will continue to use the ACNielsen SCANTRACK syndicated retail measurement service for product sales information, as well as the ACNielsen Homescan consumer panel for consumer insights.
Canadian research software developer Itracks announced that its online qualitative division hosted 74 percent more online focus groups in March 2001 than in the same month last year.
With the passing of company founder John Elrod 13 months ago having not been widely reported, the staff at Sigma Validation, Fort Lee, N.J., wish it to be known that the company is moving forward and is continuing the work Elrod began in 1978 with duplicate number validation, which uncovers potentially data-corrupting issues in consumer research studies such as interviews that involve professional respondents, false or fabricated interviews, and/or unmet screening requirements.
ACNielsen Entertainment will use its proprietary ReelResearch Intemet-based system to provide realtime audience information for the CBS television network and other Viacom television companies at the new CBS Television City research center at the MGM Grand Hotel in Las Vegas. ACNielsen Entertainment will outfit Television City with the ReelResearch online system to survey visitors about their entertainment and lifestyle interests and habits. In addition to providing real-time audience feedback and demographics for CBS, the ReelResearch system will be used to conduct research for other Viacom entertainment properties.
Venture capital units of Ford Motor Co. and Nokia Corp. joined an $8 million investment in Cincinnati-based Intelliseek, an application service provider and developer of software for analyzing consumer word-ofmouth and other market influences. Ford’s Venture Capital Group and Nokia Venture Partners provided undisclosed funding, bringing the total raised by the four-year-old company to $14 million so it may more aggressively market its technology for automating data searches and aggregation across the Internet, intranets and extranets.
Acquisitions
The Arbor Strategy Group, an Ann Arbor, Mich., consulting firm, has acquired the New Products Showcase & Learning Center, a collection of more than 65,000 consumer products. ASG has relocated the collection to Ann Arbor and renamed it NewProductWorks (NPW). NPW is an interactive environment for new product information, stimulus, and solutions.
Total Research Corporation, Princeton, N.J., has expanded its European operations through the acquisition of Teligen Ltd. Teligen, a U.K market research and consultancy company located in Richmond, Surrey, specializes in the telecommunications marketplace.
Istanbul-based ProCon GfK, the Turkish subsidiary of Nuremberg, Germany-based GfK Group, has signed an agreement for the takeover of market research organization IBS Marketing Research Services. IBS brings sales of around EUR 800,000 to ProCon GfK. Following the acquisition of IBS, the GfK subsidiary will be the second largest provider of ad hoc research services in Turkey. Overall, ProCon GfK ranks fourth in the market research sector in Turkey.
MindBranch, Inc., a North Adams, Mass., research and business information firm, has acquired Intelligex, a New York company that matches buyers and suppliers of custom research in an online marketplace.
Alliances/strategic partnerships
Toronto-based data management firm Generation 5 has announced a strategic partnership with Orange, Calif.-based SRC, LLC. Under the terms of the license, Generation 5 will add Canadian content to two SRC products Allocate and Solocast for exclusive distribution in Canada.
Engage, Inc., an Andover, Mass., enterprise marketing software and interactive media company, has formed an agreement with Millward Brown IntelliQuest under which Engage will offer its customers Millward Brown IntelliQuest’s BrandImpact research solution - a study giving online advertisers the ability to test banners, rich media and streaming ads with the same metrics that offline advertisers use to assess brand awareness, brand image, brand consideration and ad diagnostics.
ESRI, a Redlands, Calif.-based geographic information system software firm, has joined the American Public Transportation Association (APTA) as a business member. APTA business members include private businesses that supply products and services to the transit industry.
San Francisco-based Alchemedia, a provider of security software to prevent the duplication and misuse of proprietary information, has formed a strategic partnership with Chicago-based SPSS MR. SPSS MR will resell Alchemedia’s Clever Content software as its security offering alongside its Web survey software.
Rochester, N.Y., research firm Harris Interactive has reached an agreement with Tarrytown, N.Y.-based Mediconsult.com Inc.’s Physicians’ Online (POL) to conduct research utilizing Physician’s Online’s Web-based community of more than 215,000 U.S. physicians.
Marketing services firm Access Worldwide Communications, Inc. has renewed a one-year agreement with ACNielsen U.S. for multicultural research services. Access Worldwide’s Cultural Access Group will support the expanded ACNielsen Homescan LA Hispanic Panel, a research program that gains insights about the purchasing behavior of the Hispanic market. Access Worldwide provides a variety of research services for the ACNielsen Panel including: recruitment of new panel participants; hiring, training and support of field representatives; development of recruitment materials; and evaluation of key panel recruitment measures.
Association/organization news
The China Market Research Organization has been formed. Its offices are located at Room 601, Building C, No. 2 Fu Xing Road, HaiDian Dist., Beijing, 100038, China.
The boards of directors of the Marketing Research Association and the Qualitative Research Consultants Association have formed a strategic alliance to use the resources of both organizations for the common good of qualitative research. A six-member task force representing the boards of both associations will coordinate a plan of action focused on strategic issues related to information dissemination, joint communication, professional competence, image enhancement, and strategic planning. The first joint project will be the presentation of a qualitative "super session" during the annual MRA conference in New York in June.
New accounts/projects
SurveyUSA, a Verona, N.J., polling firm, has added WBBM-TV to the list of media clients using its flat-fee research services.
New companies/new locations
Modalis Research Technologies, San Francisco, has expanded its operations in the Chicago area. The main office is now located at 1718 Sherman Ave., Suite 310, Evanston, Ill., 60201.
Wilton, Conn.-based Greenfield Online has moved to new headquarters at 21 River Road in Wilton.
Terry Kaufman Research Initiatives, Topeka, Kan., has opened an office in La Jolla, Calif.
Chicago software firm SPSS Inc. has launched the SPSS Enabling Technologies Division, based in Miami, which will partner with software vendors and other fro-as to develop analytical solutions.
Company earnings reports
Westport, Conn.-based health care information firm IMS Health announced diluted earnings per share of $0.19 for the quarter ended March 31, up 19 percent. Net income gew 14 percent, to $55.9 million, while revenue rose 20 percent constant dollar and 15 percent on a reported basis to $329.6 million, compared with the year-earlier period. All results are reported on a pro-forma basis, exclud-ing Erisco Managed Care Technologies, Synavant, other nonstrategic software businesses and onetime gains and charges.
SPSS Inc., Chicago, has announced results for the first quarter of 2001. On a pro forma basis, excluding acquisition-related and other nonrecurring charges, but including the full implementation of recent accounting interpretations on revenue recognition, diluted earnings per share and revenues for the quarter ended March 31 were $0.03 and $44.1 million, respectively. These results compare with pro forma earnings and revenue figures of $0.20 and $48.1 million, respectively, for the same period last year. On a reported basis, diluted loss per share and revenues for the quarter ended March 31 were ($0.77) and $36.5 million, respectively. These reported results include acquisition related and other nonrecurring charges as well as the effects of the prescribed implementation of the recent accounting interpretations, which shows the deferral of revenues related to annual and other time-based licenses from only the fourth quarter forward rather than the entirety of the previous year.
Arbitron Inc., New York, announced results for the first quarter ended March 31. Arbitron" was separated from Ceridian Corporation through a reverse spin-off on March 30, and began trading independently on the New York Stock Exchange on April 2. The company reported revenues of $60.2 million, an increase of 8.4 percent over revenues of $55.5 million for the first quarter of 2000. Earnings before interest and taxes (EBIT) for the quarter were $27.3 million, compared to $24.3 million for the first quarter of 2000, a 12.2 percent increase. Net income for the quarter was $16.3 million, compared with $14.7 million reported during the same period of 2000, an increase of 10.8 percent. Pro forma net income per share was $0.56 (basic and diluted), compared with $0.51 per share in 2000, a 9.8 percent increase. Pro forma net income per share has been adjusted to reflect the one-for-five reverse split, which became effective following Arbitron’s reverse spin-off from Ceridian. Arbitron reported EBITDA of $28.4 million for the first quarter, an 11.7 percent increase over EBITDA of $25.4 million reported in 2000.
St. Petersburg, Fla.-based Catalina Marketing Corporation reported results for its fourth quarter and fiscal year period ended March 31. Revenue for the quarter grew 21 percent to $113.4 million, compared to $93.7 million in the prior year fourth quarter. Net income for the quarter totaled $14.5 million, or $0.25 per diluted share, compared to $14.4 million, or $0.25 cents per diluted share, for the prior year period.
The company’s research operations, consisting of Alliance Research and the recently acquired Market Intelligence, posted a revenue increase of approximately 45 percent over the comparable prior year period. Earnings for the research operations were equal to approximately $0.01 per company common diluted share this quarter. For the fiscal year, the research operations contributed approximately $0.02 per company common diluted share.
Rochester, N.Y.-based Harris Interactive has announced financial results for the fiscal 2001 third quarter ending March 31. The company also announced a consolidation and costsavings program designed to offset the impact of the current economic slowdown and allow the company to meet its objective of achieving positive cash earnings by the end of calendar 2001.
The company reported fiscal 2001 third quarter revenue (including revenue from the Yankelovich custom research group acquired effective February 1) of $15.8 million, an 11 percent increase compared with $14.2 million in the third quarter of fiscal 2000. Internet revenue represented $7.5 million or 47 percent of total fiscal 2001 third quarter revenue, as compared to $6.5 million or 46 percent in the fiscal 2000 third quarter. Net loss was $0.17 per share ($5.9 million), flat when compared to the third quarter of fiscal 2000.
Harris Interactive has stepped up its cost-cutting program that includes a reduction in its national workforce by approximately 70 employees or 12 percent of its full-time professional employees. After payment of severance during the fourth quarter, annualized cost savings associated with these reductions will be approximately $4.5 million. Additionally, the company plans to consolidate office space, reduce database development costs, and scale telephone center operations consistent with current demand. When fully implemented, the employee reduction and office consolidation program is expected to reduce the company’s cost base by approximately $10 to $12 million. Management expects this process to be completed within six months.
Princeton, N.J.-based OpinionResearch Corporation reported record revenues and net income for the first quarter of 2001. For the quarter, revenues were $46 million, an increase of 18 percent compared to first quarter 2000 revenues of $39 million. Net income for the first quarter increased to $1.1 million, an increase of 36 percent compared to first quarter 2000 net income of $784,000. Operating income for the quarter was $3.4 million, an increase of 21 percent compared to $2.8 million last year. Diluted earnings per share for the first quarter were $.18, an increase of 12 percent compared to diluted earnings per share of $.16 for the first quarter in 2000. Diluted EPS in the current quarter is based on a 22 percent increase in shares over the comparable period last year due primarily to common equity issued in the third quarter of 2000. For the first quarter, EBITDA was $5.4 million, an increase of 21 percent compared to $4.5 million in last year’s first quarter. Cash earnings per share (net income plus goodwill amortization expense after-tax) for the first quarter were $.28, an increase of 12 percent compared to $.25 last year.
For the quarter ended March 31, Information Resources, Inc. (IRI), Chicago, reported breakeven net income and earnings per share before restructuring and other charges. This compares to a net loss, before restructuring and other charges, of $1.5 million or ($0.05) per diluted share for the first quarter of 2000. Including the impact of restructuring and other charges, IRI reported a net loss of $2.5 million or ($0.09) per diluted share compared to a loss of $3.6 million, or ($0.12) per diluted share for last year’s first quarter.
Revenues of $136.3 million were 6 percent better than prior year first quarter and were a record first quarter for INI. U.S. revenues were $103.3 million, an increase of 5 percent versus prior year. International revenue of $33.0 million was 7 percent better than last year, but 14 percent better in local currencies. Operating income before restructuring and other charges improved by $3.6 million, from a loss of $2.1 million last year, to income of $1.5 million in the first quarter of 2001.