News notes
Austin, Texas-based Catapult Systems has reached an agreement to merge with BSI Consulting of Houston. The new organization will operate as Catapult Systems and will continue to provide custom application development and software integration.
The Interpublic Group of Companies, Inc. has completed the sale of its NFO research unit to Taylor Nelson Sofres. At closing, Taylor Nelson Sofres paid Interpublic approximately $400 million in cash, plus an additional payment for NFO’s net cash on hand at closing, together with 11,688,218 ordinary shares of Taylor Nelson Sofres. At the closing date of July 10, these shares had an aggregate market value of approximately $35.6 million.
Interpublic has agreed to certain restrictions on the sale of the stock consideration received from Taylor Nelson Sofres until March 2004. Interpublic will also receive an additional $10 million of cash payable approximately one year after the closing date, subject to the market price per Taylor Nelson Sofres ordinary share continuing to exceed 146 pence during a specified averaging period.
As a result of the sale of NFO, Interpublic expects to realize an accounting gain in the third quarter of 2003 of approximately $100 million, subject to various closing adjustments.
Harris Interactive, Rochester, N.Y., has announced a new organizational structure designed to support continued growth, and has begun its search to strengthen its senior management team. The company has engaged an executive search firm to identify potential candidates for the position of CEO.
New York-based Marketing Evaluations, Inc./The Q Scores Company celebrates its 40th anniversary this year.
In September, Gingko Acquisition Corp. and Chicago-based Information Resources, Inc. (IRI) announced that Gingko has commenced a new tender offer for all the outstanding shares of IR_I for $3.30 in cash for each IRJ share plus a registered and tradable contingent value right (CVR), pursuant to a new definitive merger agreement. This transaction is fully financed and the tender offer has no financing conditions. The new offer was unanimously approved by IRI’s board of directors. Gingko and IRI have also terminated their previous merger agreement, and Gingko has terminated its prior tender offer. The CVR entitles IRI shareholders to share in the proceeds, if any, from the antitrust suit pending against ACNielsen, The Dun & Bradstreet Corp. and IMS International.
Acquisitions
Frank Muller has acquired company shares in Muller Goldfarb Consultants previously held by Goldfarb Consultants, Toronto, and has changed the Hamburg, Germanybased company’s name to Muller Market Insight.
New York-based FIND/SVP Inc. has announced the closing of the previously announced acquisition of Teltech, the U.S.-based information management division of Sopheon plc, a provider of product lifecycle management software and services. The value of the transaction included an upfront purchase price of $3,050,000, funded through a combination of equity, subordinated debt and available cash, and a contingent earn-out payment of up to a maximum of $400,000. Teltech, based in Minneapolis, is a provider of custom research and information services focusing on the research and development and engineering departments of larger corporations. Teltech’s revenue for the trailing 12 months ended May 31 were approximately $8.4 million and adjusted EBITDA (after confirmed cost synergies to take effect at or close to the time of closing) was approximately $1.1 million.
Nashville-based 20/20 Research, Inc. has agreed to acquire QualTalk.com, a provider of online
qualitative bulletin board software and consulting. QualTalk’s online services will retain the QualTalk brand name and will continue to be based in Castle Rock, Colo. The administrative offices will be at the 20/20 Research headquarters in Nashville. The key QualTalk personnel will be Ted Kendall, vice president of software and consulting, and Rachael Guess, vice president of online logistics services.
Germany-based GfK Group has acquired a 51 percent stake in V2, a Blue Bell, Pa., pharmaceutical market research firm. With a staffof59 fulltime employees, the company generated sales of approximately $24.7 million in 2002. The company will trade under the name V2 GIN, LLC. The acquisition is another step in GfK’s process of creating a health care division.
Millward Brown has acquired Dutch market research agency Centrum voor Marketing Analyses. Centrum has previously been a Millward Brown licensee. Founded "in 1964, Centrum employs over 100 people full-time at its Amsterdam office. The firm will change its name to Millward Brown/Centrum. The existing structure and local management personnel of Millward Brown/Centrum will remain in place.
TNS has acquired Data Advanced Research, enabling TNS to extend its reach into Guatemala, E1 Salvador, Costa Rica, Panama, Honduras and Nicaragua. Data Advanced Research, which employs a staff of 50, will be renamed TNS Data. Under the agreement TNS Data’s consumer panel will also become part of the Latinpanel network, a consumer panel in LatinAmerica jointly owned by TNS, the NPD Group, Inc. and the IBOPE group.
New York-based NetRatings, Inc. has acquired NetCrawling S.A., the developer and marketer of LemonAd, a European online advertising monitoring service. Financial terms of the transaction were not disclosed. To be branded Nielsen//NetRatings LemonAd, the service provides online advertising intelligence for 11 European markets.
Ailiances/strategic partnerships
ESRI Business Information Solutions Redlands, Calif., will use Acxiom Corporation’s aggregated household-level data in Community, a neighborhood consumer segmentation system.
Walker Information, Indianapolis, has added four research firms to its global network: Asia-based Acorn Marketing & Research Consultants, India-based AMRB L.L.C., Chile-based ICCOM, and Poland-based SMG/KRC.
MRB Hellas has been named as Millward Brown’s licensee in Greece.
Invoke Solutions Tenafly, N.J., will provide Millward Brown access to its Dynamic Survey product.
Canada-based data collection firm Interactive Tracking Systems Inc. (Itracks) and telecommunications firm SaskTel have announced a strategic partnership that will allow Itracks to expand its call center capacity. SaskTel will be providing CAD $1.75 million to Itracks for the expansion and further development of its call center in Saskatoon andits CATI service through a convertible security.
Greenfield Online, Inc., Wilton, Conn., has entered into a multi-year agreement with research firm ORC International under which Greenfield Online will handle ORC International’s online research data collection needs.
Portsmouth, Va., research firm Borrell Associates Inc. has developed a strategic alliance with Scarborough Research, New York, to deliver a series of reports on local media. The reports, focusing on the $97 billion local media market, examine areas of revenue growth and strategies for local Web sites.
Association/organization news
As an outcome of its respondent cooperation workshops, the Council for Marketing and Opinion Research (CMOR) created a task force to delve into interviewer satisfaction and motivation. The task force created a study to better understand how research interviewers view their contribution to the research process and what factors are related to their level of satisfaction in their current positions. This report details the results of the study, including information on job benefits, incentives, likelihood to stay in the industry and demographics. Volunteers from ISA completed 450 interviews and provided tabulation, and OPINIONation prepared the report.
The U.K-based Association for Qualitative Research (AQR) has launched a benefits package for its members, including dedicated employment insurance coverage, preferential hotel rates and a health insurance plan. Separately, the AQR has added an online directory of research terms and definitions to its Web site at www.aqr.org.uk.
Awards
On-Line Communications, Inc., a Van Nuys, Calif. research firm, announced that two of its members brought home awards from the Marketing Research Association’s (MRA) 2003 annual conference. Company President Peggy O’Connor was awarded the MRA Chapter Service Award for her contributions to the Southwest Chapter. Vice President of Sales Edward Sugar took home the MRAAward Of Excellence, which recognizes excellence in service to the Association and !ocal chapters during the past year.
Gordon S. Black, chairman and CEO of Harris Interactive, Rochester, N.Y., was named the 2003 Ernst & Young Upstate New York Entrepreneur of the Year. Black was chosen as the winner in the business services category for his efforts in the online market research industry as well as for building Harris Interactive into a global market research enterprise. Black will now move on in the Entrepreneur of the Year national competition, the winners of which will be named in Palm Springs, Calif., in November. Ernst & Young’s Entrepreneur of the Year program was established to recognize and help motivate individuals demonstrating the highest levels of entrepreneurial endeavor. The program was founded in Milwaukee in 1986. In 2003, it will include 44 regional programs.
ACNielsen U.S. has been selected as one of the best places to work in information technology by IDG’s Computerworld. The selection is part of the weekly IT newspaper’s 10th annual Best Places to Work in IT survey, which was published in the June 9 issue and online at www.computerworld.com.
The U.K. office of Opinion Research Corporation, Princeton, N.J., has received an Excellence in Market Research award from U.K.-based Marketing magazine. The award recognizes the strategic modeling and analytics project the company conducted for the Nationwide Building Society, one of the U.K.’s largest mortgage lenders and retail banking organizations.
TNS and Northcliffe Newspapers, a U.K. regional newspaper publisher, were awarded Marketing magazine’s Media Research Award 2003. Northcliffe Newspapers selected TNS Media, the U.K. division of TNS specializing in media research, to carry out a project to provide insight into how its newspapers are read. The aim of the project was to maximize readership, increase reader satigfaction and identify ways to better engage readers. The survey was rolled out over 18 months, involving nine regional evening newspapers and 12,000 readers.
Customer Interaction Solutions magazine has named Advanced Data-Comm, Dubuque, Iowa, one of the Top 50 Outbound Teleservices Agencies in the United States for 2002. The Top 50 rating is awarded in
recognition of outstanding achievement in the teleservices industry including company growth, call traftic in minutes, services offered and available technology resources. The 2002 honor marks the 12th consecutive year Advanced Data-Comm has received this award.
New accounts/projects
Choice Hotels International, Inc. has selected Denver-based Cohorts to help enhance Choice Privileges, the company’s rewards program for guests at its Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion and MainStay Suites hotel brands.
Reston, Va.-based comScore Networks announced the signing of a long-term client contract for the use of comScore services that provides for payment by the unnamed client of more than $18 million over five years. In addition, the company reported that it attained its first quarter of corporate profitability.
BMRB Social Research has won a study in the U.K. looking at the public’s perception of the standards of conduct required of those in public life. The research involves a CAPI survey of 1,000 adults in Britain, with fieldwork taking place later this year and the fmal report being published early in 2004.
Nielsen Media Research has reached multi-year agreements with various television operations of Viacom, Inc. for TV audience measurement services involving all Viacom and CBS television businesses. Included in the agreements are 35 Viacom owned-and-operated television stations across 28 markets; CBS and UPN Television Networks; syndicators King World and Paramount; and 12 cable networks- BET, CMT, Comedy Channel, MTV, MTV2, Nickelodeon/Nick at Nite, Noggin, VH1, Showtime, TV Land, SPIKE TV and The Movie Channel.
Carlsbad, Calif.-based Island Data Corp. has signed Yahoo! Inc., as a new customer utilizing its Insight RT product. Yahoo! chose Insight RT to perform real,time analysis to take action on incoming unstructured verbatim customer feedback received on its site. Insight RT captures customer feedback from a variety of sources including customer service and support tracking applications, e-mails, surveys and Web self-service interactions. The solution analyzes the thematic content and intent of the feedback, converting it into customer insights.
U.K.-based Aegis Media plc has signed a deal with TNS to use TNS’s television audience analysis system, InfoSysTV. The agreement runs until December 2006.
New companies/new divisions/relocations/expansions
The July/August issue contained incorrect information on Bonnie Sargent’s new firm, Field Research Services. The firm is located at 842 Raymond Ave., Suite 105, St Paul, Minn., 55114.
Singapore-based Research Pacific Group has opened Research Pacific Japan.
The Ipsos Group has integrated its two Chicago offices into one-new downtown office located at 111 North Canal St. The new 21,000-squarefoot office will house 60 research and operations staff from the company’s Ipsos-Insight marketing research division, the Ipsos-Public Affairs opinion research division, as well Ipsos-ASI.
Mike Page and Kenneth Elliott have co-founded Cognicient, a Chicago-area research f’u-m, at 105 East Vallette, #1170, Elmhurst, Ill., 60126.
Vista Research Services has moved to 434 W. Briar Place, #4, Chicago, Ill,, 60657. Vista Research provides data processing services using SPSS MR’s Quantum software.
Opinion Research Corporation has moved its Princeton offices to a new location at 600 College Road East, Princeton, N.J., 08540-6636.
Thomas Tseng and David Morse have left Cultural Access Group to start New American Dimensions, a research firm located at 6955 La Tijera Boulevard, Suite B, Los Angeles, Calif., 90045.
U.K.-based customer insight and marketing specialist dunnhumby has opened its first office in the United States as part of a partnership with grocery firm The K_roger Co.
Asia Insight Research Consultants Pte. Ltd. has moved to 150 Beach Road, #33-08, Gateway West, Singapore 189720. Phone and fax numbers remain the same.
Company earnings reports
Harris Interactive, Rochester, N.Y., released its financial results for the fiscal fourth quarter and for the full fiscal year ended June 30. Revenue for the quarter was $35.7 million, up 11 percent versus $32.1 million of revenue for the fiscal third quarter and up 20 percent from $29.8 million of revenue reported for the same period a year ago. Revenue for the full fiscal year was $130.6 million, up over 30 percent from the $100.0 million revenue posted for fiscal year 2002.
Net income for the fiscal fourth quarter was $5.5 million, or $0.10 per share. This includes an income tax benefit of $3.0 million or $0.05 cents per share. Therefore pre-tax income was $2.5 million, or $0.05 per share, which is essentially the same as reported for the fiscal third quarter, and up significantly compared to net income of $0.2 million ($0.00 per share) reported for the fourth quarter of fiscal 2002.
For the full fiscal year ended June 30, net income was $11.1 million or $0.20 per share on a fully diluted basis, including the $3.0 million, or $0.05 per share tax benefit. Pre-tax earnings were $8.2 million or $0,15 per share, compared to a loss of $14.8 million, or ($0.32 per share) reported for fiscal year 2002.
For the second quarter 2003 ended June 30, Arbitron Inc., New York, reported revenue of $61.4 million, an increase of 8.7 percent over revenue of $56.5 million during the second quarter of 2002. Net income for the quarter was $8.0 million, compared with $6.6 mi!lion for the second quarter of 2002. Earnings before interest and taxes (EBIT) for the quarter were $16.1 million, compared with EBIT of $15.0 million during the comparable period last year.
Costs and expenses for the second quarter increased by 8.8 percent, from $44.8 million in 2002 to $48.8 million in 2003. Interest expense for the quarter declined 26.2 percent, from $4.3 million in 2002 to $3.2 million in 2003, due to reductions in debt between the two periods.
Net income per share for the second quarter 2003 increased to $0.26 (diluted), compared with $0.22 (diluted) during the comparable period last year. In the second quarter 2003, Arbitron reduced its long-term debt by $20.0 million to $135.0 million.
For the six months ended June 30, 2003, revenue was $132.8 million, an increase of 8.5 percent over the same period last year. Net income for the six months was $24.1 million or $0.80 per share (diluted), compared with $20.9 million or $0.70 per share (diluted) last year. EBIT was $46.0 million, compared to $42.6 million in 2002.
IMS Health, Fairfield, Conn., reported second-quarter diluted earnings per share of $0.23 on an SECreported basis, compared with $0.21 in the year-earlier period, and $0.25 per share on an adjusted basis, versus $0.23 in the second quarter of 2002.
Revenue for the quarter ended June 30 grew to $337.8 million. Revenue for the 2003 second quarter totaled $337.8 million, up 11 percent on a reported basis. When calculated on a constant-dollar basis, which eliminates the impact of year-over-year foreign exchange fluctuations, quarterly revenue grew 3 percent from the second quarter of 2002. Operating income was $97.3 million, compared with $94.3 million in the year-earlier quarter, up 3 percent. On an SEC-reported basis, net income for the quarter totaled $55.4 million, compared with $62.0 million in the year-earlier quarter, an 11 percent decline. Adjusted net income totaled $60.4 million, compared with $66.1 million in the 2002 second quarter, a 9 percent decline. Excluding Cognizant Technology Solutions (CTS) results from the year-earlier quarter, adjusted net income from continuing operations was flat. Earnings per share on a diluted basis were $0.23, up 10 percent over the second quarter of 2002. Adjusted diluted earnings per share of $0.25 in the 2003 second quarter increased 9 percent over the year-earlier quarter.
New York-based NetRatings, Inc. announced financial results for the second quarter ended June 30. Revenues for the second quarter were $10.2 million, a 40 percent increase over revenues of $7.3 million in the second quarter of 2002, and a 13 percent increase over first quarter 2003 revenues of $9.0 million. In accordance with generally accepted accounting principles (GAAP), net loss for the second quarter was $6.1 million, or ($0.18) per share, on approximately 33.7 million shares. This compares with a net loss of $6.5 million, or ($0.20) per share, in the second quarter of 2002, on approximately 32.6 million shares.
For the quarter ended June 30, Chicago-based Information Resources, Inc. reported a net loss of $.2 million or ($0.01) per share. This compares to net income of $.3 million or $0.01 per share for the same period last year. Second quarter results for 2003 include special charges relating to a previously announced reduction in headcount of $2.3 million pre-tax or $0.05 per share compared to special charges relating to restructuring of $1.9 million pre-tax or $0.04 per share in the prior year.
Consolidated revenue of $142.4 million was 2 percent higher than prior year. U.S. revenue was $101.7 million, 3 percent lower than last year, primarily as a result of a 4 percent decline in the retail tracking business, which comprises about 70 percent of the U.S. business. The U.S. panel and analytics business continued to grow, up 6 percent over the second quarter of 2002. International revenue of $40.7 million was 16 percent higher than the second quarter of 2002 in U.S. dollar terms, but 2 percent lower in local currencies.
VNU reported its interim financial statement for the first six months of 2003. The firm’s marketing information group, which includes ACNielsen, achieved 5 percent organic growth in total revenues in the first half of 2003. However, as a result of the weak U.S.. dollar, the group’s reported total revenues decreased by 10 percent to EUR 889 million from EUR 989 million in 2002. ACNielsen’s organic revenue growth amounted to 6 percent.
The group’s operating income decreased by 26 percent to EUR 70 million from EUR 95 million, mainly due to the impact of the devalued U.S. dollar. Income growth was also negatively impacted by product development costs and start-up expenses for the Procter & Gamble contract, which commenced in July 2003, as well as an increase in pension costs. In addition, ACNielsen decided to develop a new version of its Internet-based category management system - Category Business planner - that will include significant enhancements over the current version. A decision was made to recognize a write-off of the capitalized software costs of the existing application in the amount ofEUR 8 million. As a result of the above mentioned items, the operating margin of the group in the first half of 2003 was 7.9 percent (compared with 9.6 percent in 2002).
In the Americas region, the group realized an increase in organic total revenues of more than 5 percent, driven by strong performances in the United States, Canada and Latin America. Organic revenue growth in Europe/Emerging Markets and in Asia Pacific amounted to 5 percent and 2 percent, respectively. In Europe, operating efficiency was further improved as progress was made on the development of a shared service center to streamline transaction accounting and processing.
The VNU marketing information group continued to explore strategic options for two units in Europe - ACNielsen’s Customized Research services and Claritas Europe - including possible sale of the businesses.
Organic revenue growth amounted to 4 percent in the first half of 2003, largely driven by the performance of Nielsen Media Research in the United States. However, reported total revenues of this group decreased by 12 percent to EUR 464 million from EU 529 million due to the weakness of the U.S. dollar.
Nielsen Media Research in the United States grew its organic revenues by 9 percent in the first half of 2003, due to continued demand for its TV ratings and related services. Revenues and operating income declined slightly for Nielsen Media Research International due to overall softness in the global advertising economy.
Results of NetRatings, VNU’s 65 percent-owned Internet measurement business, improved significantly. Revenues grew at a doubledigit rate, reflecting increased demand and improved business conditions, while operating income improved as a result of greater operating efficiencies and a favorable comparison with 2002, when the company recorded one-time charges totaling EUR 13 million related to restructuring measures and a settlement of patent litigation with Jupiter Media Metrix.
Paris-based Ipsos reported revenues for the first half of 2003 of 264.3 million euros, an 8.1 percent increase over the same period in 2002. Growth was driven by three factors. First is the strongly negative exchange rate effects arising from the conversion into euros of Ipsos’ revenues in the U.K., North and South America, Asia and the Middle East. On the basis of the exchange rates observed during the first half of 2002, Ipsos’ revenues would have risen 23 percent to 301 million euros. Thus exchange rate effects reduced revenues by 15 percent in the first half of 2003. Second is the contribution from companies newly integrated within the scope of consolidation, mostly in the second half of 2002, which generated 13 percent revenue growth. Third is the strong organic growth of 10.1 percent, which was higher than for the market as a whole and for other
international research groups.
In the second quarter of 2003, New York research firm FIND/SVP reported revenues of $7,063,000, a 35.2 percent improvement compared to revenues of $5,226,000 in the same period in the prior year. The net loss in the second qu.arter was $104,000 versus a net loss of $186,000, or ($0.02) per share, one year earlier. For the three months ended June 30, the reported net loss attributable to common shareholders’ was $251,000 or ($0.02) per share. This is the result of the accretion on redeemable common shares of $147,000 for the three months ended June 30. Adjusted EBITDA in the quarter was $468,000; adjusted EBITDA for the same period in 2002 was $105,000.
For the six-month period, the company reported revenues of $12,165,000, representing an 18.5 percent improvement compared to $10,270,000 in the same period in the prior year. The net loss for the period was $59,000 versus a net loss of $659,000, or ($0.07) per share, in the same period last year. For the six months ended June 30, the reported net loss attributable to common shareholders’ was $206,000 or ($0.02) per share. This is the result of the accretion on redeemable common shares of $147,000 for the six months ended June 30. Adjusted EBITDA for the period was $905,000, compared to ($4,000) in the first half of 2002. The reported results for the three- and six-month periods ended June 30 include the effect of the April 1 acquisition of Guideline Research Corporation.