EX-99.1 3 c80300exv99w1.txt PRESS RELEASE FOR IMMEDIATE RELEASE EXHIBIT 99.1 INFORMATION RESOURCES, INC. ANNOUNCES THIRD QUARTER 2003 RESULTS, PROVIDES FOURTH QUARTER & FULL YEAR GUIDANCE CHICAGO, October 22, 2003 -- Information Resources, Inc. (NASDAQ:IRIC) today reported results for the third quarter 2003. THIRD QUARTER 2003 RESULTS For the quarter ended September 30, 2003, IRI reported a net loss of $0.1 million or $.00 per share compared to net income of $0.9 million or $.03 per share for the third quarter of 2002. Results for the 2003 third quarter include severance-related restructuring charges of $0.7 million, transaction costs of $1.6 million related to Gingko Acquisition Corp.'s tender offer for all of the outstanding shares of IRI common stock, and the write-down of certain international data costs of $0.8 million. Third quarter consolidated revenues of $136.0 million were 3% lower than prior year. U.S. revenues of $94.8 million were 9% below the same period last year, reflecting the previously announced decision of Procter & Gamble (P&G) to not renew its U.S. contract with IRI beginning with the third quarter. International revenues of $41.3 million were 13% higher than prior year or 2% higher in local currencies. "IRI's third quarter earnings reflect the full impact of the loss of the Procter & Gamble business. However, our ongoing efforts to reduce expenses in both the U.S. and Europe and improved performance in Germany have helped offset the margin impact of the lost P&G business," said IRI Chairman and CEO Joe Durrett. YEAR-TO-DATE 2003 RESULTS For the nine months ended September 30, 2003, the Company reported near breakeven results. This compares to a net loss of $8.2 million or $.28 per share for the same period last year. Year-to-date 2003 results include severance-related restructuring charges of $3.0 million, transaction costs related to the proposed tender offer for IRI of $2.3 million, and one-time charges related to the write-down of certain data-related assets of $2.0 million. Year 2002 results include restructuring charges of $7.2 million and a charge of $7.1 million due to a change in the accounting treatment for goodwill. Consolidated revenues of $416.1 million for the nine months ended September 30, 2003 were 1% higher than prior year. U.S. revenues of $296.6 million were 4% lower than the same period last year while International revenues of $119.5 million were 14% higher than prior year, but 1% lower in local currencies. IRI ANNOUNCES THIRD QUARTER 2003 RESULTS October 22, 2003 PAGE 2 THIRD QUARTER 2003 U.S. OPERATING RESULTS For the third quarter 2003, IRI's U.S. business reported operating profit of $4.1 million on revenue of $94.8 million. This compares to operating profit of $5.2 million on revenue of $104.2 million for the third quarter of 2002. Most of the revenue decline of $9.4 million, or 9%, was due to the loss of the P&G business, which became effective with the third quarter of 2003. The impact of this loss was felt in both Retail Tracking, which represents 73% of U.S. revenue, and Panel and Analytics, which represents 22% of U.S. revenue. Compared with third quarter a year ago, Retail Tracking declined by 6% while Panel and Analytics declined by 13%. However, U.S. expenses were reduced by 8% versus prior year, partially offsetting the revenue decline. IRI continues to aggressively manage expenses across the business through outsourcing and process and technology improvements. Excluding the impact of P&G, IRI's U.S. Retail Tracking revenue grew 1% for the quarter. As of the end of the third quarter 2003, 17 of IRI's top 25 U.S. Retail Tracking clients are under contract through 2004 or beyond and 7 have committed to IRI and are in the final stages of negotiation for new multi-year agreements. Panel and Analytics reported a 4% decline in revenue excluding the impact of P&G, primarily the result of decreased demand for IRI's proprietary BehaviorScan testing service. The other principal components of Panel and Analytics, syndicated and custom household panels and modeling, continue to perform well. THIRD QUARTER 2003 INTERNATIONAL OPERATING RESULTS For the third quarter 2003, IRI's International operations reported an operating loss of $0.4 million on revenue of $41.3 million. This result includes the write-down of $0.8 million of certain data-related costs. For the third quarter of 2002, the Company reported an operating loss of $2.0 million on revenue of $36.4 million. The improved performance versus 2002 is driven by a combination of increased revenue and lower expenses. In local currency, revenue grew 2% versus prior year, while expenses declined 2%. Improvements in the German business account for much of the overall improvement in International results. While IRI continues to lose money in Germany, those losses have been reduced as the Company stabilizes its operations and begins to rebuild lost revenue. In IRI's other European markets, revenue growth continues to be a challenge; however, cost reduction actions taken earlier this year have helped enhance European profitability. THIRD QUARTER 2003 CORPORATE EXPENSES Corporate expenses for the third quarter ended September 30, 2003 were $2.7 million, including $1.6 million of transaction costs related to the pending tender offer for all of the outstanding shares of IRI common stock. IRI ANNOUNCES THIRD QUARTER 2003 RESULTS October 22, 2003 PAGE 3 FOURTH QUARTER GUIDANCE AND FULL YEAR 2003 OUTLOOK IRI expects 2003 fourth quarter earnings per share to be similar to the third quarter and in the range of $.00 to $.02. Fourth quarter guidance assumes no restructuring or other significant one-time charges and $0.5 million of transaction expenses related to the pending tender offer. For the full year, the Company expects to report earnings before interest and taxes of $1.0 million to $2.0 million and earnings per share of $.00 to $.02. This includes severance- related restructuring charges of $3.0 million, transaction costs related to the proposed tender offer of $2.8 million, and the write-down of certain data-related assets of $2.0 million. TENDER OFFER Information Resources, Inc. has entered into a definitive agreement to be acquired by a newly formed corporation owned by Symphony Technology II-A, L.P., a leading investor in enterprise software and related business services, and Tennenbaum & Co., LLC, a private investment firm. For more information on the tender offer, visit the IRI web site at www.infores.com/public/global/investors/ or contact MacKenzie Partners, Inc., the Information Agent for the transaction, at (800) 322-2885. ABOUT IRI Information Resources, Inc. is a leading provider of UPC, scanner- and panel-based business solutions to the consumer packaged goods (CPG) and healthcare industries, offering services in the U.S., Europe and other international markets. The Company supplies CPG and pharmaceutical manufacturers, retailers, and brokers with information and analysis critical to their sales, marketing, and supply chain operations. IRI provides services designed to deliver value through an enhanced understanding of the consumer to a majority of the Fortune 500 companies in the CPG industry. More information is available at www.infores.com. FORWARD LOOKING STATEMENTS Certain matters discussed above are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in reports and other documents filed by the Company with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year 2002. Detailed results to follow. IRI ANNOUNCES THIRD QUARTER 2003 RESULTS October 22, 2003 PAGE 4 INFORMATION RESOURCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED OPERATING RESULTS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Revenues $ 136,029 $ 140,561 $ 416,061 $ 413,512 Costs and expenses Operating expenses (122,854) (127,190) (377,708) (373,321) Selling, general & administrative expenses (12,214) (11,931) (34,560) (34,938) Special charges, net (727) -- (2,999) (7,152) --------- --------- --------- --------- Operating income (loss) 234 1,440 794 (1,899) Equity in earnings (losses) of affiliated companies (10) 246 (118) 512 Minority interest (expense) benefit (3) -- 61 395 Interest expense and other, net (383) (195) (794) (395) --------- --------- --------- --------- Income (loss) before income taxes (162) 1,491 (57) (1,387) Income tax (expense) benefit 71 (641) 25 239 --------- --------- --------- --------- Income (loss) before cumulative effect of accounting change (91) 850 (32) (1,148) Cumulative effect of accounting change -- impairment of goodwill -- -- -- (7,065) --------- --------- --------- --------- Net income (loss) $ (91) $ 850 $ (32) $ (8,213) ========= ========= ========= ========= Net income (loss) per common share before cumulative effect of accounting change -- basic $ -- $ .03 $ -- $ (.04) ========= ========= ========= ========= Net income (loss) per common share -- basic $ -- $ .03 $ -- $ (.28) ========= ========= ========= ========= Net income (loss) per common and common equivalent share before cumulative effect of accounting change -- diluted $ -- $ .03 $ -- $ (.04) ========= ========= ========= ========= Net income (loss) per common and common equivalent share -- diluted $ -- $ .03 $ -- $ (.28) ========= ========= ========= ========= Weighted average common shares -- basic 30,272 29,579 29,969 29,534 ========= ========= ========= ========= Weighted average common and common equivalent shares -- diluted 30,272 29,920 29,969 29,534 ========= ========= ========= =========
Additional results follow. IRI ANNOUNCES THIRD QUARTER 2003 RESULTS October 22, 2003 PAGE 5 INFORMATION RESOURCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (IN THOUSANDS)
SEPTEMBER 30, 2003 DECEMBER 31, 2002 ------------------ ----------------- (UNAUDITED) ASSETS Cash and cash equivalents $ 14,122 $ 8,968 Accounts receivable, net 67,924 85,453 Prepaid expenses and other 12,848 15,801 -------- -------- Total Current Assets 94,894 110,222 Property and equipment, net 51,726 63,379 Other assets, including investments 193,838 185,596 -------- -------- Total Assets $340,458 $359,197 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 3,367 $ 3,639 Accounts payable and accrued expenses 84,199 100,332 Deferred revenue 29,934 36,247 -------- -------- Total Current Liabilities 117,500 140,218 Long-term debt 2,180 4,495 Other liabilities 9,831 10,812 Stockholders' Equity 210,947 203,672 -------- -------- Total Liabilities and Stockholders' Equity $340,458 $359,197 ======== ========
Additional results follow. IRI ANNOUNCES THIRD QUARTER 2003 RESULTS October 22, 2003 PAGE 6 INFORMATION RESOURCES, INC. AND SUBSIDIARIES REVENUE AND OPERATING RESULTS SUMMARY (UNAUDITED) (IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------------------- --------------------------- 2003 2002 2003 2002 --------- --------- --------- --------- REVENUE U.S. Services $ 94,779 $ 104,202 $ 296,593 $ 309,009 International Services 41,250 36,359 119,468 104,503 --------- --------- --------- --------- Total Revenues $ 136,029 $ 140,561 $ 416,061 $ 413,512 ========= ========= ========= ========= OPERATING RESULTS* U.S. Services $ 4,088 $ 5,221 $ 14,132 $ 17,762 International Services (403) (2,020) (4,993) (7,659) Corporate expenses (2,737) (1,515) (5,403) (3,943) --------- --------- --------- --------- Operating results before special charges, net 948 1,686 3,736 6,160 Special charges, net (727) -- (2,999) (7,152) --------- --------- --------- --------- Total Operating Results $ 221 $ 1,686 $ 737 $ (992) ========= ========= ========= =========
* Includes equity in earnings of affiliated companies and minority interests; excludes interest and other, net, cumulative effect of accounting change and income taxes. For further information, please contact: Andrew G. Balbirer, Executive Vice President and Chief Financial Officer Mary K. Sinclair, Corporate Controller Kristin V. Van, Vice President Corporate Communications Information Resources, Inc., 150 North Clinton Street Chicago, Illinois 60661, (312) 726-1221