-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MUMTWbkymfUq00cOWmDp+PmuRhhRusAgbEiMKdBr70wqLQkiFOtE3+u58ZQr+31H 1hLDQaVdG5OE4OYkmtDAJA== 0000930413-01-500160.txt : 20010409 0000930413-01-500160.hdr.sgml : 20010409 ACCESSION NUMBER: 0000930413-01-500160 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIND SVP INC CENTRAL INDEX KEY: 0000801338 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 132670985 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-75828 FILM NUMBER: 1590677 BUSINESS ADDRESS: STREET 1: 625 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2126454500 10-K 1 c20460-10k.txt ANNUAL REPORT 0. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------------------- [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____ Commission file no.0-15152 FIND/SVP, INC. ---------------------------------------------------------- (Exact name of Registrant as specified in its charter) New York 13-2670985 ----------------------- ------------------- (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification no.) 625 Avenue of the Americas, New York, NY 10011 - --------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (212) 645-4500 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.0001 per share Title of Class ****************************** Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------------------ ---------------- ------------------------------------------------------------- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. YES NO X ------------------ ---------------- ------------------------------------------------------------- As of March 1, 2001 the aggregate market value of the voting stock held by non-affiliates of the registrant was $3,069,032.00. As of March 1, 2001 there were 7,605,943 shares of Common Stock, par value $.0001 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Not applicable. 1 PART I ITEM 1 BUSINESS GENERAL FIND/SVP, Inc. ("FIND/SVP" or the "Company") provides broad consulting, advisory and business intelligence services substantially by telephone primarily to executives and other decision-making employees. The Company's strategy is to build a base of regular clients who will utilize the Company's people and resources for their research, business intelligence and information needs. The Company was formed under the laws of New York in 1969. In 1971, the Company became affiliated with SVP International S.A. ("SVP International") through a licensing agreement which gave the Company the right to the SVP name and provided access to the resources of what is currently 15 additional SVP affiliated companies located around the world. Through its Quick Consulting and Research Service ("QCS"), FIND/SVP provides retainer clients with access to the subject and technical expertise of its staff as well as the resources of a large information center. Within each retainer client's organization, specific individuals receive a Membership Card, which entitles them to make requests via the telephone and the Internet for consultation and research assistance. In response, the staff of QCS provides customized answers in rapid turnaround time, generally within two business days or less of the request. The QCS service is positioned to be an indispensable daily partner for decision-makers by providing, on a retainer basis, a cost-effective "quick consulting" service accessible by telephone or the Internet. The service is designed to be a valuable resource to small and medium sized corporations that do not maintain in-house information centers and as a supplement to in-house resource centers of large corporations. At December 31, 2000, there were 1,907 QCS retainer clients and 11,460 Membership Cardholders. The Company intends to seek to expand its base of QCS retainer clients, and to offer these clients an expanded array of business intelligence, research and advisory services. The Company's Live AnswerDesk offers immediate, on-demand, question answering and personal search assistance from live experts. It is designed as a way to enhance the loyalty of the members of various consumer groups. The Company also produces The Information Advisor newsletter. In addition to QCS, the Company offers the market research services of its Strategic Consulting and Research Group ("SCRG"), which is designed to handle more extensive, in-depth custom market research and competitive intelligence requests, as well as customer satisfaction and loyalty programs. The QCS and SCRG businesses represent the core competencies of the Company, which is to provide the expertise of its staff in an on-demand, consulting and business advisory relationship with small, medium and large sized corporations. FIND/SVP's research resources include access to approximately 4,000 computer databases and subscription-paid web sites, approximately 8,000 of its own files organized by subject and by company, current and back issues of approximately 1,500 periodicals and journals and approximately 5,000 books and reference works. Through a licensing agreement, the Company is associated with the international SVP network of companies and correspondents providing similar services. This enables FIND/SVP to obtain information through approximately 1,000 additional consultants in the SVP worldwide network. 2 SERVICES AND PRODUCTS The Company's services and products offer business executives fully integrated research, business intelligence and management advisory services in a broad range of industries and disciplines. The Company provides services to help clients acquire, interpret and use knowledge. FIND/SVP's research resources at December 31, 2000 include a staff of 85 consultants and researchers in its QCS and SCRG divisions, a reference center which contains approximately 8,000 of its own subject and company files, access to approximately 4,000 computer databases, current and back issues of approximately 1,500 titles, and approximately 5,000 books and reference works, and a field investigation team with entree into public and private libraries in the New York area. Through a licensing agreement, the Company is associated with the international SVP network of companies and correspondents, which enables it to obtain information worldwide. See "SVP Network; Licensing Agreement With SVP International." The materials used in the generation of the Company's services and products are updated and checked by staff members. The Company has its own training program in which its employees participate. SERVICES QUICK CONSULTING AND RESEARCH SERVICE ("QCS"). QCS provides clients with access to the staff and resources of a large information center, which seeks to handle research inquiries and requests for business assistance in rapid turnaround time. Through QCS, the Company is in the business of providing, on a volume basis, customized answers to business questions on a wide variety of topics. The service is offered only on a retainer basis. Retainer client organizations pay in advance, either monthly, quarterly, semi-annually or annually, a retainer fee. In return, the client organizations receive Membership Cards for their designated executives or employees. The Membership Card entitles each cardholder to use QCS and also offers preferential use of, and/or discounts on, the Company's other services and products. The Company has several fixed and adjustable fee retainer programs in effect. Out-of-pocket expenses incurred to answer questions are invoiced in addition to retainer fees. Retainer clients call FIND/SVP with their business issues and research needs, give their card number and explain their request to consultants who are divided into the following six practice groups and three support teams: PRACTICE GROUPS: (1) THE CONSUMER PRODUCTS AND SERVICES GROUP is responsible for research on retailing and apparel, home furnishings, cosmetics and toiletries, food and beverages, media and entertainment, publishing, sports and leisure, education, philanthropy, restaurants, food services, household products, appliances and furniture; (2) THE TECHNOLOGY, INFORMATION AND COMMUNICATIONS GROUP covers computers, software, electronic media and office equipment, and provides expert help with Internet research, hands-on training, on-site seminars, competitive intelligence, Web marketing/trends and Internet user demographics. (3) THE HEALTHCARE AND PHARMACEUTICALS GROUP covers products and services manufactured by and marketed to businesses in healthcare fields, including pharmaceuticals, medical and diagnostic equipment, biotechnology, health resources and clinical information; 3 (4) THE FINANCIAL AND BUSINESS SERVICES GROUP handles requests on banking, insurance, mergers and acquisitions, real estate and mortgages, the securities and investment industries, customer satisfaction and corporate management theory, and provides credit reports on specific companies and Securities and Exchange Commission documents on public companies; (5) THE INDUSTRIAL PRODUCTS AND SERVICES GROUP covers manufacturing, energy, chemicals, plastics, pulp and paper, metals and mining, transportation, environment, construction and agriculture; and (6) THE MANAGEMENT ADVISORY GROUP handles requests on legal research, human resources research and accounting and tax issues; SUPPORT TEAMS: (1) THE INTERNATIONAL TEAM addresses executive's needs for international finance and trade, global corporate competitive intelligence and worldwide management strategies; (2) THE DOCUMENTS TEAM locates and obtains copies of articles, documents, patents, books, pamphlets, catalogs, conference proceedings, government reports and product samples; and (3) THE MARKETING TEAM covers direct marketing, advertising, sales promotions and demographics. Client cardholders discuss their research needs with the Company's consultants and may obtain assistance in formulating their requests. After the request has been clarified, FIND/SVP's specialists find the needed information using a combination of the Company's available resources. After reviewing the findings, the consultants select what appears most relevant to the client's need, and report the findings, with commentary, as needed. Documentation of the findings can be sent by any one or a combination of the following methods: facsimile, courier, messenger, mail or electronic mail. QCS allows customers to benefit from a fast, convenient and confidential way to gather knowledge and use the multitude of research resources available today. Cardholders may ask questions on virtually any subject. Those requests requiring business intelligence from overseas are answered by one or more of the information centers in 15 SVP companies worldwide or by using special SVP correspondents in selected countries where no official SVP company exists. QCS is designed to handle client questions requiring less than approximately three hours of actual staff time. These are automatically covered by the retainer fee. Requests requiring a more extensive search or a lengthy written report are not covered by the QCS retainer program and are referred to the Company's Strategic Consulting and Research Group to be handled separately. QCS activity is tracked and controlled by a proprietary management information system called QUESTRAC, which uses recently upgraded state-of-the-art software technology. The program is based on the know-how provided by SVP France, the founders of the SVP concept of quick business advisory services by telephone. Input into the QUESTRAC system provides an exclusive and confidential database of information about each client, and the information requested and handled for clients. At December 31, 2000, there were 1,907 retainer clients, a 4.9% decrease from December 31, 1999, and 11,460 holders of the Membership Card, an 11.6% decrease from December 31, 1999. During 2000, 4 monthly fees billed to retainer clients (the retainer base) increased by 5.0% to $1,583,308. Approximately 50% of the top Fortune 100 industrial companies are QCS retainer clients. Revenues generated by QCS represented 82%, 82% and 74% of the Company's total revenues for the years ended December 31, 2000, 1999 and 1998, respectively. LIVE ANSWERDESK ("LAD"). LAD provides immediate, on-demand, question answering and personal search assistance from live experts. It is designed as a way to enhance the loyalty of the members of various consumer groups. Revenues generated by LAD represented 1.0% of the Company's total revenues for the year ended December 31, 2000, and less than 1.0% for the years ended December 31, 1999 and 1998. STRATEGIC CONSULTING AND RESEARCH GROUP ("SCRG"). SCRG is designed to handle more in-depth custom market research and competitive intelligence assignments. The service is most often used by the Company's QCS retainer clients as a supplement to that service. Common project requests include customized market and industry studies, telephone surveys, competitive intelligence data-gathering and analysis assignments, acquisition studies and large information collection projects. Additionally, through the Customer Satisfaction and Loyalty Group, SCRG provides customer satisfaction and loyalty programs. Through SCRG, the Company provides research as well as interpretation and analysis. All projects are quoted in advance and billed separately. Revenues generated by SCRG represented 16%, 17% and 17% of the Company's total revenues for each of the years ended December 31, 2000, 1999 and 1998, respectively. NON-CONTINUING PRODUCTS AND SERVICES In July 1998, the Company completed the sale of substantially all of the assets of FIND/SVP Published Products, Inc. ("Published Research") pursuant to an Asset Purchase Agreement dated as of June 26, 1998. The Company recorded a $20,000 gain related to this sale. Revenues generated from divested activities represented 9% of the Company's total revenues for the year ended December 31, 1998. POTENTIAL RELATED SERVICES AND PRODUCTS The Company plans to expand its services through continued internal development during 2001. This includes various initiatives aimed at both business-to-business and consumer users of the Internet. Additionally, the Company will consider exploring possible alliances with and/or acquisitions of consulting, research or information properties and companies whose primary markets are the same as FIND/SVP's market and which would be accretive to the Company's earnings. There are no commitments or understandings in this regard and no assurance can be given that the Company will in fact conclude any acquisitions or internally develop any related services. The foregoing plans are subject to, among other things, the availability of funds for these purposes. SVP NETWORK; LICENSING AGREEMENT WITH SVP INTERNATIONAL Through licensing agreements with SVP ("S'il Vous Plait") International, 16 companies (the "SVP companies"), including FIND/SVP, form an international network of information centers. Since each SVP company is based in a different country, the network has provided the means by which the Company can obtain international information requested by its clients which it may not maintain in its library or have access to if generated by or located in another country. When an SVP company accesses the information center of another SVP company it is charged a fee for the services provided thereby. Each SVP company is linked to the SVP network primarily by virtue of its licensing agreement. In 1971, the Company entered into its licensing agreement with SVP International (formerly SVP Conseil), which was amended in 1981, 5 and obtained the U.S. rights, in perpetuity, to the SVP name and know-how and access to the SVP International network. Pursuant thereto, SVP International assisted in the creation, implementation, development and operation of the Company. The Company has agreed, pursuant to such licensing agreement, to use its best efforts to have a person selected by SVP International elected to the Board of Directors of the Company; pursuant to such provision, Brigitte de Gastines, General Manager of SVP International, is also Chairperson of the Board for the Company. In addition, Jean-Louis Bodmer, Vice President-Finance and New Technologies for SVP Group and Eric Cachart, SVP Group's Vice President of Development and Client Services, are directors of the Company. Historically, SVP International has engaged in periodic telephonic conversations and meetings with the Company. By virtue thereof, the Company has benefited from exchanges of knowledge with SVP International with respect to any enhancements made to SVP International's information retrieval or billing systems or other proprietary know-how. During the first quarter of 1998, SVP International (including affiliates) increased its ownership in the Company to approximately 37% of the then outstanding common shares, excluding outstanding warrants, from 18.7% of the outstanding common shares, excluding outstanding warrants. Concurrent with the increased ownership, SVP International increased their management involvement in and physical presence at the Company during 1998, and it is expected that this will continue into the future. (See "Directors and Executive Officers of the Registrant - Directors and Officers") The license agreement provides that SVP International will not compete with the Company in the United States or enter into any agreement or arrangement with respect to services similar to those offered by the Company with any entity which operates or proposes to operate such services in the United States. The Company, in return, agreed to pay SVP International royalties of $18,000 per year, plus 2% of the amount of FIND/SVP's gross revenues for each such year, excluding publishing revenues, derived from certain of its services in excess of $2,000,000 but less than $4,000,000 and 1% of the amount of such non-publishing gross revenues in excess of $4,000,000 but less than $10,000,000, and 1.2% of the gross profit from all publications included in FIND/SVP's gross revenue less than $10,000,000 for such year. Royalty expense to SVP International totaled $118,000, $119,000 and $126,000 for the years ended December 31, 2000, 1999 and 1998, respectively. MARKETS AND CUSTOMERS The market for FIND/SVP's services and products is comprised primarily of business executives in a variety of functions, including top management and marketing, planning, marketing research, sales, information/library, legal, accounting, tax and new products. FIND/SVP's primary market, in terms of client organizations, consists of medium to small sized companies. Larger corporations are, however, among the Company's clients. In certain cases, the service is sold to more than one department or division of a large corporation. The Company's appeal to medium to small sized corporations is primarily based on the fact that these companies do not ordinarily maintain their own research staff and resource libraries and when they do, they are generally not comprehensive. Large corporations, on the other hand, often maintain in-house resource centers. Consequently, these corporations may perceive the Company's QCS service as unnecessary. The Company believes, however, that in-house corporate libraries are generally not as comprehensive. Therefore, QCS may be perceived as a valuable supplemental resource. In addition, in-house centers are good prospects for the Company's other services. Approximately 50% of the top Fortune 100 industrial companies are QCS retainer clients. Overall, the factors that will affect the growth of the Company's potential market and its ability to penetrate it include: (1) the market's perception of the need for and value of consulting, business intelligence and research services; (2) the trends in the use of 6 internal information centers and databases; and (3) the Company's ability to extend its personal selling efforts throughout the country. SALES AND MARKETING The Company's primary marketing focus is to expand its QCS retainer client base. In addition to generating revenues from the QCS services, the retainer client base serves as a ready-made marketplace for SCRG and other potential services of the Company. QCS is marketed through a combination of advertising, direct mail, exhibits, sales promotion activities and the Company's web site. Qualified leads are followed up by FIND/SVP's sales force. These leads are supplemented by referrals and cold-call selling efforts. The cost of the Company's advertising and public relations efforts is modest. COMPETITION The Company faces competition from three distinct sources: (1) other research and information services, (2) in-house corporate research centers, and (3) institutions that sell information directly to end-users. The Company is aware of several other smaller fee-based on-demand business information services in the United States. The Company believes that of these companies it is the largest in terms of revenues and staff size. The Company believes that the competition may be more significant from organizations such as Arthur D. Little, Stanford Research Institute and The Conference Board, which have research capabilities with call-in-service for reference type questions. To date, however, the call-in-service feature has not been emphasized by these companies. Although the Company is not aware of direct competitive companies with larger staffs and revenues, there is no assurance that as the information industry expands, more competitive companies will not enter the market. In addition, there is no assurance that a competitive company will not develop a superior product or service. The Company believes, however, that by reason of its experience in the industry, its association with the SVP network and its intent to closely monitor the consulting industry, it will be able to compete effectively with any potential competitors. In-house corporate information and research centers present perhaps the most significant source of competition for the Company today. Large corporations, in an effort to stay on top of the vast amount of information available, began to develop in increasing numbers, in-house libraries and information centers for their employees. While the Company believes that its own information center serves the added functions of analysis and generation of information and is larger and better staffed than a majority of these corporate resource centers, there is no assurance that a significant number of these large companies will choose to utilize the Company's services and products. The advent of on-line databases, the Internet and CD-ROM products has increased the ability of companies to perform information searches and other research for themselves. Consequently, to the extent companies perceive they can directly access information from the Internet, on-line databases and acquire CD-ROM products, FIND/SVP competes with information producers that sell to end-users. The Company believes, however, that its consultants deliver a value-added service based on their technical expertise and their ability to search more information products more quickly than most end users, thereby delivering a more thorough and economical service. There is no assurance, however, that companies which develop extensive resource centers will not accordingly staff them with equally productive personnel. 7 EMPLOYEES As of December 31, 2000, the Company had 184 full-time employees, including 4 executive officers, 49 marketing and sales employees, 85 consultants and research employees, and 46 administrative and general personnel. The Company's ability to develop, market and sell its services and to establish and maintain its competitive position will depend, in part, on its ability to attract and retain qualified personnel. While the Company believes that it has been successful to date in attracting such personnel, there can be no assurance that it will continue to do so in the future. The Company is not a party to any collective bargaining agreements with its employees. It considers its relations with its employees to be good. ITEM 2 PROPERTIES At December 31, 2000, the Company has a lease on approximately 32,000 square feet of office space at 625 Avenue of the Americas, New York, New York, which became the main offices of the Company in 1987. The lease is subject to standard escalation clauses, and expires in June 2005. Basic annual rent expense, determined on the straight-line basis over the term of the lease, is approximately $694,000. The Company has additional leased office space for approximately 20,000 square feet at 641 Avenue of the Americas, New York, New York. Such lease arrangements are subject to standard escalation clauses, and expire in June 2005. Basic annual rent expense, determined on the straight-line basis over the term of the lease, is approximately $497,000. ITEM 3 LEGAL PROCEEDINGS None. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 8 PAGE> PART II ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS PRICE RANGE OF COMMON STOCK The Company's common stock, par value $.0001 per share ("Common Stock"), is traded on the NASDAQ Small Cap Market under the symbol "FSVP". The following table sets forth the high and low closing sale prices for the Common Stock for the periods indicated. Price Range High Low - ----------- ---- --- 2000 - ---- 1st Quarter 4.0310 2.1880 2nd Quarter 2.6250 1.0000 3rd Quarter 1.2500 0.9380 4th Quarter 1.0000 0.5310 1999 - ---- 1st Quarter 1.7813 0.7500 2nd Quarter 1.0000 0.5938 3rd Quarter 1.5625 0.7188 4th Quarter 2.0625 0.7500 On March 1, 2001, there were approximately 836 holders of record of the Common Stock. Such numbers do not include shares held in "street name." By letter dated November 13, 2000, the Company received notification from the NASDAQ Stock Market, Inc. ("NASDAQ") that the Company was not in compliance with NASDAQ's $1.00 minimum bid price requirement; the shares of the Common Stock having closed below the minimum bid price for 30 consecutive business days. To regain compliance with this standard the Common Stock was required to have a closing bid price at or above $1.00 for ten consecutive trading days within the 90-calendar day period following the advent of non-compliance. The Company's Common Stock did not meet the minimum bid price requirement within that period. The Company requested a hearing with NASDAQ, which hearing was held on March 22, 2001. The Company's failure to meet NASDAQ's maintenance criteria may result in the discontinuance of the inclusion of its securities in NASDAQ. In such event, trading, if any, in the securities may then continue to be conducted in the non-NASDAQ over-the-counter market in what are commonly referred to as the electronic bulletin board and the "pink sheets". As a result, an investor may find it more difficult to dispose of or to obtain accurate quotations as to the market value of the securities. In addition, the Company would be subject to a Rule promulgated by the Securities and Exchange Commission that, if the Company fails to meet criteria set forth in such Rule, imposes various practice requirements on broker-dealers who sell securities governed by the Rule to persons other than established customers and accredited investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transactions prior to sale. 9 Consequently, the Rule may have an adverse effect on the ability of brokers-dealers to sell the securities, which may affect the ability of shareholders to sell the securities in the secondary market. DIVIDEND HISTORY AND POLICY The Company has never paid cash dividends on its Common Stock and anticipates that, for the foreseeable future, it will continue to follow a policy of retaining earnings to finance the expansion and development of its business. The Company's debt agreements restrict the payment of dividends. 10 ITEM 6 SELECTED FINANCIAL DATA The following financial data set forth below is derived from the consolidated financial statements of the Company. STATEMENTS OF OPERATIONS
Years Ended December 31 ----------------------- (in thousands, except per share amounts) 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- Revenues $23,800 $22,738 $28,175 $32,027 $30,525 Operating (Loss) Income (753) 348 1,329 (3,136) (824) Net (Loss) Income (535) 883 756 (2,852) (719) Net (Loss) Income Per Share: Basic (.07) .12 .11 (.43) (.11) Diluted (.07) .12 .11 (.43) (.11) Weighted Average Number of Shares: Basic 7,450 7,121 7,094 6,593 6,434 Diluted 7,450 7,213 7,100 6,593 6,434 Cash Dividends Paid Per Common Share - - - - -
BALANCE SHEET DATA
December 31 ----------- (in thousands) 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- Working Capital (Current assets less current liabilities) $1,587 $2,699 $2,569 $1,016 $3,930 Total Assets 10,783 11,278 11,899 12,481 12,946 Long-Term Notes Payable excluding current amounts 1,685 3,039 3,523 3,801 3,826 Shareholders' Equity 3,992 3,889 2,988 1,218 4,059
11 ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS GENERAL FIND/SVP, Inc. provides a broad consulting, advisory and business intelligence service to executives and other decision-making employees of client companies, primarily in the United States. The Company currently operates primarily in two business segments, providing consulting and business advisory services including: the Quick Consulting and Research Service ("QCS") which provides retainer clients with access to the expertise of the Company's staff and information resources as well as Live AnswerDesk services ("Quick Consulting"); and the Strategic Consulting and Research Group ("SCRG") which provides more extensive, in-depth custom market research and competitive intelligence information, as well as customer satisfaction and loyalty programs ("Strategic Consulting"). Prior to the third quarter of 1998, the Company had one additional significant operating segment, Published Research Products. The Company considers its QCS and SCRG service businesses, which operate as "consulting and business advisory" businesses, to be its core competency. The Company had an operating loss of $753,000 for the year ended December 31, 2000 versus operating income of $348,000 and $1,329,000 for the years ended December 31, 1999 and 1998, respectively. The net loss for the year ended December 31, 2000 was $535,000 versus net income of $883,000 and $756,000 for the years ended December 31, 1999 and 1998, respectively. Revenues for 2000 were $23,800,000 and revenues for 1999 were $22,738,000. On a comparable basis, 1999 revenues were $22,647,000 after deducting revenues of $91,000 related to the sold Published Research business unit. The increase in comparable revenues was a result of an increase in the Company's retainer base (recurring monthly income) in 2000, coupled with a significant increase in LAD revenues. This was partially offset by a decline in SCRG revenues for the year. Revenues for 1999 were $22,738,000 and revenues for 1998 were $28,175,000. On a comparable basis, 1998 revenues were $25,500,000 after deducting revenues of $2,700,000 related to the sold Published Research business unit. The decline in comparable revenues was a result of a decline in the Company's retainer base in late 1998 and early 1999. Net income in 1999 was positively affected by a pretax gain of $1,200,000 (approximately $672,000 after tax) resulting from a collaboration agreement between FIND/SVP and idealab!, a leading creator and operator of Internet businesses, to develop find.com, a new Internet site. Selling, general and administrative expenses were $12,426,000 in 2000, an increase of $1,579,000 over 1999. Direct costs (those costs directly related to generating revenue, such as direct labor, expenses incurred on behalf of clients and the costs of electronic resources and databases) in 2000 were 51.0% of revenue as compared to 50.8% for the year ended December 31, 1999. Additionally, selling, general and administrative expenses were 52.2% of revenue for 2000 as compared to 47.7% for the year ended December 31, 1999. Both total selling, general and administrative expenses and total direct costs, as well as these costs as a percentage of revenue, increased primarily due to increased labor costs and increased marketing and selling costs, as well as the Company's emphasis on increasing retainer revenue. 12 SEGMENT REPORTING The Company operated in two segments during 2000 and 1999. Prior to that, the Company had one additional segment. Segment data , which is useful in understanding results, is as follows:
- ---------------------------------------------------------------------------------------------------------------------- (in thousands) YEARS ENDED DECEMBER 31, ------------------------ 2000 1999 1998 ---- ---- ---- REVENUES Quick Consulting $ 19,930 $ 18,851 $ 20,714 Strategic Consulting 3,870 3,887 4,743 Published Research Products -- -- 2,718 --------------------------------------------------- Total revenues $ 23,800 $ 22,738 $ 28,175 =================================================== OPERATING (LOSS) INCOME Quick Consulting (1) $ 4,545 $ 4,680 $ 5,965 Strategic Consulting (58) 156 403 Published Research Products -- -- 16 --------------------------------------------------- Segment operating (loss) income 4,487 4,836 6,384 Corporate and other (2) (5,318) (3,664) (5,423) --------------------------------------------------- (Loss) income before (benefit) provision for income taxes $ (831) $ 1,172 $ 961 =================================================== DEPRECIATION AND AMORTIZATION Quick Consulting $ 583 $ 520 $ 440 Strategic Consulting 68 69 61 Published Research Products -- -- 96 --------------------------------------------------- Total segment depreciation and amortization 651 589 597 Corporate and other 531 516 547 --------------------------------------------------- Total depreciation and amortization $ 1,182 $ 1,105 $ 1,144 =================================================== TOTAL ASSETS Quick Consulting $ 3,406 $ 3,352 Strategic Consulting 843 735 Published Research Products -- -- ---------------------------------- Total segment assets 4,249 4,087 Corporate and other 6,534 7,191 ---------------------------------- Total assets $ 10,783 $ 11,278 ================================== CAPITAL EXPENDITURES Quick Consulting $ 160 $ 218 $ 478 Strategic Consulting 30 25 74 --------------------------------------------------- Total segment capital expenditures 190 243 552 Corporate and other 380 429 66 --------------------------------------------------- Total capital expenditures $ 570 $ 672 $ 618 ===================================================
(1) Operating income for the year ended December 31, 1998 includes a restructuring charge for severance and related costs of $321,000. (2) Includes interest income, other income, gain on sale of net assets, interest expense and other expense. - -------------------------------------------------------------------------------- 13 PRODUCT AND SERVICE REVENUES The Company's revenues increased by $1,062,000 or 4.7%, from $22,738,000 in 1999 to $23,800,000 in 2000 and decreased by $5,437,000, or 19.3%, from $28,175,000 in 1998 to $22,738,000 in 1999. The increase in 2000 was due to an increase in QCS and LAD revenues, partially offset by a decrease in SCRG revenues, as described below. The decrease in 1999 was primarily due to the sale of Published Research Products completed during the third quarter of 1998, coupled with a decline in revenues in QCS and SCRG during 1999 as described below. QCS revenues increased by $976,000, or 5.3%, from $18,576,000 in 1999 to $19,552,000 in 2000 and decreased by $2,137,000, or 10.3%, from $20,713,000 in 1998 to $18,576,000 in 1999. The increase from 1999 to 2000 was due to an increase in the average monthly fee paid by retainer clients, partially offset by the decline in the number of retainer clients. The monthly fees billed to retainer clients (the retainer base) increased from the beginning of 2000 to the end of 2000 by 5.0% to $1,583,308. The decrease from 1998 to 1999 was the result of a 0.9% decline in the number of retainer clients and a 12.8% decline in the number of retainer cardholders. The reduction in the retainer base was primarily due to an increase in the number of rate reductions granted to clients based on their recent usage history, coupled with a slow-down in new retainer sales during 1998, as compared to recent years. The slow down in sales was due primarily to staff turnover in the Business Development area that was experienced throughout 1998. The reduction in the retainer base began during the third quarter of 1998, and this was the first time in the Company's history that there had been a reduction in the retainer base during a full calendar year. The decline continued through the first quarter of 1999 and, on a dollar value basis, was reversed in the second quarter of 1999. The Company experienced a growth in the dollar value of the retainer base in both the third and fourth quarters of 1999, and for the full year ended December 31, 1999. As a result, the monthly fees billed to retainer clients (the retainer base) increased from the beginning of 1999 to the end of 1999 by 2.5% to $1,507,782. However, until the retainer base is brought back to previous levels attained in 1998, retainer revenue in QCS will be lower. In 1999, QCS revenue was lower due to client cancellations exceeding new client acquisitions. LAD revenues increased by $179,000, or 426.2%, from $42,000 in 1999 (the year the service began) to $221,000 in 2000. SCRG revenues decreased by $17,000, or 0.4%, from $3,887,000 in 1999 to $3,870,000 in 2000 and by $856,000, or 18.1%, from $4,743,000 in 1998 to $3,887,000 in 1999. The decrease from 1999 to 2000 was a result of a decrease in sales leads due to employee turnover. The number of new projects begun in the last half of 2000 decreased as compared to those begun in the last half of 1999. The decrease from 1998 to 1999 was a continuation of the impact felt by staff turnover in the second half of 1998. During the fourth quarter of 1998, staff turnover in SCRG slowed and since then has moderated. As a result, the Company experienced a decline in revenues during the first two quarters of 1999, as compared to the like quarters of 1998. The Customer Satisfaction and Loyalty Division accounted for 13.6%, 22.7% and 28.9% of SCRG's revenue for 2000, 1999 and 1998, respectively. The Company earned $91,000 and $39,000 in royalties in 1999 and 1998, respectively, from the sold Published Research unit. 14 DIRECT COSTS Direct costs (those costs directly related to generating revenue, such as direct labor, expenses incurred on behalf of clients and the costs of electronic resources and databases) increased by $584,000, or 5.1%, from $11,543,000 in 1999 to $12,127,000 in 2000 and decreased by $2,720,000, or 19.1%, from $14,263,000 in 1998 to $11,543,000 in 1999. Direct costs represented 51.0%, 50.8% and 50.6% of revenues, respectively, in 2000, 1999 and 1998. The increase in total direct costs from 1999 to 2000 was due primarily to an increase in direct labor costs over the previous year, partially offset by a decrease in all other direct costs as compared to the previous year. The decrease in total direct costs from 1998 to 1999 was a result of the sale of Published Research Products, coupled with a general reduction in direct operating expenses, primarily due to a reduced headcount and a reduction in expenses incurred on behalf of clients. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses increased by $1,579,000, or 14.6%, from $10,847,000, or 47.7% of revenues in 1999 to $12,426,000, or 52.2% of revenues in 2000, and decreased by $1,415,000, or 11.5%, from $12,262,000, or 43.5% of revenues in 1998 to $10,847,000, or 47.7% of revenues in 1999. The increase in total selling, general and administrative expenses from 1999 to 2000 was due primarily to an increase in labor costs over the previous year, coupled with an increase in selling expenses. The decrease from 1998 to 1999 was primarily due to a reduction in labor costs and reduced sales commissions during 1999, partially offset by an increased emphasis on marketing. RESTRUCTURING CHARGE On March 27, 1998, the Company reduced its full-time labor force in its core business by 20 positions. As a result, the Company recorded a restructuring charge of $321,000 during the quarter ended March 31, 1998. The charge consisted mainly of severance payments, which were fully paid by February 15, 1999, outplacement services and legal costs associated with the elimination of the positions. As of December 31, 1999, all costs related to this charge had been paid. OPERATING (LOSS) INCOME The Company's operating loss was $753,000 in 2000, compared to operating income of $348,000 in 1999, a decrease of $1,101,000. The decrease was primarily related to the Company's emphasis on increasing its retainer base through the use of increased marketing expense and the hiring of a larger sales force. The Company's operating income was $348,000 in 1999, compared to an operating income of $1,329,000 in 1998, a decrease of $981,000. The decrease was primarily related to the sale of Published Research Products, coupled with the decline in revenue from its QCS and SCRG activities. INTEREST INCOME AND EXPENSE; OTHER ITEMS In 2000, the Company earned $119,000 in interest income, which increased from $88,000 in 1999 and $85,000 in 1998. The increase in 2000 was a result of higher cash balances throughout 2000, coupled with interest earned on notes receivable. 15 Interest expense in 2000 was $336,000, which was a decrease from $464,000 in 1999, and from $522,000 in 1998. The decrease was a result of the reduction in outstanding debt in 2000 as compared to 1999. In the third quarter of 2000, the Company reduced its interest expense by replacing a portion of its Senior Subordinated Notes with a Term Note bearing a lower interest rate. During the third quarter of 2000, the Company received payment of $100,000 from a landlord in consideration for giving up its rights under a lease agreement. This payment was classified as other income. On December 30, 1999, the Company entered into an agreement with idealab! and Find.com, Inc. whereby the Company assigned the domain name "find.com" and licensed the use of certain rights to the trademarks "find.com" and "find" to Find.com, Inc. idealab! and Find.com, Inc. are not otherwise related to the Company. Under the terms of the agreement, the Company received consideration in the form of cash and preferred shares amounting to approximately $1,200,000, net of related expenses. The Company is also entitled to certain future royalties. No royalty income was earned in the year ended December 31, 2000. The carrying value of the preferred shares is the lower of historical cost or estimated net realizable value. The non-marketable preferred share securities carry various rights including the ability to convert into common shares of Find.com and a repurchase (put) option that becomes exercisable in December 2002. Since the preferred share securities are an investment in a start-up enterprise, it is reasonably possible in the near term that the Company's estimate of the net realizable value of the preferred shares will be less than the carrying value of the preferred shares. On January 20, 1998, the Company entered into a settlement agreement regarding a shareholder lawsuit which began during 1997, pursuant to which the suit was dismissed with prejudice. As part of the settlement, the Company purchased 274,400 shares of the Common Stock from the plaintiff for $1.25 per share, totaling $343,000. The purchase price contained a premium of $0.50 per share over the closing trade price of the Common Stock on the date of settlement, or $137,000. As a result of the above, the Company recorded treasury stock of $206,000 and expense of $137,000. The Company used proceeds from its insurance company of $495,000 to purchase the shares and to pay plaintiff and Company legal fees in the amount of $110,000 and $42,000, respectively. Accordingly, the Company recorded other income and other expense of $289,000, respectively, related to this matter, with the remaining balance of $206,000 offset against the aforementioned treasury stock repurchase amount, thus reducing the net treasury stock transaction to zero. INCOME TAXES The $323,000 income tax benefit for the year ended December 31, 2000 represents 38.9% of pre-tax loss. The $289,000 tax provision recognized for 1999 represents 24.7% of the 1999 pre-tax income. Income tax expense for 1999 was favorably reduced due to the reversal of a $280,000 valuation reserve placed upon deferred tax assets prior years. The $205,000 tax provision recognized for 1998 represents 21.3% of the 1998 pre-tax income. Income tax expense for 1998 was favorably reduced due to the reversal of $239,000 of the valuation reserve placed upon deferred tax assets in the prior year. 16 LIQUIDITY AND CAPITAL RESOURCES Historically, the Company's primary sources of liquidity and capital resources have been cash flow from operations, borrowings, and prepaid retainer fees provided by clients. Cash balances were $901,000 and $2,096,000 at December 31, 2000 and 1999, respectively. The Company's working capital position (current assets, less current liabilities) at December 31, 2000 was $1,587,000, as compared to $3,199,000 at December 31, 1999. The Company believes that its cash generated from operations, together with its existing cash balances, will be sufficient to meet its operating cash needs and expected capital expenditures for the near term. To supplement possible short-term cash needs, the Company has a $1,000,000 line of credit at the prime commercial lending rate plus one-half percent. The line is renewable annually, and was put in place on December 30, 1999. No amounts were borrowed under the line of credit as of December 31, 2000. Cash used in operating activities was $690,000 in the year ended December 31, 2000. Cash provided by operating activities was $1,093,000 and $2,166,000 in the years ended December 31, 1999 and 1998, respectively. Cash (used in) provided by investing activities was ($433,000), ($472,000) and $737,000 in the years ended December 31, 2000, 1999 and 1998, respectively. Capital expenditures for the migration of the Company's 10-year-old management information system to a new computer system platform were a significant component of the amounts invested in all three years. This new system improves the consultants' ability to communicate with clients, access the internet, and to integrate the Company's products, as well as to expand the Company's enterprise network. Total capital expenditures were $570,000, $672,000 and $618,000 in the years ended December 31, 2000, 1999 and 1998, respectively. In 1998, another significant factor was the receipt of $1,250,000 in cash received upon the sale of assets. During the year ending December 31, 2001, the Company expects to spend approximately $490,000 for capital items, the major portions of which will be used for computer hardware upgrades and for leasehold improvements. Cash used in financing activities was $72,000, $832,000, and $735,000 in the years ended December 31, 2000, 1999 and 1998, respectively. In 2000 and 1999, the most significant items related to the early repayment debt, which were otherwise due in installments in the years 2001 and 2002. In connection with the repayment of such bank borrowings, the bank released two $1,000,000 standby letters of credit that had been provided by a shareholder, SVP, S.A. In 1998, significant financing activities included the Company's repayment of bank borrowings of $1,749,000 and the proceeds obtained from the issuance of common shares of $1,000,000. The share proceeds related to an equity purchase by SVP S.A., a subsidiary of Amalia S.A. After the transaction, Amalia was the beneficial owner of approximately 40.7% of the Company's common shares. In the first quarter of 2000, warrants to acquire 266,945 common shares were exercised and $601,000 of face value of the Senior Subordinated Note due October 31, 2001 was surrendered as payment in a non-cash transaction. On August 1, 2000, the Company entered into a financing agreement with a commercial bank for a $1,400,000 Term Note, due June 30, 2005. The Note bears interest at prime plus 1.25 and is payable in quarterly installments beginning September 30, 2000. In early August 2000, the proceeds of the Note were used to pay down a portion of the Company's Senior Subordinated Notes. In November 2000, the 17 Company also exchanged 150,000 shares of its common stock for 633,000 outstanding warrants to purchase common stock. In accordance with the terms of the Senior Subordinated Notes, the payment of portions of accrued interest may be deferred. Accrued deferred interest of $62,000 and $76,000 at December 31, 2000 and 1999, respectively, was accrued and deferred under such terms. Such amounts compound and accrue interest at the rate of 12%. INFLATION The Company has in the past been able to increase the price of its products and services sufficiently to offset the effects of inflation on direct costs, and anticipates that it will be able to do so in the future. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" and in June 2000 issued SFAS No. 138, which amended certain provisions of SFAS No. 133. These statements require companies to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivatives and whether it qualifies for hedge accounting. The Company will adopt both pronouncements as of January 1, 2001. As of December 31, 2000, the Company has concluded that it did not have derivatives or hedging activities as contemplated by these pronouncements, and has accordingly concluded that there is no effect of adoption. REVENUE RECOGNITION The Company adopted the Securities and Exchange Commission's Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," ("SAB 101")," including related interpretations, in the quarter ended December 31, 2000. The adoption of SAB 101 had no impact on the Company's revenue recognition practices or reported financial results. FORWARD LOOKING INFORMATION: CERTAIN CAUTIONARY STATEMENTS This Annual Report on Form 10-K (and any other reports issued by the Company from time to time) contains certain forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including statements regarding the Company's future cash flows, sales, gross margins and operating costs, the effect of conditions in the industry and the economy in general, and legal proceedings, are based on current expectations that involve numerous risks and uncertainties. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various known and unknown factors, including, without limitation, future economic, competitive, regulatory, and market conditions, future business decisions, and those factors discussed under Management's Discussion and Analysis of Financial Condition and Results of Operations. Words such as "believes", "anticipates", "expects", "intends", "may", and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. The Company undertakes no obligation to revise and of these forward-looking statements. Subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by cautionary 18 statements in this paragraph and elsewhere in this Form 10-K, and in other reports filed by the Company with the Securities and Exchange Commission. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The financial position of the Company is subject to market risk associated with interest rate movements on outstanding debt. The Company has debt obligations with both fixed and variable terms. The carrying value of the Company's variable rate debt obligations approximates fair value as the market rate is based on prime. An increase in the underlying interest rates would result in a corresponding increase in interest expense, based on the then outstanding borrowings. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements are submitted in a separate section of this report on pages F-1 through F-31. Quarterly financial data is as follows. (in thousands, except per share data)
(Loss) income (Loss) income per share Operating (loss) before Net (loss) basic and Quarter ended Revenues income extraordinary item income diluted ------------- -------- ------ ------------------ ------ ------- March 31, 2000 $ 6,006 $ 23 $ (34) $ (34) $ 0.00 June 30, 2000 5,961 (99) (111) (111) (0.01) September 30, 2000 5,993 (361) (196) (223) (0.03) December 31, 2000 5,840 (316) (167) (167) (0.02) March 31, 1999 5,486 227 65 65 0.01 June 30, 1999 5,565 (118) (151) (151) (0.02) September 30, 1999 5,764 186 86 86 0.01 December 31, 1999 5,923 53 883 883 0.12
19 ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On April 22, 1999, the Company dismissed KMPG LLP ("KPMG") as its independent accountants. The decision to change independent accountants was approved by the Board of Directors upon the recommendation of the Audit Committee. During the year ended December 31, 1998 and through April 22, 1999, there had been no disagreements with KMPG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure or any reportable events. On May 4, 1999, the Company engaged Deloitte & Touche LLP ("D&T") as its new certifying accountant. Management had not previously consulted with D&T on any accounting, auditing or financial reporting matters. On May 6, 1999, the Company filed a current report on Form 8-K reporting a change in the Company's certifying accountants. 20 PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS AND OFFICERS On October 5, 1998, the Board of Directors of the Company established an Office of Managing Directors ("OMD") (a) responsible for (I) the conduct of the ordinary business affairs and operations of the Company and (II) defining operating policies in alignment with SVP International to take advantage of its know-how and technological efficiencies, (b) comprised of three members, who shall be elected by the Board of Directors, upon the advice of the Chairperson of the Board of Directors, and designated Senior Officers with the title of Managing Directors, and the Chief Executive Officer, and (c) reporting to the Board of Directors. Each Managing Director must be a member of the Board of Directors or hold another executive position with the Company. The directors and executive officers of the Company are as follows:
Name Age Position - ---- --- -------- Andrew P. Garvin (1) 55 President, Chief Executive Officer and Director Brigitte de Gastines 57 Managing Director and Chairperson of the Board of Directors Howard S. Breslow 61 Director Frederick H. Fruitman 50 Director Jean-Louis Bodmer 59 Managing Director and Director Eric Cachart 44 Managing Director and Director Stephan B. Sigaud (1) 44 Vice President - Client Services Kenneth A. Ash (1) 56 Vice President - International Strategic Research Fred S. Golden (1) 55 Vice President - Chief Financial Officer
- ----------------------- (1) Member of an Operating Management Group ("OMG") responsible for applying the Company's overall policies and strategies and for proposing initiatives and supplemental strategies for the growth of the Company. Each director is elected for a period of one year at the Company's annual meeting of shareholders and serves until his successor is duly elected by shareholders. Officers are elected by and serve at the will of the Board of Directors. Mr. Garvin is a founder of the Company and has served as its Chief Executive Officer since 1972 and as its President since 1978. Mr. Garvin has been a director of the Company since its inception and 21 treasurer until 1997. From 1979 to 1982, Mr. Garvin was a member of the Board of Directors of the Information Industry Association and served as Chairman of the 1979 National Information Conference and Exposition. Mr. Garvin is the author of The Art of Being Well Informed, an information resource handbook for executives. Mr. Garvin received a B.A. degree in political science from Yale University and an M.S. degree in journalism from the Columbia Graduate School of Journalism. Ms. de Gastines was elected a director of the Company in accordance with the Company's licensing agreement with SVP International. See "Item 1. Business - SVP Network; Licensing Agreement with SVP International." She has been a director of the Company since 1982 and Chairperson of the Board since October 1998. She has served as the General Manager of SVP International since 1985 and SVP S.A. since 1976. Mr. Breslow has been a director of the Company since 1986. He has been a practicing attorney in New York for more than 35 years and a member of the law firm of Breslow & Walker, LLP, New York, New York for more than 25 years. Breslow & Walker, LLP is the Company's general counsel. Mr. Breslow currently serves as a director of Cryomedical Sciences, Inc., a publicly held company engaged in the research, development and sale of products for use in low temperature medicine, Vikonics Inc., a publicly held company engaged in the design and sale of computer-based security systems, Lucille Farms, Inc., a publicly held company engaged in the manufacturing and marketing of cheese products, and Excel Technologies, Inc., a publicly held company engaged in the development and sale of laser products. Mr. Fruitman has been a director of the Company since 1989. Since 1990, Mr. Fruitman has been a Managing Director of Loeb Partners Corporation, an investment banking firm. Mr. Fruitman is a director of Micro Warehouse, Inc., a publicly held company which markets computer products. Mr. Bodmer has served as General Manager of SVP France since 1974. Other positions which he currently holds are Chief Executive Director of SVP, S.A., President and Chief Executive Officer of SVP Participation, President of SVP Belgium, and President of SVP United Kingdom. Mr. Cachart is the Associate General Manager of SVP, S.A. and has served as President of SVP Multi-info since 1995. He was named President of SVP Network in 1998. Prior to 1995 he was a journalist and news commentator for French television networks. Mr. Sigaud has been the Company's Vice President of Client Services since October 1998, and was Vice President and Managing Director of the Company's Customer Satisfaction and Loyalty Group from May 1994 to October 1998. From 1989 to 1994 Mr. Sigaud was the owner and President of IDSI, Inc., a consulting firm specializing in Customer Satisfaction Measurement for companies in the industrial sector. From 1986 to 1989 he functioned as Executive Vice President for BMES, Inc., a business-to-business marketing research firm. He was employed from 1982 to 1986 in the Recruiting Department of Renault in France. Prior thereto he was in International Sales and Marketing and worked as Business Development Manager for an engineering firm in East Africa and as Trade Attache in the French Trade Office in Madagascar. Mr. Sigaud holds a B.S. in Math and Physics from Marseilles University and an MBA in Marketing from ESSEC, the leading business school in France. Mr. Ash joined FIND/SVP in March 1992 as Vice President & Managing Director of the Strategic Consulting & Research Group and became Vice President International Strategic Research on October 5, 1998. From 1985 to 1992, Mr. Ash directed his own consulting firm specializing in marketing and acquisition engagements. In 1991 and 1992, Mr. Ash served as President and CEO of CallTrack Systems, a start-up company offering a network-based, long distance call accounting system geared to small and 22 medium-sized organizations. Mr. Ash served as Vice President of Marketing of Satellite Television Corporation, a COMSAT subsidiary and major communications start-up venture between 1983 and 1985. From 1973 to 1983, Mr. Ash held progressively senior account management positions at J. Walter Thompson and Ogilvy & Mather advertising agencies. Mr. Ash served as a U.S. Navy Officer from 1969 to 1972, earned an MBA from the Wharton School of the University of Pennsylvania in 1969 and a BA from Princeton University in 1967. Mr. Golden has been the Company's Vice President and Chief Financial Officer, Corporate Secretary and Treasurer since March 9, 2000. From July 1999 to March 2000, Mr. Golden was Chief Financial Officer of Elipze LLC, an interactive advertising and web production company. From 1968 through 1999, Mr. Golden, a certified public accountant, practiced management consulting and accounting, including four years with Laventhol Horwath. From 1982 to 1988, he was Chief Financial Officer at Confab Corporation, a $350 million manufacturing operation, and from 1988 to 1993, he was Executive Vice President and Chief Financial Officer at Pilot Air Freight Corp. Mr. Golden holds an accounting degree from Temple University. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company's officers, directors and beneficial owners of more than 10% of any class of its equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 ("Reporting Persons") are required under that Act to file reports of ownership and changes in beneficial ownership of the Company's equity securities with the Securities and Exchange Commission. Copies of those reports must also be furnished to the Company. Based solely on a review of the copies of reports furnished to the Company pursuant to that Act, the Company believes that during the fiscal year ended December 31, 2000, all filing requirements applicable to Reporting Persons were complied with, except that Form 4 Statement of Changes of Beneficial Ownership of Securities for Furman Selz LLC which was due on February 10, 2000, was filed on March 10, 2000 and for Fred S. Golden, an officer of the Company, which was due on May 10, 2000, was filed on May 15, 2000. 23 ITEM 11 EXECUTIVE COMPENSATION The following table sets forth certain information regarding compensation paid by the Company during each of the Company's last three years to (I) the Company's Chief Executive Officer, and (II) each of the Company's executive officers who received salary and bonus payments in excess of $100,000 during the year ended December 31, 2000 (collectively the "Named Executive Officers"): SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION ------------------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS ---------------------------------- ------------------------------ ---------- SECURITIES NAMES AND OTHER RESTRICTED UNDERLYING LTIP ALL PRINCIPAL SALARY BONUS ANNUAL STOCK OPTIONS PAYOUT OTHER POSITIONS YEAR ($) ($) COMP. AWARDS ($) (#) (1) ($) COMP. --------- ---- --- --- ----- ---------- ------- --- ----- ANDREW P. GARVIN 2000 273,257 67,200 - - 35,000 - - PRESIDENT, CHIEF 1999 267,679 - - - - - - EXECUTIVE OFFICER 1998 264,171 50,000 - - - - - AND DIRECTOR STEPHAN B. SIGAUD 2000 192,500 59,000 - - 125,000 - - VICE PRESIDENT - 1999 175,000 18,611 - - - - - CLIENT SERVICES 1998 133,958 200 - - 50,000 - - KENNETH A. ASH 2000 175,000 35,000 - - 37,500 - - VICE PRESIDENT - 1999 150,000 20,000 - - - - - INTERNATIONAL 1998 143,750 83,647 - - 60,000 - - STRATEGIC RESEARCH FRED S. GOLDEN 2000 147,881 - - - 112,500 - - VICE PRESIDENT , 1999 - - - - - - - CHIEF FINANCIAL 1998 - - - - - - - OFFICER, SECRETARY, TREASURER
- ------------------------ (1) Options to acquire Common Stock. 24 OPTION GRANTS DURING 2000 The following table provides information related to stock options granted to the Named Executive Officers during 2000:
INDIVIDUAL GRANTS NUMBER OF SECURITIES % OF TOTAL OPTIONS UNDERLYING OPTIONS GRANTED TO EXERCISE OR BASE GRANT DATE GRANTED EMPLOYEES IN FISCAL PRICE PRESENT VALUE NAME (#) (1) YEAR ($/SHARE) EXPIRATION DATE ($)(2) - ---- ------- -------------------- --------- --------------- ------ ANDREW P. GARVIN 15,000 1.9% 3.6875 3/9/10 46,350 20,000 2.6% 1.062 7/10/10 18,000 STEPHAN B. SIGAUD 25,000 3.2% 3.6875 3/9/10 77,250 100,000 12.9% 1.062 7/10/10 90,000 KENNETH A. ASH 25,000 3.2% 3.6875 3/9/10 77,250 12,500 1.6% 1.062 7/10/10 11,250 FRED S. GOLDEN 75,000 9.7% 3.6875 3/9/10 231,750 37,500 4.9% 1.062 7/10/10 33,750
- ------------------------ (1) Represent number of shares of Common Stock underlying stock options. The exercise price equals the fair market of the Common Stock on the date of grant. (2) The grant date present value portion of the foregoing table represents the present value of the options on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions over the remaining contractual life of the options: expected dividend yield of 0%, risk-free interest rate of 6% and volatility of 82.1%. 25 AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES The following table provides information related to options exercised by each of the Named Executive Officers during the year ended December 31, 2000 and the number and value of options held at fiscal year end. The Company does not have any outstanding stock appreciation rights.
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY AT FISCAL YEAR END (#) OPTIONS ---------------------- AT FISCAL YEAR END ($)(1) ------------------------- SHARES ACQUIRED ON VALUE NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- -------- -------- ----------- ------------- ----------- ------------- (#) ($) ANDREW P. GARVIN 39,860 89,685 63,000 97,000 - - STEPHAN B. SIGAUD - - 31,000 144,000 - - KENNETH A. ASH - - 37,000 60,500 - - FRED S. GOLDEN - - 15,000 97,500 - -
- ------------------------- (1) The closing sale price of the Common Stock as reported by NASDAQ on December 31, 2000 was 0.688. Value is calculated on the difference between the option exercise price of in-the-money options and 0.688 multiplied by the number of shares of Common Stock underlying the option. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee consists of Jean-Louis Bodmer, Andrew P. Garvin, Howard S. Breslow and Frederick H. Fruitman. The purpose of the Compensation Committee is to review, structure and set the Company's Executive Compensation and to align management's interest with the success of the Company. The Company has no nominating or other committees performing similar functions. There were no interlocking relationships between the Company and other entities that might affect the determination of the compensation of the executive officers of the Company. EMPLOYMENT AND RELATED AGREEMENTS On January 1, 1996, the Company entered into an Employment Agreement with Andrew P. Garvin commencing on January 1, 1996 and terminating on December 31, 2001 (the "Employment Agreement"). Such Employment Agreement was amended and restated on December 12, 1996. The Employment Agreement provides for a base salary of $250,000 which will be adjusted each January 1 for a cost of living increase based on the Consumer Price Index for New York City for the twelve month period immediately preceding such January 1 date. Mr. Garvin will also be entitled to additional increases in base salary as may be determined from time to time by the Board of Directors or any compensation committee appointed by the Board of Directors. Mr. Garvin received a $12,500 signing bonus upon execution of the Employment Agreement. In addition, Mr. Garvin will be entitled to receive performance bonuses equal to 10% per annum of the pre-tax profits of the Company in excess of $1,000,000 for each of the years ended December 31, 1996, 1997, 1998, 1999, 2000, and 2001. The Employment Agreement limits the bonus to $250,000 in any year, and states that Mr. Garvin is entitled to receive a cash bonus of $50,000 in each of January 1997 and January 1998. 26 The Employment Agreement provides that (I) if Mr. Garvin voluntarily leaves the employ of the Company on account of the Company being acquired and its principal office being moved to a location which is greater than 50 miles from New York City; and (II) if Mr. Garvin voluntarily leaves the employ of the Company on account of a Change in Control, then, in each such case, he shall be entitled to receive the compensation described in the immediately preceding paragraph for the balance of the term; provided, however, that if such termination occurs at a time when there is less than one year left in the term, the compensation shall continue for a period of two years from the date of termination on the same basis that the employee received compensation during the last year of the term. Change of control is defined in the Employment Agreement to include the acquisition by a party of 30% or more of the outstanding shares of Common Stock of the Company or a change in the majority of the Incumbent Board of Directors (as defined in the Employment Agreement). In the event that the Company terminates Mr. Garvin's employment for cause, and a court of law or other tribunal ultimately determines that such termination was without cause, then he shall be entitled to receive double the amount of compensation described above until the end of the term. Mr. Garvin has agreed to a non-competition covenant for a period of two years after the term of the Employment Agreement. During October 1998, Mr. Garvin's contract was amended to provide that any time after 1999 Mr. Garvin may voluntarily elect to leave the employ of the Company and receive the balance of his contract for the remaining term of his employment contract. The term of the contract runs through 2001. Mr. Garvin's salary for 2000 was $273,257. Additionally, Mr. Garvin has relinquished a total of 225,000 unvested options previously granted him in connection with his employment contract. The Company has entered into a deferred compensation agreement with Mr. Garvin, which provides for a schedule of payments to him or his designated beneficiary(ies). The agreement entered into in 1984 provides that in the event during the course of employment Mr. Garvin (I) dies, (II) becomes totally disabled or (III) elects to retire after June 30, 1994 and prior to age 65, he or, in the event of death, his designated beneficiaries, shall receive monthly payments ranging from $1,250 to $1,800 for a period of ten years from the date of death, disability or retirement. In the event Mr. Garvin retires at age 65 or over, Mr. Garvin shall receive $4,750 per month for ten years from the date of his retirement. The Company entered into an additional Deferred Compensation Agreement with Mr. Garvin in 1990. On October 3, 2000, Mr. Garvin relinquished his rights under the agreement entered into in 1990. Severance arrangements for members of the Operating Management Group (i.e. Messrs. Sigaud, Ash and Golden) were authorized by the Board of Directors on January 25, 1999. Severance agreements were entered into with Mssrs. Sigaud and Ash providing for (a) a normal severance benefit of nine (9) months, which would be increased to one (1) year after the employee has served as a member of the OMG for a continuous period of two (2) years, in the event the employee's services are terminated by the Company without cause, and (b) a severance benefit of one (1) year in the event the separation from service is due to (I) a change-in-control, and (II) the employee suffers, within one (1) year thereafter, either (A) a discontinuation of duties, or (B) an office change of at least 50 miles, or (C) a reduction in compensation, or (D) a termination of employment other than for cause. DIRECTORS' COMPENSATION The Board of Directors has approved the payment of $1,500 per Board meeting, and $500 per committee meeting attended by outside members of the Board. During 2000, Mr. Breslow received 27 compensation in the total amount of $11,000 and Mr. Fruitman received compensation in the total amount of $9,500. The Stock Option Plan of the Company was amended in June 1995 to provide for the automatic grant to outside directors of five-year non-incentive options to purchase 2,500 shares of Common Stock on the first business day of each new year beginning in 1996, the exercise price being the fair market value on the date of the grant. On April 22, 1999, the Board voted to grant each outside director additional five-year, non-incentive stock options to purchase 7,500 shares of Common Stock on the first business day of each year, commencing with the first business day of 2000, the exercise price being the fair market value on the date of the grant. 28 ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following sets forth, as of December 31, 2000, certain information with respect to the beneficial ownership of the Common Stock by (I) each person known by the Company to be the beneficial owner of more than 5% of its outstanding Common Stock, (II) each of the directors of the Company, (III) each of the Named Executive Officers, (IV) and by all current executive officers and directors as a group.
NAME AND ADDRESS NUMBER OF SHARES BENEFICIAL OWNER OWNED(1) PERCENT ---------------- ---------------- ------- Andrew P. Garvin 625 Avenue of the Americas New York, NY 10011 (2) 934,039 12.0% Amalia S.A. 70, rue des Rosiers F-93585 Saint-Ouen, Cedex FRANCE (3) 3,095,085 38.6% Brigitte de Gastines (4) 32,500 Less than 1% Howard S. Breslow (5)(6) 46,320 Less than 1% Frederick H. Fruitman (6) 75,679 1% Jean-Louis Bodmer (4) 25,000 Less than 1% Eric Cachart (7) 17,500 Less than 1% Kenneth A. Ash (8) 97,500 1.3% Stephan B. Sigaud (9) 175,000 2.2% Fred S. Golden (10) 117,500 1.5% Leviticus Partners LP 30 Park Avenue, Suite 12F New York, NY 10016 499,700 6.6% All Current Executive Officers and Directors as a Group 1,521,038 18.4% (9 persons) (11) - --------------------------------------------------------------------------------
(1) Unless otherwise indicated below, all shares are shares of Common Stock owned beneficially and of record. (2) Includes 160,000 shares issuable under outstanding options. (3) Includes the 422,222 shares issuable under outstanding warrants held by SVP, S.A., the 2,178,100 shares of Common Stock owned by SVP, S.A. and the 494,763 shares of Common Stock owned by SVP International, which are subsidiaries of Amalia S.A. Brigitte de Gastines owns in excess of 99% of the stock of Amalia S.A. In addition, Ms. de Gastines is President, General Manager and a director of SVP, S.A., and General Manager of SVP International. The shares owned by Amalia S.A. are not shown in the table as being owned by Ms. de Gastines. (4) Includes 22,500 shares issuable under outstanding options. (5) Includes all of the 18,820 shares of Common Stock owned by record of Breslow & Walker, LLP, a law firm in which Mr. Breslow is a partner. (6) Includes 27,500 shares issuable under outstanding options. (7) Includes 17,500 shares issuable under outstanding options. (8) Includes 97,500 shares issuable under outstanding options. (9) Includes 175,000 shares issuable under outstanding options. (10) Includes 112,500 shares issuable under outstanding options. (11) Includes 660,000 shares issuable under outstanding options. 29 ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Since 1971, the Company has been a licensee of SVP International. Pursuant to this license agreement, the Company pays royalties to SVP International for the use of the SVP name and participation in the SVP International network. For a description of the relationship of Ms. de Gastines, Mr. Bodmer and Mr. Cachart to SVP International see "Item 10. Directors and Executive Officers of the Registrant." The accrued royalties payable as of December 31, 2000 to SVP International were approximately $296,000. Howard S. Breslow, a director of the Company, is a member of Breslow & Walker, LLP, general counsel to the Company. During 2000, Breslow & Walker, LLP received legal fees of $77,414. 30 PART IV ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) FINANCIAL STATEMENTS The following Financial Statements are filed as part of this 10-K: Independent Auditors' Reports. Consolidated Balance Sheets as of December 31, 2000 and 1999. Consolidated Statements of Operations for the years ended December 31, 2000, 1999 and 1998. Consolidated Statements of Shareholders' Equity for the years ended December 31, 2000, 1999 and 1998. Consolidated Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998. Notes to Consolidated Financial Statements. (2) SCHEDULE The following Financial Statement schedule is filed as part of this 10-K: Schedule II - Valuation and Qualifying Accounts Other Financial Statement schedules are omitted because they are not applicable or because the information required is provided in the Consolidated Financial Statements or Notes thereto included herein. (3) EXHIBITS Exhibit Number Document ------ -------- 3(a) Copy of restated Certificate of Incorporation as amended(1), and amendment thereto. (b) Copy of By-Laws, as amended.(3) 4(a) Copy of specimen of Common Stock Certificate.(1) 31 10(a) Copy of License Agreement, dated October 11, 1971, between the Company and SVP International (formerly SVP Conseil) and an amendment thereto, dated March 23, 1981.(1) (b) Copy of 1986 Stock Option Plan.(1) (c) Copy of Deferred Compensation and Salary Continuation Agreement, dated June 30, 1984, between the Company and Andrew P. Garvin .(1) (d) Copy of the lease related to premises at 625 Avenue of the Americas, NY, NY.(2) and amendment related thereto.(5) (e) Copy of Target Benefit Plan of the Company.(4) (f) Copy of lease dated March 15, 1995 related to premises on 4th floor at 641 Avenue of the Americas, NY, N.Y. (6) (g) Copy of Commercial Revolving Loan, Term Loan and Security Agreement dated April 27, 1995 between State Street Bank and Trust Company and the Company. (7) (h) Copy of 401(k) and Profit Sharing Plan of the Company.(8) (i) Copy of Employment Agreement, amended and restated as of December 12, 1996, between the Company and Andrew P. Garvin.(10) 32 (j) Copy of the Note and Warrant Purchase Agreement with SVP, S.A. dated November 30, 1996. (10) (k) FIND/SVP, Inc. 1996 Stock Option Plan. (11) (l) Copy of ETRG Sale Agreement. (12) (m) Copy of the Sale Agreement for FIND/SVP Published Products, Inc.'s assets (13) (n) Copy of the Stock Purchase Agreement between SVP, S.A. and the Company dated January 15, 1998. (14) (o) Copy of Peter J. Fiorillo's Severance Agreement. (15) (p) Copy of the idealab! Agreement dated December 30, 1999. (16) (q) Copy of the Chase Manhattan Bank Loan Agreement dated December 30, 1999. (16) 21 List of Subsidiaries. (9) 23 Independent Auditors' Consents. 33 (1) Incorporated by reference to the Company's Registration Statement on Form S-18 (Reg. No. 33-8634-NY) which became effective with the Securities and Exchange Commission on October 31, 1986. (2) Incorporated by reference to the Company's Form 8-K filed with the Securities and Exchange Commission on February 2, 1987. (3) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1987. (4) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1989. (5) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1992. (6) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1994. (7) Incorporated by reference to the Company's Form 10-Q filed for the Quarter ended March 31, 1995. (8) Incorporated by reference to the Company's Form S-8 filed on March 29, 1996. (9) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1995. (10) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1996. (11) Incorporated by reference to the Company's Form S-8, filed on February 27, 1997. (12) Incorporated by reference to the Company's Form 10-Q, filed for the quarter ended September 30, 1997. (13) Incorporated by reference to the Company's Form 8-K, filed on July 17, 1998. (14) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1998. (15) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1998. (16) Incorporated by reference to the Company's Form 10-K filed for the year ended December 31, 1999. (b) REPORTS ON FORM 8-K No reports on Form 8-K were filed in the last quarter of the period covered by this Form 10-K. 34 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIND/SVP, INC. Date: April 2, 2001 BY: /s/ ANDREW P. GARVIN ---------------------------- Andrew P. Garvin, President and Chief Executive Officer (Principal Executive Officer) Date: April 2, 2001 BY: /s/ FRED S. GOLDEN ---------------------------- Fred S. Golden (Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirement(s) of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: April 2 , 2001 /s/ ANDREW P. GARVIN -------------------------- Andrew P. Garvin, Director Date: April , 2001 ------------------------------- Brigitte de Gastines, Director Date: April 2, 2001 /s/ HOWARD S. BRESLOW --------------------------- Howard S. Breslow, Director Date: April 2, 2001 /s/ FREDERICK H. FRUITMAN ------------------------- Frederick H. Fruitman, Director Date: April 2, 2001 /s/ ERIC CACHART -------------------------- Eric Cachart, Director Date: April 2, 2001 /s/ JEAN-LOUIS BODMER --------------------------- Jean-Louis Bodmer, Director 35 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FIND/SVP, INC. AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedule Page ---- Independent Auditors' Reports F-2 Consolidated Balance Sheets as of December 31, 2000 and 1999 F-4 Consolidated Statements of Operations for the years ended December 31, 2000, 1999 and 1998 F-5 Consolidated Statements of Shareholders' Equity for the years ended December 31, 2000, 1999 and 1998 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998 F-7 Notes to Consolidated Financial Statements F-8 Schedule: Independent Auditors' Report on Supplemental Schedule F-30 Schedule II - Valuation and Qualifying Accounts F-31 F-1 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of Find/SVP, Inc. We have audited the accompanying consolidated balance sheets of Find/SVP, Inc. and subsidiaries (the Company) as of December 31, 2000 and 1999, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the two years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Stamford, Connecticut March 28, 2001 F-2 INDEPENDENT AUDITORS' REPORT The Board of Directors FIND/SVP, Inc.: We have audited the accompanying consolidated statements of operations, shareholders equity, and cash flows of FIND/SVP, Inc. and subsidiaries for the year ended December 31, 1998. In connection with our audit of the consolidated financial statements, we also have audited the accompanying financial statement schedule for the year ended December 31, 1998. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and the cash flows of FIND/SVP, Inc. and subsidiaries for the year ended December 31, 1998, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP New York, New York February 22, 1999 F-3 FIND/SVP, INC. AND SUBSIDIARIES Consolidated Balance Sheets December 31 (in thousands, except share and per share data)
ASSETS 2000 1999 Current assets: Cash and cash equivalents $ 901 $ 2,096 Accounts receivable, less allowance for doubtful accounts of $101 in 2000 and 1999 2,520 1,941 Note receivable 138 138 Deferred tax assets 70 114 Prepaid expenses and other current assets 442 323 --------- -------- Total current assets 4,071 4,612 Equipment and leasehold improvements, at cost, less accumulated depreciation and amortization 3,558 3,995 Other assets: Deferred tax assets 789 403 Cash surrender value of life insurance 703 633 Accrued rent receivable 602 416 Non-marketable equity securities 500 500 Note receivable 137 275 Other assets 423 444 --------- -------- $ 10,783 $ 11,278 ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of notes payable $ 674 $ -- Trade accounts payable 791 409 Accrued expenses and other 979 1,430 Accrued interest 40 74 --------- -------- Total current liabilities 2,484 1,913 --------- -------- Unearned retainer income 2,071 1,929 Notes payable, including accrued deferred interest 1,685 3,039 Deferred compensation 323 267 Accrued rent payable 228 241 Commitments and contingencies Shareholders' equity: Common stock, $.0001 par value. Authorized 20,000,000 shares; issued and outstanding 7,605,943 shares in 2000; issued and outstanding 7,136,919 shares in 1999 1 1 Capital in excess of par value 5,542 4,904 Accumulated deficit (1,551) (1,016) --------- -------- Total shareholders' equity 3,992 3,889 --------- -------- $ 10,783 $ 11,278 ========= ========
See accompanying notes to consolidated financial statements. F-4 FIND/SVP, INC. AND SUBSIDIARIES Consolidated Statements of Operations Years ended December 31 (in thousands, except share and per share data)
2000 1999 1998 Revenues $ 23,800 $ 22,738 $ 28,175 ---------- ---------- ---------- Operating expenses: Direct costs 12,127 11,543 14,263 Selling, general and administrative expenses 12,426 10,847 12,262 Restructuring charge -- -- 321 ---------- ---------- ---------- Operating (loss) income (753) 348 1,329 Interest income 119 88 85 Other income 139 1,200 364 Gain on sale of net assets -- -- 20 Interest expense (336) (464) (522) Other expense -- -- (315) ---------- ---------- ---------- (Loss) income before (benefit) provision for income taxes and extraordinary item (831) 1,172 961 (Benefit) provision for income taxes (323) 289 205 ---------- ---------- ---------- (Loss) income before extraordinary item (508) 883 756 Extraordinary item (net of tax effect of $9 in 2000) (27) -- -- ---------- ---------- ---------- Net (loss) income $ (535) $ 883 $ 756 ========== ========== ========== (Loss) earnings per common share - basic and diluted: $ (.07) $ .12 $ .11 ======= ======= ======= Weighted average number of common shares outstanding: Basic 7,449,986 7,121,242 7,094,273 ========== ========== ========== Diluted 7,449,986 7,213,270 7,100,070 ========== ========== ==========
See accompanying notes to consolidated financial statements. F-5 FIND/SVP, INC. AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity Years ended December 31 (in thousands, except share amounts)
Common stock Capital in Accumulated Treasury stock Total ----------------- excess of earnings ------------------ shareholders' Shares Amount par value (deficit) Shares Amount equity ------ ------ --------- --------- ------ ------ ------ Balance at January 1, 1998 6,575,669 $ 1 $ 3,872 $ (2,655) -- $ -- $ 1,218 Net income -- -- -- 756 -- -- 756 Purchase of treasury stock -- -- -- -- (274,400) -- (456) Exercise of stock options and warrants 12,900 -- 14 -- -- -- 14 Retirement of treasury shares (74,400) -- -- -- 74,400 -- 206 Common stock issued 600,000 -- 1,000 -- 200,000 -- 1,250 ---------- -------- ---------- ----------- ------- ------- ------- Balance at December 31, 1998 7,114,169 1 4,886 (1,899) -- -- 2,988 ---------- -------- ---------- ----------- -------- ------- ------- Net income -- -- -- 883 -- -- 883 Exercise of stock options and warrants 22,750 -- 18 -- -- -- 18 ---------- -------- ---------- ----------- -------- ------- ------- Balance at December 31, 1999 7,136,919 1 4,904 (1,016) -- -- 3,889 ---------- -------- ---------- ------------ -------- ------- ------- Net loss -- -- -- (535) -- -- (535) Exercise of stock options and warrants 319,024 -- 638 -- -- -- 638 Common stock issued in exchange for warrants 150,000 -- -- -- -- -- -- ---------- -------- ---------- ----------- -------- ------- ------- Balance at December 31, 2000 7,605,943 $ 1 $ 5,542 $ (1,551) -- $ -- $ 3,992 ========== ======== ========== =========== ======== ======= =======
See accompanying notes to consolidated financial statements. F-6 FIND/SVP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Years ended December 31 (in thousands)
2000 1999 1998 Cash flows from operating activities: Net (loss) income $ (535) $ 883 $ 756 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation and amortization 1,182 1,105 1,144 Provision for losses on accounts receivable 217 90 164 Gain on sale of net assets -- -- (20) Increase in deferred compensation 56 74 20 Increase (decrease) in unearned retainer income 142 12 (106) Increase in non-marketable equity securities -- (500) -- Increase in cash surrender value of life insurance (70) (64) (132) (Increase) decrease in deferred income taxes (342) 245 205 Decrease in assets held for sale -- -- 99 Changes in assets and liabilities, net of non-cash effect of asset sale: (Increase) decrease in accounts receivable (796) 157 1,042 Decrease in prepaid and refundable income taxes -- -- 299 (Increase) decrease in prepaid expenses and other current assets (119) 143 (138) Increase in accrued rent receivable (186) (186) (186) Increase in other assets (109) (102) (93) Decrease in accounts payable, accrued expenses and accrued interest (117) (810) (927) (Decrease) increase in accrued rent payable (13) 46 39 ------- --------- -------- Net cash (used in) provided by operating activities (690) 1,093 2,166 ------- --------- -------- Cash flows from investing activities: Capital expenditures (570) (672) (618) Surrender of life insurance -- -- 42 Repayment of notes receivable 137 200 63 Proceeds from sale of net assets -- -- 1,250 ------- --------- -------- Net cash (used in) provided by investing activities (433) (472) 737 ------- --------- -------- Cash flows from financing activities: Principal borrowings under notes payable 1,400 -- -- Principal payments under notes payable (1,474) (850) (1,749) Proceeds from issuance of convertible note-related party -- -- 250 Proceeds from exercise of stock options and warrants 37 18 14 Proceeds from issuance of common stock -- -- 750 Payments to acquire treasury stock -- -- (206) Proceeds from insurance company, net of expenses -- -- 206 Increase in deferred financing fees (35) -- -- ------- --------- -------- Net cash used in financing activities (72) (832) (735) ------- --------- --------- Net (decrease) increase in cash and cash equivalents (1,195) (211) 2,168 Cash and cash equivalents at beginning of year 2,096 2,307 139 ------- --------- -------- Cash and cash equivalents at end of year $ 901 $ 2,096 $ 2,307 ======= ========= ========
See accompanying notes to consolidated financial statements. F-7 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2000, 1999 and 1998 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) ORGANIZATION AND BASIS OF PRESENTATION Find/SVP, Inc. and its wholly owned subsidiaries (the "Company") provide a broad consulting, advisory and business intelligence service to executives and other decision-making employees of client companies, primarily in the United States. The Company currently operates in two business segments, providing consulting and business advisory services including: the Quick Consulting and Research Service ("QCS") which provides retainer clients with access to the expertise of the Company's staff and information resources as well as a Live AnswerDesk service ("Quick Consulting"); and the Strategic Consulting and Research Group ("SCRG") which provides more extensive, in-depth custom market research and competitive intelligence information, as well as customer satisfaction and loyalty programs ("Strategic Consulting"). Prior to the third quarter of 1998, the Company had one additional operating segment, Published Research Products. The Company considers its QCS and SCRG service businesses, which operate as "consulting and business advisory" businesses, to be its core competencies. During July 1998, the Company completed the sale of substantially all of the assets of its FIND/SVP Published Products, Inc. subsidiary ("Published Research"). The Company recorded a gain of $20,000 from this transaction. The revenues from Published Research accounted for approximately 9% of the Company's total revenues during 1998. (b) PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company. All significant intercompany balances and transactions have been eliminated in consolidation. (c) EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. Electronic equipment and computer software is primarily depreciated over five years, and the Company's proprietary management information software system is depreciated over ten years. Leasehold improvements are amortized by the straight-line method over the shorter of the term of the lease or the estimated life of the asset. F-8 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (1), CONTINUED (d) DEFERRED CHARGES AND GOODWILL Deferred charges primarily comprise the cost of acquired library information files and electronic databases, which are amortized to expense over the estimated period of benefit of three years using the straight-line method. Goodwill arising from various acquisitions represents the excess of purchase price over the fair value of assets and liabilities acquired and is being amortized on a straight-line basis over 15 years. (e) DEFERRED FINANCING FEES Deferred financing fees primarily relate to costs incurred with respect to the issuance of the Senior Subordinated Notes ("Senior Notes") and are being amortized on a straight-line basis over the life of the Senior Notes. The related amortization is included in interest expense. (f) INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Realization of the net deferred tax assets is dependent on future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing temporary differences and carryforwards. Although realization is not assured, management believes that it is more likely than not that the net deferred tax assets will be realized. (g) EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share are computed by dividing net income (loss) by a diluted weighted average number of common shares outstanding during the year. Such dilution is computed using the treasury stock method for the assumed conversion of stock options and warrants whose exercise price was less than the average market price of the common shares during the respective period, and certain additional dilutive effects of exercised, terminated and cancelled stock options. In the year ended December 31, 2000 there was no such dilutive effect. F-9 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (1), CONTINUED Options and warrants to purchase 1,557,914, 1,883,789 and 2,530,225 common shares during the years ended December 31, 2000, 1999 and 1998, respectively, were antidilutive and were therefore excluded from the computation of diluted earnings per share. (h) REVENUE RECOGNITION Revenues from annual retainer fees are recognized ratably over the contractual period. Other revenues are recognized as earned. Revenues include certain out-of-pocket and other expenses billed to clients which aggregated approximately $1,770,000, $2,186,000 and $2,875,000 in 2000, 1999 and 1998, respectively. (i) CASH AND CASH EQUIVALENTS Cash and cash equivalents includes all highly liquid investments with original maturities of three months or less. (j) NON-MARKETABLE EQUITY SECURITIES Non-marketable equity securities are valued at the lower of historical cost or estimated net realizable value. (k) FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used in estimating the fair value of financial instruments: The carrying values reported in the balance sheets for cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair values. The fair value of notes payable, which approximates its carrying value, is estimated based on the current rates offered to the Company for debt of the same remaining maturities. F-10 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (1), CONTINUED (l) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. (m) NEW ACCOUNTING PRINCIPLES In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" and in June 2000 issued SFAS No. 138, which amended certain provisions of SFAS No. 133. These statements require companies to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivatives and whether it qualifies for hedge accounting. The Company will adopt both pronouncements as of January 1, 2001. As of December 31, 2000, the Company has concluded that it did not have derivatives or hedging activities as contemplated by these pronouncements, and has accordingly concluded that there is no effect of adoption. The Company adopted the Securities and Exchange Commission's Staff Accounting Bulletin No. 101, "Revenue Recognition," ("SAB 101"), including related interpretations, in the quarter ended December 31, 2000. The adoption of SAB 101 had no impact on the Company's revenue recognition practices or reported financial results. (n) USE OF ESTIMATES Management makes estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. F-11 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (1), CONTINUED (o) RECLASSIFICATIONS Certain prior year balances have been reclassified to conform with current year presentation. (2) EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET At December 31, 2000 and 1999, equipment and leasehold improvements consist of the following:
- ----------------------------------------------------------------------------------------------- 2000 1999 Furniture, fixtures and equipment, including computer software $8,939,000 $8,598,000 Leasehold improvements 1,913,000 1,796,000 ------------- ------------- 10,852,000 10,394,000 Less: accumulated depreciation and amortization 7,294,000 6,399,000 ------------- ------------- $3,558,000 $3,995,000 ============= ============= - -----------------------------------------------------------------------------------------------
(3) OTHER ASSETS At December 31, 2000 and 1999, other assets consist of the following: - -------------------------------------------------------------------------------- 2000 1999 Deferred charges $176,000 $151,000 Security deposits 132,000 142,000 Goodwill, net 86,000 96,000 Deferred financing fees, net 29,000 55,000 ----------- ----------- $423,000 $444,000 =========== =========== - -------------------------------------------------------------------------------- (4) LEASES The Company has an operating lease agreement for its principal offices, which expires in 2005. As a result of certain lease renegotiations, rental expense is scheduled to decline over the term of the lease. Rental expense under this lease is recorded on a straight-line basis. Scheduled payments through December 31, 2000 and 1999 exceeded rental expense recorded on this lease through such dates by $602,000 and $416,000, respectively. F-12 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (4), CONTINUED The Company has two operating leases for additional office space that expire in 2005. Rental expense is scheduled to increase over the term of the lease. Rental expenses on these leases are recorded on a straight-line basis. Accordingly, rent recorded through December 31, 2000 and 1999 exceeded scheduled payments by $228,000 and $241,000, respectively. In September 2000, the Company gave up its rights to a portion of this space for which the Company received $100,000 from its landlord, which is included in other income in 2000. In 1998, the Company gave up its rights to part of its leased space for which the Company received a payment of $75,000 from its landlord, which was included in other income in 1998. The Company's leases of office space include standard escalation clauses. Rental expenses under leases for office space and certain equipment accounted for as operating leases were $1,573,000, $1,676,000 and $1,749,000 in 2000, 1999 and 1998, respectively. The future minimum lease payments under noncancellable operating leases as of December 31, 2000 were as follows: - -------------------------------------------------------------------------------- Year ending December 31 Operating Leases - ----------------------- ---------------- 2001 $1,333,000 2002 1,093,000 2003 853,000 2004 853,000 2005 426,000 Thereafter -- --------------- Total minimum lease payments $4,558,000 =============== - -------------------------------------------------------------------------------- F-13 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (5) NOTES PAYABLE Notes payable as of December 31, 2000 and 1999 consist of the following:
- -------------------------------------------------------------------------------------------------------- 2000 1999 Bank borrowings $ 1,350,000 $ - Borrowings under debt agreements with investors: $475,000 Series A Senior Subordinated Note - SVP, S.A., net of unamortized discount of $1,000 and $2,000 as of December 31, 2000 and 1999, respectively, due November 30, 2001 474,000 473,000 $475,000 Series A Senior Subordinated Note - SVP, S.A., net of unamortized discount of $2,000 and $3,000 as of December 31, 2000 and 1999, respectively, due August 25, 2002 473,000 472,000 $2,025,000 Series A Senior Subordinated Note -- 2,018,000 -------------- -------------- Total notes payable 2,297,000 2,963,000 Less current installments 674,000 -- Plus accrued deferred interest 62,000 76,000 -------------- -------------- Notes payable, excluding current Installments $ 1,685,000 $ 3,039,000 ============== ============== - --------------------------------------------------------------------------------------------------------
(a) DEBT AGREEMENTS WITH BANK On August 1, 2000, the Company entered into a financing agreement with a commercial bank for a $1,400,000 Term Note (the "Note"), due June 30, 2005. The Note bears interest at prime plus 1.25% and is payable in quarterly installments beginning September 30, 2000. As of December 31, 2000, there was $1,350,000 outstanding on this Note. The Company has a $1,000,000 line of credit at the prime commercial lending rate plus 0.5%. The line is renewable annually, and was put in place on December 30, 1999. No amounts were borrowed under the line of credit as of December 31, 2000. F-14 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (5), CONTINUED (b) DEBT AGREEMENTS WITH INVESTORS Borrowings under the debt agreements with investors accrue interest at an annual rate of 12% on the unpaid principal balance. Interest payments are made periodically, and the agreements allow for the automatic deferral of some of the interest. Any interest that is deferred, compounds and accrues interest at 12%. As of December 31, 2000, there was approximately $102,000 of accrued but unpaid interest of which $62,000 was deferred in accordance with said provisions. As of December 31, 1999, there was approximately $150,000 of accrued but unpaid interest, of which $76,000 was deferred. In early August 2000, the proceeds of the Term Note due June 30, 2005 were used to pay down a portion of the Company's Senior Subordinated Notes, resulting in an after tax extraordinary loss of $27,000. The aggregate principal maturities of long-term debt for the next five years, including deferred interest and after full amortization of discounts, are as follows: - ------------------------------------------------------------------------- Year ending December 31, - ------------------------ 2001 $ 725,000 2002 725,000 2003 300,000 2004 350,000 2005 200,000 --------------- $ 2,300,000 =============== - ------------------------------------------------------------------------- (6) SHAREHOLDERS' EQUITY (a) SALE OF COMMON STOCK In 1998, SVP, S.A. ("SVP"), a subsidiary of Amalia S.A., purchased $1,000,000 of the Company's common stock at $1.25 per share. At December 31, 2000 and 1999, Amalia S. A., and its subsidiaries, was the owner of approximately 35.1% and 37.2%, respectively, of the Company's common shares. (b) COMMON STOCK WARRANTS At December 31, 2000, warrants to purchase 422,222 of the Company's common shares at $2.25 per share, were outstanding. These warrants may be exercised by payment to the Company in cash, or by surrender to the Company of the equivalent face value amount of Senior Subordinated Notes. F-15 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (6), CONTINUED At December 31, 2000, additional warrants to purchase 150,000 of the Company's Common Shares, at $2.25 per share, were outstanding. These warrants may be exercised by payment to the Company in cash. During the first quarter of 2000, 266,945 of such warrants were exercised. Under the terms of the agreement, $600,626 of face value of the Senior Subordinated Note due October 31, 2001 was surrendered as payment. In August 2000 as part of the early retirement of the Senior Subordinated Note due October 31, 2001, 633,055 warrants were converted into 150,000 shares of the Company's common stock. (c) STOCK OPTION PLAN The Company's 1996 Stock Option Plan (the "Plan"), as amended in 1998 and 2000, authorizes grants of options to purchase up to 1,650,000 shares of common stock, issuable to employees, directors and consultants of the Company, at prices at least equal to fair market value at the date of grant (110% of the fair market value for holders of 10% or more of the outstanding shares of common stock). The options to be granted under the Plan will be designated as incentive stock options or non-incentive stock options by the Stock Option Committee. Options granted under the Plan are exercisable during a period of no more than ten years from the date of the grant (five years for options granted to holders of 10% or more of the outstanding shares of common stock). All options outstanding at December 31, 2000 expire within the next ten years if not exercised. Options that are cancelled or expire during the term of the Plan are eligible to be re-issued under the Plan and, therefore, are considered available for grant. There were 166,200 options outstanding under the 1986 Stock Option Plan as of December 31, 2000, and there were no options available for grant under this plan at December 31, 2000. F-16 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (6), CONTINUED Activity under the stock option plans is summarized as follows:
- ------------------------------------------------------------------------------------------------ Weighted Available average for Options exercise grant Granted price -------- --------- ------ January 1, 1998 128,100 1,176,713 $ 1.78 Additional authorized 500,000 Granted (366,500) 366,500 0.84 Exercised -- (12,900) 1.12 Cancelled and terminated 540,550 (540,550) 1.46 No longer available under 1986 Plan (235,000) -- -- -------- ---------- ------- December 31, 1998 567,150 989,763 1.31 Granted (247,500) 247,500 0.80 Exercised -- (22,750) 0.77 Cancelled and terminated 338,613 (338,613) 1.09 No longer available under 1986 Plan (171,963) -- -- -------- ---------- ------- December 31, 1999 486,300 875,900 1.12 Additional authorized 500,000 -- -- Granted (772,500) 772,500 2.15 Exercised -- (80,910) 1.68 Cancelled 291,840 (291,840) 1.14 No longer available under the 1986 Plan (30,140) -- -- -------- ---------- ------- December 31, 2000 475,500 1,275,650 1.74 ======== ========== ======= Exercisable at December 31, 2000 435,550 $ 1.56 ========== ======= Exercisable at December 31, 1999 327,075 $ 1.40 ========== ======= Exercisable at December 31, 1998 396,713 $ 1.62 ========== =======
During 2000 options to purchase 772,500 shares of common stock were granted under the Company's Stock Option Plan, at prices ranging from $0.96875 to $3.6875. As of December 31, 2000, there were 1,275,650 options outstanding, exercisable at $0.65625 to $3.6875, with an average remaining contractual life of 5.54 years. As of December 31, 2000, there were 435,550 exercisable options, exercisable at $0.65625 to $3.6875, with an average remaining contractual life of 6.01 years. F-17 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (6), CONTINUED On June 30, 1998 the Stock Option Committee of the Board of Directors voted in favor of a plan to re-price certain outstanding options held by employees on that date. There was a total of 89,550 options with original issue dates between 1994 and 1998 that were re-priced. The original exercise price of said options ranged from $1.21 to $2.25 and the weighted-average exercise price of those options was $1.78. The options were re-priced at $1.0625, the fair market value on June 30, 1998. All other aspects of the options were not changed. The weighted average exercise prices noted above reflect this repricing. Included in the options granted as of December 31, 1997 are 300,000 options the Company granted to the President of the Company. Contingent upon meeting certain earnings levels over the life of his employment agreement, these options will vest on the certification date of the targeted earnings levels. The exercise price of these options will be equal to the fair market value of the common stock on the vesting date or 110% of such fair market value if the President is a holder of 10% or more of the outstanding shares of common stock on such date. As of December 31, 2000, the President has relinquished a total of 225,000 of these options. The Company applies APB Opinion No. 25 in accounting for its Plan and, accordingly, no compensation cost has been recognized for its stock options in the financial statements. Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, "Accounting for Stock-Based Compensation", the Company's net income (loss) would have been reduced (increased) to the pro forma amounts indicated below:
- ----------------------------------------------------------------------------------------------------- 2000 1999 1998 Net (loss) income As reported $ (535,000) $ 883,000 $ 759,000 Proforma (646,000) 821,000 697,000 ------------------------------------------------ (Loss) earnings per share Basic As reported (0.07) 0.12 0.11 Proforma (0.09) 0.12 0.10 ------------------------------------------------ Diluted As reported (0.07) 0.12 0.11 Proforma (0.09) 0.11 0.10 ------------------------------------------------ - -----------------------------------------------------------------------------------------------------
F-18 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (6), CONTINUED The per share weighted-average fair value of stock options granted during 2000, 1999 and 1998 was $1.21, $0.43 and $0.33, respectively, on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: 2000 - expected dividend yield of 0%, risk-free interest rate of 6%, volatility of 82.1% and an expected life of 3 years; 1999 - expected dividend yield of 0%, risk-free interest rate of 6%, volatility of 75.6% and an expected life of 3 years; 1998 - expected dividend yield of 0%, risk-free interest rate of 6%, volatility of 48.8% and an expected life of 3 years. Volatility is calculated over the five preceding years for 2000, 1999 and 1998, respectively. (d) PREFERRED STOCK The Company has authorized and unissued preferred stock consisting of 2,000,000 shares at $.0001 par value. (7) SVP INTERNATIONAL - RELATED PARTY The Company has an agreement with SVP International, a subsidiary of Amalia S.A. The agreement provides that SVP International will aid and advise the Company in the operation of an information service and permit access to other global SVP information centers, and the use of the SVP trademark and logo. The agreement shall continue in perpetuity, unless amended by the parties. The Company pays royalties to SVP International computed using a formula based on percentages of service and product revenues, subject to certain limitations. Royalty expense under the agreement was $118,000, $119,000 and $126,000 in the years ended December 31, 2000, 1999 and 1998, respectively. Amounts due to SVP International, included in accrued expenses, were approximately $278,000 and $240,000 at December 31, 2000 and 1999, respectively. The Company receives and renders information services to other members of the SVP network. Charges for such services are made at rates similar to those used for the Company's other clients. F-19 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (8) INCOME TAXES The provision (benefit) for income taxes consists of the following:
- ---------------------------------------------------------------------------------------------------- 2000 1999 1998 Current: Federal $ -- $ -- $ -- State and local -- 20,000 -- ----------------------------------------------------- -- 20,000 -- Deferred: Federal (260,000) 524,000 342,000 State and local (63,000) 25,000 102,000 ----------------------------------------------------- (323,000) 549,000 444,000 Change in valuation allowance -- (280,000) (239,000) ----------------------------------------------------- (323,000) 269,000 205,000 ----------------------------------------------------- $ (323,000) $ 289,000 $ 205,000 ===================================================== - ----------------------------------------------------------------------------------------------------
Income tax (benefit) expense differs from the amount computed by multiplying the statutory rate of 34% to income before income taxes due to the following:
- ------------------------------------------------------------------------------------------------------------------- 2000 1999 1998 Income tax (benefit) expense at statutory rate $(283,000) $ 398,000 $ 327,000 Increase (reduction) in income taxes resulting from: Change in valuation allowance -- (280,000) (239,000) State and local (benefit) taxes, net of federal income tax benefit (63,000) 118,000 97,000 Nontaxable income (24,000) (18,000) (30,000) Nondeductible expenses 25,000 31,000 31,000 Other 22,000 40,000 19,000 -------------------------------------------------- $(323,000) $ 289,000 $ 205,000 ================================================== - -------------------------------------------------------------------------------------------------------------------
F-20 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (8), CONTINUED The tax effects of temporary differences that give rise to significant portions of the deferred tax assets, net of deferred tax liabilities at December 31, 2000 and 1999 are presented below: - -------------------------------------------------------------------------------- 2000 1999 Deferred tax assets: State and local tax loss carryforwards $ 317,000 182,000 Federal tax loss carryforwards and credit 226,000 129,000 Deferred compensation 142,000 117,000 Royalty expenses 115,000 -- Other, net 42,000 43,000 Depreciation and amortization 17,000 -- Severance charges -- 46,000 Restructuring charges -- 26,000 Deferred tax liability: Depreciation and amortization -- (26,000) ---------------------------- Net deferred tax asset $ 859,000 $ 517,000 ============================ - -------------------------------------------------------------------------------- Based on the Company's history of prior years' operating earnings relating to its research-for-hire businesses, a valuation allowance of $280,000 as of December 31, 1998 was necessary due to the uncertainty of future earnings to realize the net deferred tax asset. Based upon the 1999 operating results, the valuation allowance was reversed as of December 31, 1999. Of the net deferred tax asset, $70,000 and $114,000 as of December 31, 2000 and December 31, 1999, respectively, are classified as current. Most federal tax loss carryforwards will expire in 2015. State and local tax loss carryforwards expire between 2011 and 2020. Alternative minimum tax assets may be used indefinitely. F-21 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (9) EMPLOYEE BENEFITS AND DEFERRED COMPENSATION (a) EMPLOYEE BENEFIT PLANS The Company sponsors a 401(k) and profit sharing plan under which eligible participants may elect to defer eligible compensation up to governmental limitations. The Company contributes 20% of the employees' contributions up to 1% of their annual compensation and may contribute additional profit sharing amounts at the discretion of the Company. Expense was $86,000, $61,000 and $57,000 for the years ended December 31, 2000, 1999 and 1998, respectively. During 2000 the Company terminated its Target Benefit Pension Plan. All funds were distributed to participants as of December 31, 2000. (b) DEFERRED COMPENSATION The Company has deferred compensation agreements with two individuals, with benefits commencing upon retirement, death or disability. Deferred compensation expense under these agreements was approximately $56,000, $74,000 and $20,000 in 2000, 1999 and 1998, respectively. (c) EMPLOYMENT AGREEMENTS The Company has an employment agreement (the "Agreement") with the President of the Company, which expires in December 2001. The Agreement contains certain severance provisions entitling the President to receive compensation upon termination without cause, or voluntary termination upon certain conditions, which includes the acquisition by a party of 30% or more of the outstanding shares of common stock of the Company or a change in the majority of incumbent Board members, and certain other occurrences. If termination occurs at a time when there is less than one year left in the Agreement, compensation will continue for a two-year period from the date of termination. F-22 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (9), CONTINUED During 1998, the Board amended the contract with the Company's President to provide that at any time after the end of calendar year 1999, the President may elect to voluntarily leave the employ of the Company and receive the balance of his contract for the remaining term on his employment contract. The term of the contract runs through 2001. Effective September 30, 1998, the Company accepted the resignation of an Executive Officer. In connection with his severance agreement, coupled with the signing of a release and agreement not to compete dated October 5, 1998, and the cancellation of his outstanding options, the Executive Officer received compensation and benefits through September 2000. An accrual of $475,000 was recorded in the year ended December 31, 1998 for this obligation. Severance arrangements for members of the Operating Management Group ("OMG") were authorized by the Board of Directors on January 25, 1999. In the event of certain changes of control, severance agreements with members of the OMG would be triggered. Such agreements were signed by two members of the OMG and provide for (a) a normal severance benefit for nine (9) months, which would be increased to one (1) year after the employee has served as a member of the OMG for a continuous period of two (2) years, in the event the employee's services are terminated without cause, and (b) a severance benefit of one (1) year in the event the separation from service is due to (i) a change in control, and (ii) the employee suffers, within one (1) year thereafter, either (A) a discontinuation of duties, or (B) an office change of at least 50 miles, or (C) a reduction in compensation, or (D) a termination of employment other than for cause. (10) SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest and income taxes during the years ended December 31, 2000, 1999 and 1998 was as follows: - -------------------------------------------------------------------------------- 2000 1999 1998 Interest $ 235,000 $ 644,000 $ 292,000 ================================================= Income taxes $ 10,000 $ 60,000 $ -- ================================================= - -------------------------------------------------------------------------------- The Company had the following non-cash financing activities: During the first quarter of 2000, the Company issued 266,945 common shares upon the exercise of warrants in exchange for the retirement of $600,626 of the Company's Senior Subordinated Note due October 31, 2001. F-23 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (10), CONTINUED In August 2000, the Company issued 150,000 shares of common stock in exchange for the cancellation of 633,055 warrants to purchase common stock. During 2000, the Company recorded the cashless exercise of 47,860 options at prices ranging from $0.75 to $2.25, in exchange for 28,831 shares of common stock at prices ranging from $3.3125 to $4.01325. Such shares were held for a period of at least six months before the respective exchange. The value of these transactions was $97,000. In connection with the Company's sale of Published Research assets during 1998, the Company received a $550,000 four-year note. In March 1998, a $250,000 convertible note with a related party was converted into common stock. (11) ACCRUED EXPENSES Accrued expenses at December 31, 2000 and 1999 consisted of the following:
- -------------------------------------------------------------------------------------- 2000 1999 Accrued bonuses and employee benefits $ 403,000 $ 441,000 Accrued severance and retirement -- 176,000 Accrued expenses incurred on behalf of clients 41,000 75,000 Accrued SVP royalty 278,000 240,000 Other accrued expenses 257,000 498,000 -------------------------------- $ 979,000 $ 1,430,000 ================================ - --------------------------------------------------------------------------------------
F-24 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (12) OTHER INCOME Other income consists of the following:
- ----------------------------------------------------------------------------------------------------- 2000 1999 1998 Early termination of lease $ 139,000 $ -- $ -- Domain name assignment and trademark license agreement -- 1,200,000 -- Settlement with Asset Value and lease renegotiation -- -- 364,000 Settlement with Asset Value and lease renegotiation -- -- (315,000) -------------------------------------------------- $ 139,000 $ 1,200,000 $ 49,000 ================================================== - -----------------------------------------------------------------------------------------------------
On December 30, 1999, the Company entered into an agreement with idealab! and Find.com, Inc. whereby the Company assigned the domain name "find.com" and licensed the use of certain rights to the trademarks "find.com" and "find" to Find.com, Inc. idealab! and Find.com, Inc. are not otherwise related to the Company. Under the terms of the agreement, the Company received consideration in the form of cash and preferred shares amounting to approximately $1,200,000, net of related expenses. The Company is also entitled to certain future royalties. No royalty income was earned in the year ended December 31, 2000. The carrying value of the preferred shares is the lower of historical cost or estimated net realizable value. The non-marketable preferred share securities carry various rights including the ability to convert into common shares of Find.com and a repurchase (put) option that becomes exercisable in December 2002. Since the preferred share securities are an investment in a start-up enterprise, it is reasonably possible in the near term that the Company's estimate of the net realizable value of the preferred shares will be less than the carrying value of the preferred shares. F-25 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (13) LITIGATION On May 30, 1997, Asset Value Fund Limited Partnership ("Asset Value"), a shareholder in the Company, commenced an action in the United States District Court for the Southern District of New York entitled Asset Value Fund Limited Partnership v. FIND/SVP, Inc. and Andrew P. Garvin, Civil Action No. 97 Civ. 3977 (LAK). The complaint alleged that between October 1995 and August 1996 the Company and its president made certain oral misstatements to Paul Koether, the principal of Asset Value, concerning the financial condition of the Company and that those misstatements induced Asset Value to buy more shares of the Company and to refrain from selling the shares it already held. The complaint alleged that those misstatements give rise to causes of action for violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and for fraud, breach of fiduciary duty and negligent misrepresentation. The complaint demanded compensatory damages in excess of $1.5 million and punitive damages in excess of $5 million, as well as costs and attorneys' fees. On August 13, 1997, the Company was served with an amended complaint which alleged that between January 1996 and August 1996, the Company and its president made certain misstatements concerning the financial condition of the Company and that those misstatements induced Asset Value to buy more shares of the Company and to refrain from selling the shares it already held. The amended complaint alleged that those misstatements give rise to causes of action for violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and for common law fraud. The complaint demanded compensatory and punitive damages in an amount to be determined at trial, as well as costs and attorneys' fees. On September 29, 1997, the Company and Mr. Garvin moved to dismiss the amended complaint. On December 3, 1997, Asset Value commenced an action in the Supreme Court of the State of New York, County of New York entitled Asset Value Fund Limited Partnership v. Brigitte De Gastines and Jean-Louis Bodmer, Index No. 606165/97. The defendants are two of the Company's directors. The complaint sought to remove the defendants as directors under New York Business Corporation Law 706(d) because of their alleged failure to attend meetings of the board and because they considered and approved financing transactions by the Company involving Amalia, S.A. and/or SVP, S.A which allegedly constituted self-dealing by the defendants. On December 30, 1997, the defendants removed this action to the United States District Court for the Southern District of New York. F-26 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (13), CONTINUED On January 20, 1998, Asset Value and the Company entered into a settlement agreement pursuant to which Asset Value dismissed with prejudice the two pending actions described above. Furthermore, Asset Value agreed that for five years neither Asset Value nor Paul Koether will purchase, either directly or indirectly, any shares of stock in the Company, or own or control, either directly or indirectly, any shares of stock in the Company. As part of the settlement, the Company purchased 274,400 shares of the Company's common stock from the plaintiff for $1.25 per share, totaling $343,000. The purchase price contained a premium of $0.50 per share over the closing trade price of the Company's common stock on the date of settlement, or $137,000. As a result of the above, the Company recorded treasury stock of $206,000 and expense of $137,000. The Company used proceeds from its insurance company of $495,000 to purchase the shares and to pay plaintiff and Company legal fees in the amount of $110,000 and $42,000, respectively. Accordingly, the Company recorded other income and other expense of $289,000, respectively, in the year ended December 31, 1998, related to this matter, with the remaining balance of $206,000 offset against the aforementioned treasury stock repurchase amount, thus reducing the net treasury stock to zero. (14) IMPAIRMENT LOSS AND ASSET DISPOSAL During the fourth quarter of 1997, the Company decided to sell the majority of assets held in its Published Research subsidiary and recorded an impairment loss of $1,047,000 in December 1997. In July 1998, the Company completed the sale of substantially all of the assets of its Published Research subsidiary and recorded a $20,000 gain. The Company received $1,250,000 in cash, a Promissory Note (the "Note") in the amount of $550,000 and the purchaser assumed certain liabilities in the amount of $85,000. The Note bears interest at a rate of 8% per annum and is payable in four equal annual installments of principal and interest beginning in June 1999. The Company holds a subordinate security interest in the sold assets, and has the personal guarantee of a principal of the purchaser. During the fourth quarter of 1997, the Company ceased the consumer oriented operation of its FIND/SVP Internet Services, Inc. subsidiary. Accordingly, the Company recorded a charge of $500,000 in the fourth quarter of 1997 related to the closing of the subsidiary. The charge included $35,000 of severance, all of which was paid by March 31, 1998. During the second quarter of 1998 the Company received payment of $75,000 from the landlord in return for the forfeiture of the lease. The Company also had rental expenses of $26,400 during the second quarter of 1998, prior to the agreement with the landlord. The $75,000 was recorded as Other Income and the $26,400 was recorded as Other Expense in 1998. F-27 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (15) RESTRUCTURING CHARGE On March 27, 1998, the Company reduced its full-time labor force in its core business by 20 positions. As a result the Company recorded a restructuring charge of $321,000 during the quarter ended March 31, 1998. The charge consisted mainly of severance payments, outplacement services and legal costs associated with the elimination of the positions, all of which was paid as of December 31, 1999. (16) SEGMENT REPORTING During the year ended December 31, 2000, the Company began measuring its consulting and business advisory services in two business segments: Quick Consulting and Strategic Consulting. Corresponding information for the years ended December 31, 1999 and 1998 have been disaggregated to provide comparative information. The Company operates primarily in the United States. Prior to the divestiture in the third quarter of 1998, the Company had one additional segment, Published Research Products. The Company considers its quick consulting and strategic consulting services to be its core competency. Corporate and other relates to assets and activities that are not allocated to a segment. F-28 FIND/SVP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements, Continued (16), CONTINUED
- --------------------------------------------------------------------------------------------------------------------- (in thousands) YEARS ENDED DECEMBER 31, ------------------------ 2000 1999 1998 ---- ---- ---- REVENUES Quick Consulting $ 19,930 $ 18,851 $ 20,714 Strategic Consulting 3,870 3,887 4,743 Published Research Products -- -- 2,718 -------------------------------------------- Total revenues $ 23,800 $ 22,738 $ 28,175 ============================================ OPERATING (LOSS) INCOME Quick Consulting (1) $ 4,545 $ 4,680 $ 5,965 Strategic Consulting (58) 156 403 Published Research Products -- -- 16 -------------------------------------------- Segment operating (loss) income 4,487 4,836 6,384 Corporate and other (2) (5,318) (3,664) (5,423) -------------------------------------------- (Loss) income before (benefit) provision for income taxes $ (831) $ 1,172 $ 961 ============================================ DEPRECIATION AND AMORTIZATION Quick Consulting $ 583 $ 520 $ 440 Strategic Consulting 68 69 61 Published Research Products -- -- 96 -------------------------------------------- Total segment depreciation and amortization 651 589 597 Corporate and other 531 516 547 -------------------------------------------- Total depreciation and amortization $ 1,182 $ 1,105 $ 1,144 ============================================ TOTAL ASSETS Quick Consulting $ 3,406 $ 3,352 Strategic Consulting 843 735 Published Research Products -- -- ------------------------------ Total segment assets 4,249 4,087 Corporate and other 6,534 7,191 ------------------------------ Total assets $ 10,783 $11,278 ============================== CAPITAL EXPENDITURES Quick Consulting $ 160 $ 218 $ 478 Strategic Consulting 30 25 74 -------------------------------------------- Total segment capital expenditures 190 243 552 Corporate and other 380 429 66 -------------------------------------------- Total capital expenditures $ 570 $ 672 $ 618 ============================================
(1) Operating income for the year ended December 31, 1998 includes a restructuring charge for severance and related costs of $321,000. (2) Includes interest income, other income, gain on sale of net assets, interest expense and other expense. - -------------------------------------------------------------------------------- F-29 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL SCHEDULE To the Board of Directors and Shareholders of Find/SVP, Inc. Our audits were conducted for the purpose of forming an opinion on the basic financial statements as of and for the years ended December 31, 2000 and 1999, taken as a whole. The data shown on the supplemental schedule on page F-31 for the years ended December 31, 2000 and 1999 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. This schedule is the responsibility of the Company's management. Such data has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. Deloitte & Touche LLP Stamford, Connecticut March 28, 2001 F-30 Schedule II FIND/SVP, INC. AND SUBSIDIARIES Valuation and Qualifying Accounts Years ended December 31, 2000, 1999 and 1998 (in thousands of dollars)
Balance at Additions beginning charged to Deduc- Balance at CLASSIFICATION of year earnings tions (1) end of year ------- -------- --------- ----------- Year ended December 31, 2000: Allowance for doubtful accounts $ 101 $ 217 $ 217 $ 101 === === === === Year ended December 31, 1999: Allowance for doubtful accounts $ 104 $ 90 $ 93 $ 101 === === === === Year ended December 31, 1998: Allowance for doubtful accounts $ 118 $ 164 $ 178 $ 104 === === === ===
Note: (1) Amounts written off, net of recoveries. F-31 EX-23 2 c20460-ex23.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23 PART I INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference of our reports dated March 28, 2001, appearing in this Annual Report on Form 10-K of Find/SVP, Inc. for the year ended December 31, 2000, in the following registration statements of Find/SVP, Inc.: Registration Statement No. 33-42746 on Form S-8 (pertaining to the Find/SVP, Inc. 1986 Stock Option Plan); Registration Statement No. 333-22439 on Form S-8 (pertaining to the Find/SVP, Inc. 1986 Stock Option Plan); Registration Statement No. 333-22445 on Form S-8 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan); and Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 No. 333-68315 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan). We consent to the incorporation by reference in Registration Statement No. 333-43940 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan) of Find/SVP, Inc. on Form S-8 of our reports dated March 28, 2001, that have been incorporated by reference from Registration Statement No. 333-22445 on Form S-8 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan), and that originally appear in this Annual Report on Form 10-K of Find/SVP, Inc. for the year ended December 31, 2000. Deloitte & Touche LLP Stamford, Connecticut March 28, 2001 EX-23.2 3 c20460ex23-2.txt INDEPENDENT AUDITORS' CONSENT PART II EXHIBIT 23 PART II INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference of our report dated February 22, 1999 relating to the consolidated statements of operations, shareholders equity, and cash flows of Find/SVP, Inc. and subsidiaries for the year ended December 31, 1998, appearing in this Annual Report on Form 10-K of Find/SVP, Inc. for the year ended December 31, 2000, in the following registration statements of Find/SVP, Inc.: Registration Statement No. 33-42746 on Form S-8 (pertaining to the Find/SVP, Inc. 1986 Stock Option Plan); Registration Statement No. 333-22439 on Form S-8 (pertaining to the Find/SVP, Inc. 1986 Stock Option Plan); Registration Statement No. 333-22445 on Form S-8 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan); Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 No. 333-68315 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan): and Registration Statement No. 333-43940 (pertaining to the Find/SVP, Inc. 1996 Stock Option Plan). KPMG LLP New York, New York March 28, 2001 -----END PRIVACY-ENHANCED MESSAGE-----