8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 18, 2007

Guideline, Inc.

(Exact Name of Registrant as Specified in its Charter)

New York	0-15152	13-2670985
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer 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

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition

On April 18, 2007, Guideline, Inc. (the “Registrant”) issued a press release (the “Press Release”) announcing its earnings for the fiscal quarter and year ended December 31, 2006. A copy of the Press Release is furnished herewith as Exhibit 99.1 and incorporated herein by reference. The information in this Item 2.02 of Form 8-K and Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing. The Press Release contains financial measures that are not in accordance with generally accepted accounting principles in the United States ("GAAP"). The Registrant has provided a reconciliation within the Press Release of the non-GAAP financial measures to net income, the most directly comparable GAAP financial measure. EBITDA, which is defined as the Registrant’s net income (loss) before interest, income taxes, depreciation and amortization, and Adjusted EBITDA, which is defined as the Registrant’s net income (loss) before interest, income taxes, depreciation and amortization and other non-recurring charges, are presented in the Press Release because the Registrant's credit facility, which contains a term note totaling $4,500,000, maturing in 2010, and a revolving loan facility totaling $4,500,000, includes financial and other covenants which are based on or refer to the Registrant's EBITDA and Adjusted EBITDA. Management also believes that EBITDA and Adjusted EBITDA are useful measures to investors, allowing them to focus on the Registrant’s recurring results of operations. Additionally, management believes that EBITDA and Adjusted EBITDA are common alternatives to measuring operating performance used by investors and financial analysts to measure value, cash flow and performance. The non-GAAP financial measures described above should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP that are presented in the Press Release.

Item 9.01.Financial Statements and Exhibits.

(d)Exhibits.

Exhibit	Description
99.1	Press Release dated April 18, 2007 with respect to the Registrant’s financial results for the fiscal quarter and year ended December 31, 2006 (furnished only).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Guideline, Inc.
Date: April 18, 2007	By:	/s/ Peter Stone
		Name: Peter Stone
		Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description
99.1	Press Release dated April 18, 2007 with respect to the Registrant’s financial results for the fiscal quarter and year ended December 31, 2006 (furnished only).

EX-99.1

Exhibit 99.1

Investor and Press Contact:

Scott Gerard

212-645-4500

Investorrelations@guideline.com

Guideline, Inc. Reports Fourth Quarter and Year-end

Financial Results

-- Company Posts 135% Increase in Net Income and

35% Increase in EBITDA* for the Year --

-- Cash Flow from Operations up 30% for the Year -

--Reports Substantial Improvement in On-Demand Retainer Base--

NEW YORK, April 18, 2007—Guideline, Inc. (OTCBB: GDLN), the nation’s only single-source provider of custom business research, today announced financial results for the fourth quarter and year ended December 31, 2006.

Revenues for the year ended December 31, 2006 were $46,285,000, an increase of 8% versus revenues of $43,034,000 in the prior year. Net income attributable to common shareholders for the year ended December 31, 2006 increased 135% to $970,000 or $0.05 per basic and fully diluted share as compared to net income attributable to common shareholders of $412,000, or $0.02 per basic and fully diluted share in the prior year.

EBITDA* and Adjusted EBITDA* for the year ended December 31, 2006 were $3,250,000 and $3,589,000, respectively, compared to EBITDA* and Adjusted EBITDA* of $2,413,000 and $3,479,000, respectively, in the prior year. Operating income for the year ended December 31, 2006 of $917,000 represents a 7% decrease compared to operating income of $983,000 in the prior year. EBITDA* and Adjusted EBITDA* exclusive of non-cash stock compensation expense for the year ended December 31, 2006 were $4,042,000 and $4,381,000, respectively, representing increases of 33% and 7% compared to $3,044,000 and $4,110,000, respectively, in the same period of the prior year.

During the year ended December 31, 2006, Guideline recognized a pre-tax gain of $626,000 resulting from proceeds received related to its prior proportionate minority ownership interest in Strategic Research Institute which was sold. This gain is excluded from the computation of Adjusted EBITDA* reported above.

Revenues in the fourth quarter of 2006 increased 1% to $11,614,000, versus revenues of $11,486,000 in the same period of the prior year. Net loss attributable to common shareholders for the fourth quarter was ($87,000) or ($0.00) per basic and fully diluted share, compared to income of $513,000, or $0.03 and $0.02 per basic and fully diluted share, respectively, in the fourth quarter of the prior year.

EBITDA* and Adjusted EBITDA* for the quarter were $221,000 and $652,000, respectively, as compared to EBITDA* and Adjusted EBITDA* of $1,046,000 in the prior year. Operating loss was ($366,000) for the quarter compared to operating income of $452,000 in the fourth quarter of the prior year. EBITDA* and Adjusted EBITDA* exclusive of non-cash stock compensation expense for the quarter were $343,000 and $774,000, respectively, compared to $1,194,000 in the fourth quarter of the prior year.

As of December 31, 2006, Guideline, Inc. had cash on hand of $2,939,000 (and approximately $2,000,000 available under its revolving line of credit), short and long term debt of $2,005,000 and $2,384,000, respectively, and shareholders’ equity of $23,209,000. Cash flow from operations for the year ended December 31, 2006 was $3,542,000, a 30% increase over the reported $2,715,000 in cash flow for the year ended December 31, 2005.

David Walke, Chairman and CEO of Guideline, commented, “I am pleased that Guideline achieved healthy gains in 2006 in revenues, net income and Adjusted EBITDA* relative to actual results in the prior year, despite a somewhat disappointing performance in the fourth quarter of the year.

“In particular, the weak fourth quarter was largely due to two factors. First and foremost, our senior management team devoted a considerable amount of time toward a significant acquisition opportunity which ultimately could not be completed”, Mr. Walke said. “While we are comfortable with this outcome, there were significant legal and other costs recognized during the quarter associated with this transaction.”

“In addition, performance at our Strategic Intelligence business unit in Washington, DC was soft in the quarter, after solid performance by this unit through the first nine months of the year. Although our other business units performed well during the quarter, we couldn’t fully offset this unit’s weakness”, Mr. Walke continued.

“I am particularly pleased to report that as a consequence of new product introductions and revised pricing strategies, Our On-Demand retainer-based business exhibited substantial improvement and progress in 2006,” Mr. Walke said. “Specifically, we achieved a net gain in annualized retainer base of just under 2% for the second half of the year. The third and fourth quarters of 2006 represented the first quarters of positive net gain in four years.

Moreover, this positive net gain trend continued into the first quarter of 2007, also the first time that has occurred during this period in several years. This was accomplished while our average annual retainer rate increased 6.5% for the year. This trend also continued into the first quarter of 2007.”

Looking ahead, Mr. Walke said, “We believe there are several good things happening at Guideline, and there is clear reason to believe that as the year unfolds we will see further tangible benefits of our strategies and initiatives. All in all, I remain optimistic about the longer term prospects of our Company.”

*We believe EBITDA and Adjusted EBITDA, which are defined as net income (loss) before interest, income taxes, and depreciation and amortization and net income (loss) before interest, income taxes, and depreciation and amortization and other non-recurring charges, respectively, are useful measures to investors, allowing them to focus on our recurring results of operations, and are common alternatives to measuring operating performance used by investors and financial analysts to measure value, cash flow and performance. Also, our credit facility, which contains a term note totaling $4,500,000, maturing in 2010, and a revolving loan facility totaling $4,500,000, includes financial and other covenants which are based on or refer to EBITDA and Adjusted EBITDA. The non-GAAP financial measures described above should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Pursuant to the requirements of Regulation G, Guideline has provided reconciliations in the attached financial information for the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Earnings Conference Call Information

Management will host a conference call today at 4:15 PM ET to review the financial results for the fourth quarter and year ended December 31, 2006. The dial-in number for the conference call is (800) 322-9079 and the meeting code is: 8701530. A taped replay of the conference call will also be available beginning approximately two hours after the call's conclusion and will remain available for five business days. It can be accessed by dialing 877-519-4471, using the passcode 8701530. To access the live and/or archived webcast of the call, please go http://www.guideline.com.

About Guideline, Inc.

Guideline, Inc. (OTC Bulletin Board: GDLN) is the nation's only single-source provider of customized business research and analysis. Through its end-to-end continuum of On-Demand Business Research, Custom Market Research, Strategic Intelligence, and Product Development Intelligence. Guideline's research analysts create integrated solutions that enable clients to make informed decisions to address their critical business needs. Guideline specializes in nearly all major industries, including media and entertainment, healthcare and pharmaceuticals, financial and business services and consumer products. Guideline, Inc. is located at 625 Avenue of the Americas, New York, N.Y. 10011. More information is available by calling 212-645-4500 or visiting www.guideline.com.

# # #

Forward-Looking Statements

Note: This news release contains “forward-looking statements” within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding the outlook for the Company’s markets and the demand for its products and services, earnings per share, cash flows from operations, future revenues and margin requirement and expansion, growth of our annual retainer business, benefits of our strategies and initiatives, the success of new products and services introductions, growth in costs and expenses and the impact of acquisitions, divestitures, restructurings and other unusual items, including the Company’s ability to integrate and obtain the anticipated results and synergies from its acquisitions. These projections and statements are based on management’s estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Company’s periodic and other reports filed with the Securities and Exchange Commission.

GUIDELINE, INC. COMPARATIVE

STATEMENTS OF INCOME (LOSS)

	Twelve Months Ended December 31
	2006		2005
Revenue	$	46,285,000	$	43,034,000
Operating income6	$	917,000	$	983,000
EBITDA1, 2,3	$	3,250,000	$	2,413,000
Adjusted EBITDA1, 2,3	$	3,589,000	$	3,479,000
Income Before Income Taxes and Cumulative Effect of Accounting Change	$	1,099,000	$	663,000
Income tax provision	$	161,000	$	211,000
Cumulative effect of accounting change4	$	96,000	$	—
Net income	$	1,034,000	$	452,000
Income attributable to common shareholders’5	$	970,000	$	412,000
Income (Loss) Per Share - Basic & Diluted	$	0.05	$	0.02
Weighted Average Shares
Outstanding - Basic		20,677,503		20,045,754
Outstanding - Diluted		20,677,503		21,631,472

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (unaudited):

¹EBITDA and Adjusted EBITDA (000’s omitted) for the twelve months ended December 31, 2006 is as follows:

Net income	$	1,034
Tax provision		161
Depreciation and amortization		1,550
Interest expense		601
Cumulative effect of accounting change		(96	)
EBITDA	$	3,250
Non-recurring acquisition related costs		320
Proceeds from sale of investment partnership		(626	)
Name change related costs		187
Nonrecurring rent and other facility charges		137
Severance		50
Other		271
Adjusted EBITDA	$	3,589

²EBITDA and Adjusted EBITDA (000’s omitted) for the twelve months ended December 31, 2005 is as follows:

Net income	$	452
Tax provision		211
Depreciation and amortization		1,349
Interest expense		401
EBITDA	$	2,413
Non-recurring severance related to restructuring		909
Acquisition related integration costs		109
Sarbanes-Oxley 404 implementation fees		50
Other		(2	)
Adjusted EBITDA	$	3,479

³EBITDA and Adjusted EBITDA for the twelve months ended December 31, 2006, was $4,042,000 and $4,381,000, respectively, exclusive of $792,000 of non-cash stock compensation expense, and for the twelve months ended December 31, 2005 EBITDA and Adjusted EBITDA was $3,044,000 and $4,110,000, respectively, exclusive of $631,000 of non-cash stock compensation expense.

⁴During the first quarter of 2006, Guideline adopted the revised Statement of Financial Accounting Standards No. 123, “Share-Based Payments” (“SFAS 123 (R)”). As a result of adopting SFAS 123(R), Guideline recognized a before and after-tax gain of approximately $96,000 representing the cumulative effect of a change in accounting principle attributable to the requirement under SFAS 123(R) to estimate forfeitures at the grant date instead of recognizing them as incurred.

⁵Net income for the twelve months ended December 31, 2006 of $1,034,000 was reduced by preferred dividends of $64,000, resulting in net income attributable to common shareholders of $970,000.

⁶The pre-tax gain of $626,000 resulting from proceeds received from Strategic Research Institute is not included in operating income.

GUIDELINE, INC. COMPARATIVE

STATEMENTS OF INCOME (LOSS)

(unaudited)

	Three Months Ended December 31
	2006			2005
Revenue	$	11,614,000		$	11,486,000
Operating (loss) income		($366,000	)	$	452,000
EBITDA1, 2,3	$	221,000		$	1,046,000
Adjusted EBITDA1, 2,3	$	652,000		$	1,046,000
(Loss) Income Before Income Taxes		($362,000	)	$	460,000
Income tax benefit	$	288,000		$	63,000
Net (loss) income		($74,000	)	$	523,000
(Loss) Income attributable to common shareholders’4		($87,000	)	$	513,000
(Loss) Income Per Share - Basic		($0.00	)	$	0.03
(Loss) Income Per Share - Diluted		($0.00	)	$	0.02
Weighted Average Shares
Outstanding - Basic		20,470,240			20,302,427
Outstanding - Diluted		20,470,240			21,759,426

Reconciliation of Net Income to EBITDA and Adjusted EBITDA (unaudited):

¹EBITDA and Adjusted EBITDA (000’s omitted) for the three months ended December 31, 2006 is as follows:

Net loss	$	(74	)
Tax benefit		(288	)
Depreciation and amortization		435
Interest expense		148
EBITDA	$	221
Non-recurring acquisition related costs		300
Name change related costs		22
Other		109
Adjusted EBITDA	$	652

²EBITDA and Adjusted EBITDA (000’s omitted) for the three months ended December 31, 2005 is as follows:

Net income	$	523
Tax benefit		(63	)
Depreciation and amortization		444
Interest expense		142
EBITDA and Adjusted EBITDA	$	1,046

³EBITDA and Adjusted EBITDA for the quarter ended December 31, 2006, was $343,000 and $774,000, respectively, exclusive of $122,000 of non-cash stock compensation expense, and EBITDA and Adjusted EBITDA for the quarter ended December 31, 2005 was $1,194,000, exclusive of $148,000 of non-cash stock compensation expense.

⁴Net loss for the three months ended December 31, 2006 of ($74,000) was reduced by preferred dividends of $13,000, resulting in net loss attributable to common shareholders of ($87,000).

GUIDELINE, INC. ESTIMATED PRO FORMA FINANCIAL DATA

(unaudited)

	Twelve Months Ended December 31
	2005
Revenue	$	45,519,000
Net income	$	402,000
EBITDA1,2	$	2,671,000
Adjusted EBITDA1, 2	$	3,854,000

¹Pro Forma Adjusted EBITDA (000’s omitted) for the twelve months ended December 31, 2005 is as follows:

Pro Forma Net income	$	402
Tax provision (benefit)		365
Depreciation and amortization		1,372
Interest expense		532
Pro Forma EBITDA	$	2,671
Non-recurring severance related to restructuring		909
Acquisition related integration costs		109
Sarbanes-Oxley 404 implementation fees		50
Other		115
Pro Forma Adjusted EBITDA	$	3,854

²Exclusive of $631,000 of stock compensation expense for the twelve months ended December 31, 2005, Pro Forma EBITDA and Pro Forma Adjusted EBITDA would have been $3,302,000 and $4,485,000, respectively. Furthermore, of the $631,000 of stock compensation expense, approximately $567,000 is not tax deductible and is therefore added back to pre-tax income for purposes of calculating the income tax provision.

GUIDELINE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

	December 31		December 31
	2006		2005
Assets
Cash and cash equivalents	$	2,939,000	$	2,697,000
Accounts receivable, net		9,483,000		8,646,000
Deferred tax assets		311,000		326,000
Prepaid expenses and other current assets		657,000		671,000
Total Current Assets		13,390,000		12,340,000
Property, Plant & Equipment, net		2,228,000		2,572,000
Goodwill, net		21,322,000		18,245,000
Intangibles, net		2,137,000		2,522,000
Deferred tax assets		—		682,000
Deferred financing fees, net		504,000		647,000
Other assets		585,000		834,000
Total assets	$	40,166,000	$	37,842,000
Liabilities and Shareholders' Equity
Trade accounts payable	$	2,820,000	$	2,425,000
Accrued expenses and other		4,425,000		2,318,000
Unearned retainer income		4,351,000		4,311,000
Current maturities of notes payable		2,005,000		3,005,000
Total current liabilities		13,601,000		12,059,000
Notes payable		2,384,000		3,389,000
Deferred compensation and other liabilities		298,000		456,000
Total liabilities		16,283,000		15,904,000
Redeemable, convertible, preferred stock		674,000		610,000
Shareholders' Equity		23,209,000		21,328,000
Total Liabilities and Shareholders' Equity	$	40,166,000	$	37,842,000