SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended August 31, 1996
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 Number: 2-91525-NY
MARKET GUIDE INC.
(Exact name of Registrant as specified in its charter)
New York 11-2646081
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
2001 Marcus Avenue
Suite South 200
Lake Success, New York 11042-1011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code:
(516) 327-2400
(Former name, former address and former fiscal year, if changed since
last report)
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 _______
4,195,153 Common shares, $.001 par value were issued and
outstanding on October 11, 1996.
Table of Contents
Financial Statements
Balance Sheets as of August 31, 1996
(Unaudited) and February 29, 1996 3
Statement of Operations for the Three and Six Months Ended August
31, 1996 (Unaudited) and August 31, 1995 (Unaudited)5
Statement of Cash Flows for the Six Months Ended
August 31, 1996 (Unaudited) and August 31, 1995 (Unaudited)6
Notes to Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations August 31, 1996 8
Other Information 17
Signature 18
Balance Sheets Market Guide Inc.
August 31, February 29,
1996 1996
(Unaudited)
ASSETS
Current assets:
Cash $ 1,081,977 $ 680,783
Accounts Receivable (Net of
allowance for doubtful accounts) 447,170 761,180
Prepaid expenses and other current 313,079 305,414
assets
Total current assets 1,842,226 1,747,377
Property, plant and equipment:
Furniture and equipment 629,494 593,981
Equipment held under capital leases 687,693 543,655
1,317,187 1,137,636
Less: Accumulated depreciation and
amortization (including amortization of
$207,819 and $154,233 591,900 501,538
as of August 31, 1996 and February 29, 1996,
respectively, on capital leases)
Net property, plant and 725,287 636,098
equipment
Other assets:
Computer Software and Product
Enhancements (Net of Accumulated
Amortization) 1,194,989 1,066,006
Deposits and other assets 121,791 123,536
Total other assets 1,316,780 1,189,542
Total assets $ 3,884,293 $ 3,573,017
Balance Sheets - continued
Market Guide Inc.
August 31, February
29, Fiscal Quarter Ended 1996 1996
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current maturities of long-term
debt
and capital leases including
related $ 246,127 $ 208,359
party debt of $95,333 as of
August 31, 1996 and $95,333 as of February 29,
1996.
Unearned revenues 334,464 163,371
Accounts payable and other
accrued expenses (including accrued
interest 238,400 401,546
of $61,987 as of August 31, 1996
and $61,987 as of February 29,
1996)
Total current liabilities 818,991 773,276
Non-current liabilities:
Long-term debt and capital lease
obligations, less current 420,659 351,511
maturities
Total non-current liabilities 420,659 351,511
Commitments 0 0
Total liabilities 1,239,650 1,124,787
Stockholders' equity:
Common stock - $.001 par value;
20,000,000 shares authorized,
4,195,153
and 4,188,245 shares issued and
outstanding 4,195 4,188
as of August 31, 1996 and
February 29, 1996,
respectively.
Capital in excess of par value 3,640,163 3,618,910
Accumulated deficit (999,715) (1,174,868)
Total stockholders' equity 2,644,643 2,448,230
Total liabilities and $ 3,884,293 $ 3,573,017
stockholders' equity
Statement of Operations
For the Six Months For the Three Months Ended
August August August August
31, 1996 31, 1995 31, 1996 31, 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Database vendors $ 2,036,493 $ 1,700,907 $ 1,002,632 $ 878,042
Market Guide 182,134 127,192 101,630 76,487
products
Print products 29,627 32,822 12,886 16,051
Total revenues 2,248,254 1,860,921 1,117,148 970,580
Expenses
Salaries, payroll taxes 1,262,124 1,043,438 626,979 540,817
and employee benefits
Database and product costs 340,893 267,709 197,614 135,426
General and admin. 391,680 303,454 218,704 160,871
Advertising and promotion 58,116 42,832 28,783 17,072
Total expenses 2,052,813 1,657,433 1,072,080 854,186
Income from operations 195,441 203,488 45,068 116,394
Interest income 14,884 12,096 8,308 5,632
Interest expenses 33,202 24,416 15,284 12,830
Income before taxes 177,123 191,168 38,092 109,196
Provision for taxes 1,970 12,562 650 7,644
Net income $ 175,153 $ 178,606 $ 37,442 $ 101,552
Earnings per share $ .04 $ .04 $ .01 $ .02
Weighted average number
of shares outstanding 4,190,167 4,145,603 4,192,088 4,174,47
Fully diluted $ .04 $ .04 $ .01 $ .02
earnings per share
Fully diluted weighted
average number of shares 4,373,596 4,393,187 4,375,517 4,409,170
outstanding
Statement of Cash Flows Market Guide Inc.
August 31, August 31,
For the Six Months Ended 1996 1995
(Unaudited)
(Unaudited) Cash Flows From Operating Activities:
Net Income $ 175,153 $ 178,606
Adjustments to reconcile net income
to net cash provided from operating
activities
Depreciation and amortization 231,690 173,218
Changes in Assets and Liabilities:
(Increase)/Decrease in accounts 314,010 (85,169)
receivable
(Increase)/Decrease in prepaid (7,665) (19,679)
assets
(Increase)/Decrease in deposits 1,745 (15,671)
and other assets
Increase/(Decrease) in accounts (163,146) 104,089
payable
Increase/(Decrease) in unearned 171,093 (42,095)
revenues
Total adjustments 547,727 114,693
Net cash from operating activities $ 722,880 $ 293,299
Cash Flows From Investing
Activities:
$ (179,551) $ (219,418)
Payment for purchase of fixed
assets
Development of Computer Software
and (270,309) (206,708)
Product Enhancements
Net cash from investing activities $ (449,860) $ (426,126)
Cash Flows From Financing
Activities:
Payments for notes payable, long-
term debt and capital leases (81,925) (38,829)
Proceeds from capital leases 188,839 179,532
Proceeds from issuance of employee 21,260 64,129
stock plan
Proceeds from private placement of 0 12,772
common stock
Net cash from financing activities 128,174 217,604
Net increase/(decrease) in cash 401,194 84,777
Cash at beginning of period 680,783 695,135
Cash at end of period $ 1,081,977 $ 779,912
Market Guide Inc.
Notes to Financial Statements
August 31, 1996
Note 1 INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Market Guide Inc.
have not been audited by independents accountants, except
for the balance sheet as of February 29, 1996. In the
opinion of
management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the
three and six months ended August 31, 1996 are not
necessarily indicative of the results that may be expected
for the year ending February 28, 1997.
Note 2 REVERSE STOCK SPLIT
On August 31, 1995, the stockholders approved a one-for-
four reverse stock split of the Company's $.001 par value
common stock. The reverse stock split was implemented as of
October 16, 1995. All references in the accompanying financial
statements to per share amounts and number of shares have
been restated to reflect the reverse stock split for all
periods presented.
Market Guide Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
August 31, 1996
General
This analysis of the Company's financial condition,
capital resources and operating results should be viewed in
conjunction with the accompanying financial statements.
Business
Market Guide Inc. was incorporated in the State of New York
on March 23, 1983 as "The Unlisted Market Service Corporation."
On September 3, 1986 the current corporate name was adopted.
The Company acquires, condenses and publishes accurate,
timely, and objective financial and other information on
publicly traded corporations, and markets this information to
the financial and investment communities, as well as to
independent investors, in a cost effective manner.
The Market Guide Database covers over 7,500 companies trading
on the New York, American, Nasdaq and Over-the-Counter
Stock Exchanges. All reports created by Market Guide Inc. are
derived from information filed by the subject company with the
Securities and Exchange Commission contained in Annual and
Quarterly Reports to stockholders, issued in press releases
or carried in other media reports. Each company's
information is updated at least four and often more than
eight times a year, as soon as relevant information becomes
available. Pricing and trading volume information
incorporated into the database are updated daily, and short
interest statistics are updated monthly.
Market Guide adds value, distinguishes itself from
the competition, and serves its clients through its:
Flexible database design which gives users
important
insights not available in competitive databases,
thereby enabling them to make better informed investment
decisions;
Inclusion of auxiliary information such as
earnings
estimates, price performance, relative price
performance, summary insider and institutional ownership
statistics, and short interest statistics giving
users a complete
perspective on each company;
Calculation of approximately 500 popular financial
ratios,
growth rates, and averages computed for the
user's convenience; and
Carefully planned, market tested display formats,
including
company to industry comparisons, that allow users to
quickly and efficiently make carefully considered
investment decisions.
The targeted markets for Market Guide's data and related
products include investment managers, investment research
departments, financial planners, investment counselors,
investment bankers, banks, stockbrokers and brokerage
firms, traders, libraries, publications, corporations, law
firms and individual investors. The Company sells its
information through four channels: information vendors, the
Internet, Market Guide for Windows (its proprietary analytic
software) and a print publication.
Vendors
Market Guide works in partnership with financial
information service vendors. The financial information
service vendors combine data from various real-time and
historical information sources with their own analytic
software and data delivery capability. Their sales forces
sell the product and they also provide customer training
and support services. Market Guide focuses on developing
the highest quality information and leveraging off the
information vendor's sales force, software, information
dissemination infrastructure and customer base. The amount
of data presented, its display format, and the software's
analytic capabilities vary depending upon the way
each
information provider defines its customers' needs,
software capabilities, distribution technologies and
preferred pricing strategies.
Information service vendors currently distributing the
Market Guide Database include: Accutrade; American
Association of Individual Investors; Argus Research;
Aufhauser; Automatic Data Processing; AIQ Systems, Inc.;
Bridge Information Systems Inc.; CDA Technology; Charles
Schwab and Company; Dow Jones Telerate; First Call
Corporation; Global Market Information; Holt Value
Associates; ILX Systems Inc.; Instinet Analytics;
Interactive Data Corporation; InvesText; Omega Research,
Inc.; OneSource Information Systems, Inc.; P.C. Quote, Inc.;
Prodigy Services Company; Quotron Systems, Inc.; Real
Time Quotes, Inc.;
Securities Data Corporation; Shark Information Services,
Inc.; Telemet America, Inc.; Telescan, Inc.; Track Data
Corporation; Trans-Terra Company and Vickers Stock Research
Corporation.
Contractual Developments
In July 1992, Market Guide entered into a database
distribution agreement with OneSource Information Services
Inc. OneSource distributes a "Reference" Product Line
and an "Investment" Product Line using Market Guide data.
OneSource Information Services, Inc. has multiple CD-ROM and
Internet based product lines that have different
software capabilities and serve different marketplaces.
The Market Guide Database is the only database that we are
aware of that is available on three OneSource product
lines, CD/Corporate, CD/Notes
and
CD/Investment.
During the 1993 and 1994 fiscal years AIQ Systems, Inc.,
Dial Data, Dow Jones Telerate, First Call Corporation,
Instinet Analytics, and Interactive Data Corporation began
distributing Market Guide information.
On December 28, 1993, it was announced that Prodigy
Services Company had reached an agreement with the Company to
incorporate selected items from the Market Guide Database
for use in Prodigy's Strategic Investor product. In
January, 1995 Prodigy introduced completely revised and
greatly enhanced Company Reports and a new "Stock Hunter"
search capability that features eight predesigned screens
utilizing recognized investment
theories such as CANSLIM, One up on Wall Street, Graham and
Dodd, Wallflowers and others. There is also a "Personal
Search" feature which enables users to conduct a self-
designed screen search of Market Guide data using six pre-
selected criteria. All these Prodigy products are created from
Market Guide information and earnings estimates from Zack's
Investment Services. The Zacks information is first sent to
Market Guide, integrated with our own information and sent to
Prodigy as an integrated data feed. Company Reports, Stock
Hunter and Personal Search may be accessed by any Prodigy
subscriber for a modest per access fee, or are available to
Strategic Investor users as part of their monthly
subscription.
In August, 1995 the Company announced an agreement with
the American Association of Individual Investors (AAII) whereby
AAII will incorporate Market Guide's information into their
existing screening software known as Stock Investor. AAII
is an educational not for profit corporation with
approximately 110,000 members, a small percentage of whom
subscribe to Stock Investor. Market Guide's information first
appeared with Stock Investor's regular quarterly update in
November, 1995.
In June, 1996 the Company announced a multi-year contract
with Reuters Limited which grants Reuters' worldwide use of
Market Guide's financial database. To date, this agreement
represents the largest single contract in Market Guide's history
Market Guide for Windows
In the fiscal year ended February 1996, the Company
introduced Market Guide for Windows (MGW), an analytic software
package. The powerful, sophisticated and easy to use software
allows users to search the database, develop user defined
reports and download information to popular spreadsheet
packages. The software and content are continuously enhanced
to reflect customer feedback, additional data items, and
software revisions.
In the second half of fiscal 1997, scheduled enhancements to
MGW include: Eleven years and nine quarters of `as-reported'
annual income statements, balance sheets, and cash flow
statements; Bond ratings provided by Fitch Investors Services;
Additional data items for screening purposes; and increased
Industry and Index statistics. These new items will be
available for screening, reporting, and downloading purposes.
Sales of MGW continue to grow in both the portfolio
management segment and the institutional marketplace. Chase
Bank, one of the first users of MGW, continues to use our
product in its global banking division.
Internet
In the second quarter of fiscal 1997, the Company
officially opened its Internet site to the public. The Market
Guide site contains:
Several different proprietary research reports created by
Market Guide. Some of our reports are available for free
others can be purchased on a per report or subscription basis;
StockQuest, an analytic software package containing over 75
popular ratios and statistics for screening and
reporting purposes;
Stock tables highlighting the Daily Winners and Losers based
on percent change in price. The tables are divided by
stocks trading between $2.00 and $10.00 and stock trading over
$10.00;
Market Guide University, an area designed to show users how
to get the most benefit from using the Market Guide research
reports in the investment decision making process.
Our Internet site has also reduced our data distribution
costs. Each month, more of our vendors are able to receive
our data updates over the Internet, which in turn, is
reducing our messenger and delivery fees we typically incurred
in the past.
The Credit Risk Monitor
In September 1996, Market Guide hired a new group to develop
and market a new Internet based financial information
service directed at the corporate credit professional. The
service will be designed to provide the corporate credit
professional with a significant portion of the information
necessary to analyze their credit risks. We are excited
about this new venture and will issue more information as the
business develops.
Publications
A quarterly print product called The Market Guide - Select
Over
the Counter Stock Edition is a single volume of 800 one-
page reports on fast growing, profitable over-the-counter
companies. The book also has a detailed company index
listing 15 key statistics on each company in a tabular
format. This index is very useful to investors searching
for attractive investment opportunities.
Market Guide attempts to provide continuity of coverage so
that subscribers to the book can keep following companies in
which they have an interest. However, from time-to-time the
companies covered do change. The most common reasons for
deletion of coverage are:
The company has been acquired in a merger or a
leveraged
buyout;
The company has not filed a financial statement with
the Securities and Exchange Commission for two or more
reporting periods;
The company has exhibited significant deterioration in
its financial condition;
The company has been deleted from the National
Association of Security Dealers Automatic Quotation
System (Nasdaq) and has fewer than three Market Makers;
The company now trades on the New York or American
Stock Exchange, and no longer qualifies for the OTC
edition.
Companies dropped from the book are replaced by companies
which are selected by using proprietary Market Guide
selection
criteria. The companies in the book, as a group, have
regularly
outperformed the Nasdaq composite.
Database Enhancements
The Company continuously expands, enhances and improves
the Market Guide Database based on customer suggestions and
employee feedback. In 1988,
the Company added the New York and American
Stock Exchange companies to its then current universe of
Nasdaq and "pink sheet" companies.
In 1990, Market Guide decided to expand the database to
include complete detailed quarterly financial statements.
The Company engaged in a series of dialogues with current
or potential vendors and customers to determine the market
potential, to identify the Company's perceived strengths and
weaknesses, and to
research market needs and the appropriateness of the
Company's methodologies and objectives. The results of this
analysis were the commitment of resources to more than double
the amount of information collected and maintained on each
subject company. In fiscal years 1990, 1991 and 1992 the
Company added the Annual Statement of Cash Flows and complete
Quarterly Income Statements, Balance Sheets and Statements of
Cash Flows on all the companies in the database. This has
allowed Market Guide to serve new markets and to bid on
services for which Market Guide did not previously qualify.
In 1993 the Company entered a redistribution agreement
with Zack's Investment Research. Under the terms of this
agreement, Market Guide may, after consulting with Zacks on a
case-by-case basis, redistribute Zacks' Earnings Estimate
information to selected vendors.
In late 1993 the Company began to track short
interest
information published monthly by the exchanges.
In early 1994 the Company began subscribing to and processing
the Securities and Exchange Commission's (SEC's) Electronic
Data Gathering Analysis and Reporting (EDGAR) service. This has
given our analysts access to source documents (10-Ks, 10-Qs,
etc.) ten days to two weeks earlier than in previous years.
This has resulted in record levels of timeliness measures for
the Market Guide Database.
In the fall of 1994, Market Guide introduced completely
new industry and sector classifications that reflect the
current economy and are being incorporated into all of Market
Guide's products.
These new industry and sector classifications will
help investors:
Identify which industry and sectors are outperforming
the market or have fallen from favor;
Compare companies to a well defined peer group;
Permit investors to construct and analyze industry
aggregate
financial characteristics;
Properly construct portfolios to ensure adequate
diversification; and
Make well reasoned asset allocation decisions.
In the fall of 1995, the Company completed development of
a historical pricing database to complement the
financial information it has compiled. The pricing database
contains both historical and current information for all issues
trading on the New York and American stock exchanges, the
Nasdaq stock market, and selected OTC Bulletin Board
Companies. The Market Guide pricing database contains Open,
High, Low, Close and Volume information on a daily basis
beginning in 1986, with daily updates occurring each trading
day.
In order to satisfy institutional investors' needs for
extensive historical financial information, Market Guide
increased the number of years of historical annual financial
statements in the Market Guide database (the "Big Ten"
project). With
the
culmination of the Big Ten project, Market Guide now has
annual financial statements going back to 1983 for most
companies on its database. As a result of the Big Ten project,
Market Guide is now able to compete for other business where
at least ten years of historical data are required. The
information is currently being distributed within the
OneSource US Equities product.
Business Facilities
In October, 1994 the Company relocated to new headquarters
in Lake Success, New York. Lake Success is on the Queens (New
York City) - Nassau County (Long Island) border, and is closer
to New York City than our previous location. The new
facility, at approximately 13,500 square feet, is three times
larger than our former location and is equipped with state of
the art network and digital telephone technology to support
current and future needs in the evolving "information super
highway" and "multi-media" environments. Its proximity to
New York City has brought the Company closer to one of its
largest markets and also opened up a much larger labor pool
from which to draw the talent needed to support company
growth.
The Company is looking for additional space in the same
building to support its continued growth.
Reverse Stock Split
In September, 1995 the Company announced shareholder approval
of a one-for-four reverse stock split at its August 31, 1995
annual meeting. The reverse split became effective October
16, 1995, and will allow the Company to meet one of the major
qualification criteria for inclusion on the Nasdaq "Small Cap"
market.
Corporate Incentives
At the August 30, 1995 shareholders' meeting,
shareholders approved an Employee Stock Purchase Plan, a
Key Employee Incentive Plan and an Outside Directors'
Incentive Plan.
The
Employee Stock Purchase Plan was put into effect on September
1, 1995. The incentive plans are currently being put into
effect.
Results of Operations
For the three months ended August 31, 1996 compared to August
31, 1995
Total revenues for the three months ended August 31,
1996 increased 15% to $1,117,148. Database vendor revenues
increased 14% to $1,002,632 which accounted for the
majority of the increase. This quarter reflects a major
reduction in revenues from InvesText, offset by the
continued growth from an increase in the number of vendors
providing the Market Guide database as well as increased
sales penetration among several existing vendors. Market
Guide product sales increased 33% to $101,630 reflecting new
Market Guide for Windows sales and Internet sales of
individual Market Guide research reports
- --
http://www.marketguide.com. Print product revenues decreased
20% to $12,886 and are anticipated to continue to decline
as a percentage of overall revenues due to management's
concentration on distributing its electronic products.
Total operating expenses for the three months ended August
31, 1996 increased 26% to $1,072,080. The growth in
operating expenses resulted from higher salaries & benefits,
database & product, and general & administrative expenses.
Salaries and employee benefits increased 16% to $626,979
reflecting the hiring of additional sales personnel,
programmers, analysts, and research assistants. Database and
product costs increased 46% to $197,614 reflecting a sharp
increase in amortization expense and higher data acquisition
costs. General & administrative expenses rose 36% to $218,704
due to costs associated with recruiting and hiring additional
personnel, opening a Chicago sales office, and responding to
increased customer and shareholder inquiries.
Income from operations for the three months ended August 31,
1996 decreased 61% to $45,068. The decline in operating
income reflects the reduction in revenues received from
InvesText. The
renegotiated InvesText agreement became effective on June
1, 1996. Management expects that continued revenue growth
will result in a resumption of net income and earnings growth
in the coming quarters.
Interest expense for the three months ended August 31,
1996 increased 19% to $15,284. This increase is
attributable to additional financing through capitalized
leases used to purchase office equipment and computer
hardware.
Net income for the three months ended August 31, 1996
decreased 63% to $37,442. The decrease principally reflects a
reduction in revenues from the revised InvesText agreement,
and increased operating expenses as discussed above.
For the six months ended August 31, 1996 compared to August
31, 1995
Total revenues for the six months ended August 31, 1996
increased 21% to $2,248,254. Database vendor revenues
increased 20% to $2,036,493 accounting for the majority of
the increase. Despite a reduction in revenues from
InvesText, the Company continues to benefit from an increase
in the number of vendors providing the Market Guide database
as well as increased sales penetration among several
existing vendors. Market Guide product sales increased 43%
to $182,134 reflecting new Market Guide for Windows sales and
Internet sales of individual Market Guide research reports
- -- http://www.marketguide.com. Print product revenues
decreased 10% to $29,627 and will likely continue to decline as
a percentage of overall revenues due to management's
concentration on distributing its electronic products.
Total operating expenses for the six months ended August 31,
1996 increased 24% to $2,052,813. The growth in operating
expenses resulted from higher salaries & benefits, database &
product, and general & administrative expenses. Salaries
and employee
benefits increased 21% to $1,262,124 reflecting the hiring
of additional sales personnel, programmers, analysts, and
research assistants. Database and product costs increased 27%
to $340,893 reflecting a sharp increase in amortization
expense and higher data acquisition costs. General &
administrative expenses rose 29% to $391,680 due to costs
associated with recruiting and hiring additional personnel,
opening a Chicago sales office, and responding to customer and
shareholder inquiries.
Income from operations for the six months ended August 31,
1996 decreased 4% to $195,441. The decline in operating
income reflects the reduction in revenues from the
renegotiation of the InvesText agreement which became
effective on June 1, 1996. Management expects that
continued revenue growth will result in a resumption of net
income and earnings growth in the coming quarters.
Interest expense for the six months ended August 31,
1996 increased 36% to $33,202. This increase is
attributable to additional financing through capitalized
leases used to purchase office equipment and computer
hardware.
Net income for the six months ended August 31, 1996 decreased
2% to $175,153. The decrease reflects a reduction in revenues
from the InvesText agreement, and increased operating
expenses as discussed above.
Liquidity and Capital Resources
The Company's financial condition reflects another fiscal
quarter of steady improvement. The improvement is due, in
part, to controlling expenses, investing in product
development, and generating higher revenues in all three
markets -- The
Individual, the Broker & Trader, and the Institutional
Investor marketplaces. It also reflects the benefits of
new business agreements and advanced payments associated
with these new contracts.
As of August 31, 1996 the Company's working capital
(current assets less current liabilities) increased 5% to
$1,023,235. The Company's cash and cash equivalents increased
59% to $1,081,977 from February 29, 1996.
For the six months ended August 31, 1996, net cash provided
by operating activities increased 146% to $722,880. The
gain reflects higher depreciation and amortization expenses
and an increase in unearned revenue, as well as a lower
accounts receivable balance.
For the six months ended August 31, 1996, net cash used
in investing activities increased 6% to $449,860. The
increase reflects the Company's continued investment
in product enhancements and the continued development of
three products: Market Guide for Windows, StockQuest, and the
Company's Internet site that will result in added value to our
users and strengthen our competitive position.
For the six months ended August 31, 1996, net cash provided
by financing activities decreased 41% to $128,174. The
decrease reflects additional lease payments and a reduction
in proceeds from the Employee Stock Purchase Plan.
The Company did not engage in any borrowing other
than capitalized leases and did not maintain any credit lines
thus far in fiscal 1997.
The Company believes its current liquidity is sufficient to
meet its operating obligations during the next twelve
months. However, management is planning to raise approximately
$2,000,000 in a private placement by the end of the third
fiscal quarter. Proceeds from the private placement will
be used to fund expansion of the database and the
development of new products and services.
Forward Looking Statements:
Statements in the August 31, 1996 10-Q which are not
historical are forward-looking statements that involve
risks and
uncertainties. In addition to factors that may be described
in other Securities and Exchange Commission filings, the
following factors, among others, could cause the
Company's financial performance to differ materially from
that expressed in any forward-looking statements made by, or
on behalf of, the Company: (a) the failure of a vendor to
renew a contract; (b) the financial deterioration of an
existing customer; (c) the loss of an existing contract to a
competitive financial data provider; (d) downward pricing
revisions due to market pressures; (e) the effectiveness of
the Company's sales of Market Guide for Windows; (f) the
ability of the Company to conduct business over the
Internet; (g) a severe and prolonged downturn in the
stock market; and (h) other normal business risks.
Other Information
Item 1 Legal Proceeding
None
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to Vote of Security Holders
None
Item 5 Exhibits and Reports on Form 8-K
None
Signature
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 thereunto duly authorized.
MARKET GUIDE INC.
(Registrant)
___________________________
__________________________________
Date HOMI M. BYRAMJI