Harris Interactive Acquires WirthlinWorldwide
September 09 2004 - 7:30AM
PR Newswire (US)
Harris Interactive Acquires WirthlinWorldwide Expands Research
Capabilities and Extends Global Presence Dr. Richard B. Wirthlin
Named as Director ROCHESTER, N.Y., Sept. 9 /PRNewswire-FirstCall/
-- Harris Interactive(R) (NASDAQ:HPOL) has acquired
WirthlinWorldwide, a privately held, premier opinion research and
strategic consulting firm, headquartered in Reston, Virginia. The
deal was completed with a combination of stock and cash valued at
$41.8 million, and will add $50 million in annual revenue and 300
new clients to Harris Interactive. The combined firm will have over
1,000 employees and is expected to generate $210 to $215 million in
revenue this fiscal year. "I'm excited about the deep, consultative
and strategic relationships WirthlinWorldwide has built with their
clients. By joining forces, we can now introduce the added benefits
of online research to the executives of 300 more companies,"
commented Robert E. Knapp, CEO of Harris Interactive. "This
combination expands our portfolio of products and services and
injects a significant amount of intellectual capital into our
organization. We are well on our way to achieving our goal of
becoming a $500 million strategic market research firm in the next
five years," Knapp continued. "For over 40 years, I have been
passionate about helping our clients build measurable value. With
this merger, we can now arm clients with a broader and more
powerful suite of world class research tools. The entire
WirthlinWorldwide team believes the combined firm will be a
significant force in the marketplace," said Dr. Richard B.
Wirthlin, founder of WirthlinWorldwide. "We have been approached by
many suitors through the years, but none rivaled the Harris
Interactive combination of intellect and innovation. They are true
world leaders in online research," Wirthlin concluded. Strategic
Reasons for the Merger The Company noted several major benefits of
this union. * Leverage -- Creates opportunity for over $1 million
in potential savings, the merger is immediately accretive --
Presents opportunity to convert 15% to 20% of traditional revenue
to the Internet -- Creates large cross-selling opportunity among
1000+ combined client base * Revenue and profit -- Adds estimated
$50 million of annual revenue -- Adds estimated $40 million of
revenue in fiscal 2005 alone -- Adds estimated $0.01 to $0.02 of
pre-tax earnings per share in fiscal 2005 -- Adds estimated $0.01
of after-tax, or net earnings per share in fiscal 2005 * Client
access -- Increases client base by over 40% with only 14% overlap
-- Doubles number of Fortune 500 clients -- Adds 4,500 active
contacts to client marketing database * Industry sector expansion
-- Expands Brand and Strategic Consulting business dramatically --
Increases scale of the Government and Policy practice --
Establishes foundation for growth in Financial Services, Consumer
Packaged Goods * Geographic reach -- Strengthens presence in
Midwest U.S. and the U.K. -- Adds China presence in Shanghai and
Hong Kong * Intellectual and managerial talent -- Adds five senior
managers with over 120 years experience -- Adds 50 senior research
analysts Dr. Richard B. Wirthlin Named Director The Company also
announced that Dr. Richard B. Wirthlin, founder of
WirthlinWorldwide and Ronald Reagan's chief strategist and pollster
from 1968 to 1988, will join the Harris Interactive board as a
director. Wirthlin will also continue to develop strategic
direction for both clients and the internal operating groups within
the Company. $41.8 Million Cash and Stock Deal In connection with
the transaction, Harris Interactive issued 3.5 million shares of
stock priced at $6.07 per share and paid $20.4 million in cash. The
entire senior executive team is covered by employment contracts.
New Guidance Issued for Q1 and FY2005 Q1 Revenue $40 to $42 million
Pre-tax earnings $0.04 to $0.06 per share (fully diluted) Post-tax,
or net earnings $0.03 to $0.04 per share (fully diluted) Fiscal
2005 Revenue $210 to $215 million Pre-tax earnings $0.32 to $0.36
per share (fully diluted) Post-tax, or net earnings $0.21 to $0.23
per share (fully diluted), For the nine plus months remaining in
fiscal 2005, the Company expects WirthlinWorldwide to contribute
approximately $40 million in revenue, $0.01 to $0.02 per share of
pre-tax earnings and $0.01 per share of post-tax, or net earnings.
Pre-tax earnings per share (a non-GAAP measure) is calculated as
income before taxes divided by the weighted average diluted shares
currently outstanding and is reconciled to the most comparable GAAP
measure, net earnings, as follows: Three Months Fiscal Year Ending
Ending 9/30/04 6/30/05 Net earnings per share (fully diluted) $0.03
to $0.04 $0.21 to $0.23 Plus: Income tax expense per share (fully
diluted) $0.01 to $0.02 $0.11 to $0.13 Pre-tax earnings per share
(fully diluted) $0.04 to $0.06 $0.32 to $0.36 Conference Call and
Webcast Access Information The Company has scheduled a conference
call to discuss this merger for later this morning, Thursday,
September 9, 2004 at 11:30 a.m. ET. Robert E. Knapp, CEO will host
the teleconference. Formal remarks will be followed by a question
and answer session. To access the conference call, please dial
toll-free (888) 515-2880 in the United States and Canada, or (719)
457-2607 internationally by 11:15 a.m. ET on September 9 -- please
reference "Harris Interactive." A live webcast of the conference
call will also be accessible via the Company's website at
http://www.harrisinteractive.com/, and an archived version of the
webcast will be available for 30 days following the call under the
heading "Webcasts" in the "Investor Relations" section of the
Company's website. This media release will also be available prior
to the call at our website: http://www.harrisinteractive.com/news.
About Harris Interactive(R) Harris Interactive
(http://www.harrisinteractive.com/) is a worldwide market research
and consulting firm best known for The Harris Poll(R), and for
pioneering the Internet method to conduct scientifically accurate
market research. Headquartered in Rochester, New York, Harris
Interactive combines proprietary methodologies and technology with
expertise in predictive, custom and strategic research. The Company
conducts international research from its U.S. offices and through
wholly owned subsidiaries-London-based HI Europe
(http://www.hieurope.com/), Paris-based Novatris and Tokyo-based
Harris Interactive Japan-as well as through the Harris Interactive
Global Network of independent market- and opinion-research firms.
EOE M/F/D/V About WirthlinWorldwide As one of the world's leading
full-service opinion research and strategic consulting firms,
Wirthlin Worldwide (http://www.wirthlin.com/) has particular
expertise in developing marketing and communications strategies as
well as tactical solutions. Since 1964, the firm has provided
strategic research and consulting to a broad range of public and
private sector clients, including three-fourths of the Fortune 100
companies. Wirthlin Worldwide has offices in the U.S., Europe and
Asia. To become a member of the Harris Poll Online(SM) and be
invited to participate in future online surveys, visit
http://www.harrispollonline.com/. Contact: Dan Hucko SVP, Corporate
Communications & Investor Relations Harris Interactive
585-214-7470 Safe Harbor Statement This media release includes
statements that may constitute forward-looking information. We
caution you that these forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially from those discussed. Additional detailed information
concerning a number of factors that could cause actual results to
differ is readily available in the "Risk Factors" section of the
most recent Annual Report on form 10-K filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of
1934. DATASOURCE: Harris Interactive CONTACT: Dan Hucko, SVP,
Corporate Communications & Investor Relations, Harris
Interactive, +1-585-214-7470 Web site:
http://www.harrisinteractive.com/ http://www.harrispollonline.com/
http://www.wirthlin.com/ http://www.harrisinteractive.com/news
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