ORCI Opinion Research

PRINCETON, N.J., Oct. 31 /PRNewswire-FirstCall/ -- Opinion Research Corporation (NASDAQ:ORCI), today announced financial results for the third quarter ended September 30, 2005. Revenues Revenues for the quarter were $48.7 million versus $48.9 million in the prior year's third quarter. Social research revenues were $34.1 million versus $32.7 million in last year's third quarter. Market research revenues totaled $12.9 million versus $13.0 million in the prior year's third quarter. Teleservices revenues were $1.8 million versus $3.2 million in last year's third quarter. Income The Company reported a net loss for the quarter of $4.65 million. This includes an impairment provision for the remaining goodwill in the teleservices segment, the previously announced write-off of expenses incurred in a postponed equity offering and a tax accrual adjustment due to a change in the estimated annual tax rate, which together reduced net income by approximately $5.0 million. Net loss per diluted common share was $2.58. The above items and the impact from the previously announced repurchase of the LLR interests reduced earnings per diluted common share by $2.64. Net income and diluted earnings per share for the third quarter of 2004 were $1.0 million and $0.15 respectively. Nine Month's Results For the first nine months of 2005, revenues were $149.4 million compared to $146.3 million in the first nine months of 2004. The Company reported a net loss for the nine months of $3.2 million. This includes the goodwill impairment provision, a first quarter refinancing charge and the write-off of the equity offering expenses which together reduced net income by approximately $5.3 million. Net loss per diluted common share was $2.12. The above items and the impact from the repurchase of the LLR interests reduced earnings per diluted common share by $2.45. Net income and diluted earnings per share for the first nine months of 2004 were $1.7 million and $0.26 respectively. Last year's nine months was impacted by a refinancing charge that reduced net income by $1.5 million and diluted earnings per share by $0.24. Business Outlook Summarizing the quarter's results, Chairman and CEO, John F. Short, said, "We are pleased with the performance of our largest segment, social research, and are able to report that bookings of new social research business in the first nine months were over $160 million, a 50% increase over the same period in 2004. As a result, our social research backlog is currently $324 million. We are disappointed with the slow turnaround in market research and continued decline in teleservices but believe that we have taken the appropriate action to improve these businesses." The Company expects revenues in 2005 to be around $198 to $200 million, net loss to be between $2.6 and $2.8 million and net loss per share to be between $2.10 and $2.14. These expectations include the third quarter goodwill impairment, the write-off of the equity offering expenses and the charge to net income available to common shares due to the repurchase of the LLR interests, and the first quarter refinancing charge, which together reduce net income by $5.3 million and diluted earnings per share by $2.54. The fourth quarter is expected to be profitable but due to the reduction in shares late in the year the net loss per share for the year may not decline from that reported for the first nine months. The statements above concerning the Company's business outlook for 2005 are based on current expectations. These statements are forward-looking and actual results may differ materially. See "Forward-looking Statements" below. Conference Call Chairman and Chief Executive Officer John F. Short and Chief Financial Officer Douglas L. Cox will conduct an investor conference call at 4:00 p.m. (EST) on Monday, October 31. The dial-in number for the live conference call will be (866) 770-7120 (617) 213-8065 outside the U.S. and Canada) and enter conference passcode 94354526. There will be a live web cast of the conference call over the investor relations page of the company's Web site at http://www.opinionresearch.com/ as well as at http://www.fulldisclosure.com/. For those who cannot listen to the live broadcast, an audio replay of the call will be available on the above web sites for 30 days. A telephone replay of the call will also be available from 6:00 p.m. on October 31 until 11:59 p.m. on November 7. To listen to the telephone replay, dial (888) 286-8010 (617) 801-6888 outside the U.S. and Canada) and enter conference passcode 75884966. About Opinion Research Corporation Founded in 1938, Opinion Research Corporation provides commercial market research, health and demographic research for government agencies, information services, teleservices and consulting. The company is a pioneering leader in the science of market and social research and has built an international organization to support market intelligence in both public and commercial markets. Further information is available at http://www.opinionresearch.com/. Forward-looking Statements This press release contains, within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995, forward- looking statements that are based on management's beliefs and assumptions, current expectations, estimates and projections. These statements are subject to risks and uncertainties and therefore actual results may materially differ. The Company disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Important factors and risks that may affect future results are described in the Company's filings with the Securities and Exchange Commission, copies of which are available upon request from the Company. OPINION RESEARCH CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except share and per share amounts) For The Three Months For The Nine Months Ended September 30, Ended September 30, 2004 2005 2004 2005 Revenues $48,894 $48,697 $146,255 $149,417 Cost of revenues (exclusive of depreciation) 34,692 35,505 103,455 107,210 Gross profit 14,202 13,192 42,800 42,207 Selling, general and administrative expenses 10,130 9,912 30,398 31,153 Depreciation and amortization 1,017 1,068 2,914 3,060 Goodwill impairment charge - 5,530 - 5,530 Operating income (loss) 3,055 (3,318) 9,488 2,464 Interest expense 1,167 1,405 6,540 4,539 Other non-operating (income) expense, net (85) 1,373 (386) 1,324 Income (loss) before income tax expense (benefit) 1,973 (6,096) 3,334 (3,399) Income tax expense (benefit) 972 (1,442) 1,632 (228) Net income (loss) $1,001 $(4,654) $1,702 $(3,171) Repurchased LLR interests - (9,904) - (9,904) Net income (loss) available to common shareholders $1,001 $(14,558) $1,702 $(13,075) Net income (loss) per common share: Basic $0.16 $(2.58) $0.27 $(2.12) Diluted $0.15 $(2.58) $0.26 $(2.12) Weighted average shares outstanding: Basic 6,288,649 5,642,665 6,226,654 6,158,475 Diluted 6,483,720 5,642,665 6,435,092 6,158,475 OPINION RESEARCH CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) 30-Sep-05 31-Dec-04 30-Sep-05 31-Dec-04 Assets Liabilities and stockholders' equity Current assets: Current liabilities: Cash and Accounts payable $5,207 $6,254 equivalents $1,718 $467 Accrued expenses 10,289 9,191 Accounts Deferred revenues 3,950 4,344 receivable 24,583 26,001 Short-term Allowance for borrowings 3,000 2,000 doubtful Other current accounts (53) (93) liabilities 3,181 2,823 Unbilled Total current services 17,927 17,986 liabilities 25,627 24,612 Prepaid expenses and other Long-term current assets 2,898 3,672 borrowings 56,927 40,286 Total current Other liabilities 1,584 1,542 assets 47,073 48,033 Non-current assets: Redeemable equity - 8,900 Fixed assets, net of depreciation 10,015 10,105 Total stockholders' Goodwill 26,970 32,748 equity 7,422 22,343 Other intangibles, net Total liabilities of amortization 243 421 and stockholders' Other non-current equity $91,560 $97,683 assets 7,259 6,376 Total non-current assets 44,487 49,650 Total assets $91,560 $97,683 OPINION RESEARCH CORPORATION AND SUBSIDIARIES Segment Information (in thousands) US UK Market Market Tele- Social Total Consol- Research Research Services Research Segments Other idated Three months ended September 30, 2004: Revenues from external customers $6,023 $5,623 $3,213 $32,703 $47,562 $1,332 $48,894 Operating (loss) income (640) 58 236 3,378 3,032 23 3,055 Interest and other non-operating expenses, net 1,082 Income before income tax expense $1,973 Three months ended September 30, 2005: Revenues from external customers $6,072 $6,097 $1,750 $34,064 $47,983 $714 $48,697 Goodwill impairment charge - - (5,530) - (5,530) - (5,530) Operating (loss) income (685) 210 (5,865) 3,302 (3,038) (280) (3,318) Interest and other non- operating expenses, net 2,778 Loss before income tax benefit $(6,096) Nine months ended September 30, 2004: Revenues from external customers $19,623 $16,681 $10,163 $95,897 $142,364 $3,891 $146,255 Operating (loss) income (1,920) 348 926 10,104 9,458 30 9,488 Interest and other non-operating expenses, net 6,154 Income before income tax expense $3,334 Nine months ended September 30, 2005: Revenues from external customers $19,266 $17,236 $6,234 $104,118 $146,854 $2,563 $149,417 Goodwill impairment charges - - (5,530) - (5,530) - (5,530) Operating (loss) income (1,390) 284 (6,254) 10,654 3,294 (830) 2,464 Interest and other non- operating expenses, net 5,863 Loss before income tax benefit $(3,399) DATASOURCE: Opinion Research Corporation CONTACT: Douglas L. Cox, Executive Vice President, Chief Financial Officer of Opinion Research Corporation, +1-609-452-5274 Web site: http://www.opinionresearch.com/

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