-----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, Qkcs0nZeoxVtxobV4McZmnRvxahUsFEmgXaZDZNT5+CFBPShcYBvi1g0f36Udak6 FXVpli36Han1Uu6yNWVLnA== 0000930413-01-501519.txt : 20020410 0000930413-01-501519.hdr.sgml : 20020410 ACCESSION NUMBER: 0000930413-01-501519 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-75828 FILM NUMBER: 1790287 BUSINESS ADDRESS: STREET 1: 625 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2126454500 10-Q 1 c22281_10q.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------------------- For the quarterly period ended SEPTEMBER 30, 2001 ------------------ 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 -------------- 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 ---------- -------- Number of shares of Common Stock outstanding at October 1, 2001: 7,605,943 FIND/SVP, INC. AND SUBSIDIARIES Index PART I. FINANCIAL INFORMATION Page ITEM 1. Financial Statements Condensed Consolidated Balance Sheets 3 September 30, 2001 (unaudited) and December 31, 2000 Condensed Consolidated Statements of Operations 4 Nine Months Ended September 30, 2001 and 2000 (unaudited) Condensed Consolidated Statements of Operations 5 Three Months Ended September 30, 2001 and 2000 (unaudited) Condensed Consolidated Statements of Cash Flows 6 Nine Months Ended September 30, 2001 and 2000 (unaudited) Notes to Condensed Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 14 SIGNATURES 15 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FIND/SVP, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except share and per share data)
September 30, December 31, 2001 2000 ---- ---- ASSETS (unaudited) Current assets: Cash and cash equivalents $ 509 $ 901 Accounts receivable, net 1,857 2,520 Note receivable 138 138 Deferred tax assets 70 70 Prepaid expenses and other current assets 551 442 -------- --------- Total current assets 3,125 4,071 Equipment and leasehold improvements, at cost, less accumulated depreciation and amortization of $8,016 in 2001 and $7,294 in 2000 3,110 3,558 Other assets: Deferred tax assets 941 789 Accrued rent receivable 742 602 Cash surrender value of life insurance 736 703 Non-marketable equity securities 500 500 Other assets 445 560 -------- --------- $ 9,599 $ 10,783 ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of notes payable $ 675 $ 674 Trade accounts payable 560 791 Accrued expenses and other 777 979 Accrued interest 41 40 -------- --------- Total current liabilities 2,053 2,484 -------- --------- Unearned retainer income 1,767 2,071 Notes payable, including accrued deferred interest 1,543 1,685 Other liabilities 581 551 Commitments and contingencies Shareholders' equity: Common stock, $.0001 par value. Authorized 20,000,000 shares; issued and outstanding 7,605,943 at September 30, 2001 and December 31, 2000 1 1 Capital in excess of par value 5,542 5,542 Accumulated deficit (1,888) (1,551) -------- --------- Total shareholders' equity 3,655 3,992 -------- --------- $ 9,599 $ 10,783 ======== ========= See accompanying notes to condensed consolidated financial statements.
3 FIND/SVP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) Nine months ended September 30 (in thousands, except share and per share data)
2001 2000 ---- ---- Revenues $ 17,257 $ 17,960 ---------- --------- Operating expenses: Direct costs 8,397 9,283 Selling, general and administrative expenses 9,028 9,114 Effects of World Trade Center Attack 165 - ---------- --------- Operating loss (333) (437) Interest income 42 103 Other income - 139 Interest expense (199) (259) ---------- --------- Loss before benefit for income taxes and extraordinary item (490) (454) Benefit for income taxes (152) (113) ---------- --------- Loss before extraordinary item (338) (341) Extraordinary item on retirement of debt (net of tax effect of $9) - (27) ---------- --------- Net loss $ (338) $ (368) ========== ========= Loss per common share - basic: Loss before extraordinary item $ (0.04) $ (0.05) Extraordinary item 0.00 0.00 ---------- -------- Net loss $ (0.04) $ (0.05) ========== ======== Loss per common share - diluted: Loss before extraordinary item $ (0.04) $ (0.05) Extraordinary item 0.00 0.00 ---------- -------- Net loss $ (0.04) $ (0.05) ========== ======== Weighted average number of common shares: Basic 7,605,943 7,406,333 ========= ========= Diluted 7,605,943 7,406,333 ========= ========= See accompanying notes to condensed consolidated financial statements.
4 FIND/SVP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) Three months ended September 30 (in thousands, except share and per share data)
2001 2000 ---- ---- Revenues $ 5,381 $ 5,993 ---------- --------- Operating expenses: Direct costs 2,684 3,173 Selling, general and administrative expenses 2,800 3,181 Effects of World Trade Center Attack 165 - ---------- --------- Operating loss (268) (361) Interest income 7 31 Other income - 139 Interest expense (62) (69) ---------- --------- Loss before benefit for income taxes and extraordinary item (323) (260) Benefit for income taxes (110) (64) ---------- --------- Loss before extraordinary item (213) (196) Extraordinary item on retirement of debt (net of tax effect of $9) - (27) ---------- --------- Net loss $ (213) $ (223) ========== ========= Loss per common share - basic: Loss before extraordinary item $ (0.03) $ (0.03) Extraordinary item 0.00 0.00 ---------- -------- Net loss $ (0.03) $ (0.03) ========== ======== Loss per common share - diluted: Loss before extraordinary item $ (0.03) $ (0.03) Extraordinary item 0.00 0.00 ---------- -------- Net loss $ (0.03) $ (0.03) ========== ======== Weighted average number of common shares: Basic 7,605,943 7,455,735 ========= ========= Diluted 7,605,943 7,455,735 ========= ========= See accompanying notes to condensed consolidated financial statements.
5 FIND/SVP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited) Nine months ended September 30 (in thousands)
2001 2000 ---- ---- Cash flows from operating activities: Net loss $ (338) $ (368) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 831 851 Provision for losses on accounts receivable 310 181 Changes in assets and liabilities: Decrease (increase) in accounts receivable 353 (626) Increase in prepaid and refundable income taxes - (52) Increase in prepaid expenses (109) (150) Increase in deferred tax assets (152) (112) Increase in other assets (301) (325) (Decrease) increase in accounts payable (231) 68 Decrease in accrued expenses and other current liabilities (193) (457) (Decrease) increase in unearned retainer income (304) 193 Increase (decrease) in other liabilities 30 (20) ------- ------ Net cash used in operating activities (104) (817) ------- ------ Cash flows from investing activities: Capital expenditures (275) (398) Repayment of note receivable 137 137 ------- ------ Net cash used in investing activities (138) (261) ------- ------ Cash flows from financing activities: Principal borrowings under notes payable - 1,400 Principal payments under notes payable (150) (1,424) Proceeds from exercise of stock options - 37 ------- ------ Net cash (used in) provided by financing activities (150) 13 ------- ------ Net decrease in cash (392) (1,065) Cash at beginning of period 901 2,096 ------- ------ Cash at end of period $ 509 $ 1,031 ===== ====== See accompanying notes to condensed consolidated financial statements.
6 FIND/SVP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) A. MANAGEMENT'S STATEMENT In the opinion of Management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position at September 30, 2001, and the results of operations for the nine and three month periods ended September 30, 2001 and 2000 and cash flows for the nine month periods ended September 30, 2001 and 2000. Operating results for the nine and three month periods ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. FIND/SVP, Inc. and Subsidiaries (the "Company") have reclassified certain prior year balances to conform with the current presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2000 included in the Company's 2000 Annual Report on Form 10-K. B. LOSS PER SHARE Basic earnings per share are computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net (loss) income by a diluted weighted average number of common shares outstanding during the period. 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. Options and warrants to purchase 1,763,630 and 2,194,316 common shares during the nine months ended September 30, 2001 and 2000, respectively, were antidilutive and were therefore excluded from the computation of diluted earnings per share. Options and warrants to purchase 1,808,222 and 2,490,427 common shares during the three months ended September 30, 2001 and 2000, respectively, were antidilutive and were therefore excluded from the computation of diluted earnings per share. C. DEBT The Company has a $1,000,000 line of credit at the prime commercial lending rate plus 0.5%. As of September 30, 2001, the Company has letters of credit totaling $103,000, which are secured by the line of credit, thus reducing the amount available to $897,000. No amounts were borrowed under the line of credit as of September 30, 2001. 7 D. INCOME TAXES The $152,000 and $113,000 income tax benefit as of September 30, 2001 and 2000, respectively, represents 31% and 25%, respectively, of the loss before income tax benefit. The difference between this rate and the statutory rate primarily relates to expenses that are not deductible for income tax purposes. E. NEW ACCOUNTING PRINCIPLES In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133) 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 adopted both pronouncements as of January 1, 2001. The Company does not have derivatives or hedging activities as contemplated by these pronouncements, and there was no effect of adoption. In June 2001, the FASB issued Statements of Financial Accounting Standards No. 141, "Business Combinations" effective July 1, 2001, and No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142), effective for fiscal years beginning after December 15, 2001. Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the statements. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules of accounting for goodwill and other intangible assets beginning in the first quarter of 2002. On an annual basis, the Company's amortization of goodwill approximates $10,000. The Company will perform the required impairment tests related to goodwill and indefinite-lived intangible assets recorded on January 1, 2002. The Company has concluded that the adoption of SFAS No. 142 will not have a material effect on its financial statements. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (SFAS No. 143) effective for financial statements issued after June 15, 2002. SFAS No. 143 addresses the financial accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. The Company has not yet determined what the effects of these tests will be on its earnings and financial position, if any. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" (SFAS No. 144) effective for fiscal years beginning after December 15, 2001. SFAS No. 144 addresses the accounting and reporting for the impairment or disposal of long-lived assets, including the disposal of a segment of business. The Company has not yet determined what the effect of these tests will be on its earnings and financial position, if any. F. GRANTING OF STOCK OPTIONS During the nine month period ended September 30, 2001, options to purchase 181,550 shares of common stock were granted under the Company's Stock Option Plan, at prices ranging from $0.625 to $0.800. 8 G. SEGMENT REPORTING The Company measures its consulting and business advisory services in two business segments: Quick Consulting and Strategic Consulting. Corresponding information for the nine and three month periods ended September 30, 2000 has been disaggregated to provide comparative information. The Company operates primarily in the United States. 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.
- ------------------------------------------------------------------------------------------------------------------------------ (in thousands) NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 2001 2000 ---- ---- ---- ---- REVENUES Quick Consulting $ 14,907 $14,911 $ 4,683 $ 4,988 Strategic Consulting 2,350 3,049 698 1,005 ----------------------------------------------------------------- Total revenues $ 17,257 $17,960 $ 5,381 $ 5,993 ================================================================= OPERATING INCOME Quick Consulting $ 3,453 $ 3,385 $ 929 $ 957 Strategic Consulting (119) (11) (31) (26) ----------------------------------------------------------------- Segment operating income 3,334 3,374 898 931 Corporate and other (1) (3,824) (3,828) (1,221) (1,191) ----------------------------------------------------------------- Loss before benefit for income taxes $ (490) $ (454) $ (323) $ (260) ================================================================= (1) Includes interest income and interest expense. - -------------------------------------------------------------------------------------------------------------------------------
H. SUBSEQUENT EVENT On October 31, 2001, the Company repaid a portion of its Notes Payable. Principal of $475,000, due on October 31, 2001, was paid. In addition, the Company paid $41,000 in accrued and deferred interest on this Note Payable. To remain in compliance with debt covenants under the existing Term Note from a commercial bank, the Company estimates it will need to increase equity or subordinated debt by $300,000 prior to December 31, 2001. I. EFFECTS OF WORLD TRADE CENTER ATTACK As a result of the World Trade Center attack, the Company has incurred certain losses. The losses are estimated to be $165,000. As a result of the sudden economic shift among clients, staff will be reduced resulting in $13,000 of severance costs. Subsequent to September 11, 2001, the Company reviewed receivables on those clients directly affected by the tragedy, including attempted communication with those accounts. As a result, the Company has recorded additional reserves on receivables of $125,000 attributed to the events of September 11, 2001. The Company also incurred incremental costs related to staffing and maintaining its ability to service clients during the week of September 11, 2001 totaling $27,000. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Nine and three months ended September 30, 2001 compared to nine and three months ended September 30, 2000. 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 ("LAD") (together the "Quick Consulting" segment); 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 (the "Strategic Consulting" segment). The Company considers its QCS and SCRG service businesses, which operate as "consulting and business advisory" businesses, to be its core competency. REVENUES The Company's revenues decreased by $703,000 or 3.9% to $17,257,000 for the nine-month period ended September 30, 2001 from $17,960,000 for the nine-month period ended September 30, 2000. The Company's revenues decreased by $612,000 or 10.2% to $5,381,000 for the three-month period ended September 30, 2001 from $5,993,000 for the three-month period ended September 30, 2000. Quick Consulting revenues decreased by less than 1.0% and Strategic Consulting revenues decreased by 22.9% for the nine-month period ended September 30, 2001, as compared to the comparable period of the prior year. Quick Consulting accounted for 86.4% and 83.0% and Strategic Consulting accounted for 13.6% and 17.0% of the Company's revenues for the nine-month periods ended September 30, 2001 and 2000, respectively. Quick Consulting revenues decreased by 6.1% and Strategic Consulting revenues decreased by 30.5% for the three-month period ended September 30, 2001, as compared to the comparable period of the prior year. Quick Consulting accounted for 87.0% and 83.2% and Strategic Consulting accounted for 13.0% and 16.8% of the Company's revenues for the three-month periods ended September 30, 2001 and 2000, respectively. The decreases in revenues during the nine and three-month periods ended September 30, 2001 as compared to the comparable period of the prior year were due primarily to the weakening economy, which has caused cancellations and a decrease in new sales in Quick Consulting, and a decline in new projects booked in Strategic Consulting. 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) decreased by 9.5% or $886,000 to $8,397,000 for the nine-month period ended September 30, 2001, from $9,283,000 for the nine-month period ended September 30, 2000. As a percent of revenues, direct costs decreased to 48.7% for the nine-month period ended September 30, 2001, from 51.7% for the corresponding period in 2000. 10 Direct costs decreased by 15.4% or $489,000 to $2,684,000 for the three-month period ended September 30, 2001, from $3,173,000 for the three-month period ended September 30, 2000. As a percent of revenues, direct costs decreased to 49.9% for the three-month period ended September 30, 2001, from 52.9% for the corresponding period in 2000. The decrease in total direct costs was due primarily to a decrease in the expenses incurred on behalf of clients, in addition to a reduction in direct labor costs. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses decreased by 1.0% or $86,000 to $9,028,000 for the nine-month period ended September 30, 2001, from $9,114,000 for the nine-month period ended September 30, 2000. As a percent of revenues, selling, general and administrative expenses increased to 52.3% for the nine-month period ended September 30, 2001, from 50.7% for the corresponding period in 2000. Selling, general and administrative expenses decreased by 12.0% or $381,000 to $2,800,000 for the three-month period ended September 30, 2001, from $3,181,000 for the three-month period ended September 30, 2000. As a percent of revenues, selling, general and administrative expenses decreased to 52.0% for the three-month period ended September 30, 2001, from 53.1% for the corresponding period in 2000. The decrease in selling, general and administrative expenses was due primarily to reductions in general expenses in response to cost containment measures that began in the second quarter of 2001. EFFECTS OF WORLD TRADE CENTER ATTACK As a result of the World Trade Center attack, the Company has incurred certain losses. The losses are estimated to be $165,000. As a result of the sudden economic shift among clients, staff will be reduced, resulting in $13,000 of severance costs. Subsequent to September 11, 2001, the Company reviewed receivables on those clients directly affected by the tragedy, including attempted communication with those accounts. As a result, the Company has recorded additional reserves on receivables of $125,000 attributed to the events of September 11, 2001. The Company also incurred incremental costs related to staffing and maintaining its ability to service clients during the week of September 11, 2001 totaling $27,000. OPERATING LOSS The Company had an operating loss of $333,000 for the nine months ended September 30, 2001, as compared to an operating loss of $437,000 for the nine months ended September 30, 2000. The Company had an operating loss of $268,000 for the three months ended September 30, 2001, as compared to an operating loss of $361,000 for the three months ended September 30, 2000. 11 INTEREST INCOME AND EXPENSE During the nine months ended September 30, 2001, the Company earned $42,000 in interest income, which decreased from $103,000 in 2000. During the three months ended September 30, 2001, the Company earned $7,000 in interest income, a decrease from $31,000 for the same period in the prior year. The decrease was primarily the result of lower cash balances during the 2001 as compared to the same period of 2000. Interest expense was $199,000 for the nine-month period ended September 30, 2001, which was a decrease from $259,000 for the same period in 2000. Interest expense was $62,000 for the three-month period ended September 30, 2001, which was a decrease from $69,000 for the same period in 2000. The decrease was a result of the reduction in outstanding debt at the end of 2000 and during 2001 as compared to the balance outstanding at September 30, 2000. 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. OTHER INCOME 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. As a result of this lease termination, the Company took into income a portion of its accrued rent payable, totaling $39,000. 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 $509,000 and $901,000 at September 30, 2001 and December 31, 2000, respectively. The Company's working capital position (current assets less current liabilities) at September 30, 2001 was $1,072,000, as compared to $1,587,000 at December 31, 2000. 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, reduced by outstanding letters of credit totaling $103,000. No amounts were borrowed under the line of credit as of September 30, 2001. Cash used in operating activities was $104,000 and $817,000 in the nine-month periods ended September 30, 2001 and 2000, respectively. Cash used in investing activities was $138,000 and $261,000 in the nine-month periods ended September 30, 2001 and 2000, respectively. Capital expenditures of $275,000 in 2001 were for computer hardware upgrades and for leasehold improvements. This was offset by the repayment of $137,000 towards a note receivable during the second quarter of 2001. Capital expenditures for the migration of the Company's management information system to a new computer system platform were a significant component of the $398,000 invested in 2000. This was offset by the repayment of $137,000 towards a note receivable during the third quarter of 2000. The Company expects to spend approximately $100,000 for capital items during the remainder of 2001. 12 Cash (used in) provided by financing activities was ($150,000) and $13,000 in the nine-month periods ended September 30, 2001 and 2000, respectively. During the third quarter of 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 October 2001, the Company made payments of $475,000 on subordinated debt in accordance with stated maturity schedules. To remain in compliance with debt covenants under the existing Term Note from a commercial bank, the Company estimates it will need to increase equity or subordinated debt by $300,000 prior to December 31, 2001. During the nine months ended September 30, 2001, options to purchase 181,550 shares of common stock were granted under the Company's Stock Option Plan, at prices ranging from $0.625 to $0.800. During the nine months ended September 30, 2000, the Company had the following non-cash transactions: (a) warrants to acquire 266,945 common shares were exercised and $601,000 of face value of the Senior Subordinated Note due October 31, 2001 were surrendered as payment, in a non-cash transaction; (b) 47,860 options were exercised 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. and (c) options to purchase 710,500 shares of common stock were granted under the Company's Stock Option Plan, at prices ranging from $1.062 to $3.6875. MARKET FOR COMPANY'S COMMON EQUITY In April 2001, due to its failure to comply with NASDAQ's $1.00 minimum bid price requirement, the Company's shares of Common Stock were delisted. Trading has continued to be conducted on the non-NASDAQ over-the-counter bulletin board. 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. 13 FORWARD LOOKING INFORMATION: CERTAIN CAUTIONARY STATEMENTS This Report on Form 10-Q (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 Act of 1995. Such forward-looking statements, including statements regarding its future cash flows, sales, gross margins and operating costs, and the effect of conditions in the industry and the economy in general, 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, and in other documents filed by the Company with the SEC. 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 any 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 statements in this paragraph and elsewhere in this Form 10-Q, and in other reports filed by the Company with the Securities and Exchange Commission. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There has been no material change in the Company's assessment of its sensitivity to market risk as of September 30 2001, as compared to the information included in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk", of the Company's Form 10-K for the year ended December 31, 2000, as filed with the Securities and Exchange Commission on April 2, 2001. 14 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 thereunto duly authorized. FIND/SVP INC. ------------- (REGISTRANT) DATE: NOVEMBER 14, 2001 /s/ ANDREW P. GARVIN - ------------------------ ------------------------------------- Andrew P. Garvin Chief Executive Officer and President DATE: NOVEMBER 14, 2001 /s/ FRED S. GOLDEN - ------------------------ ------------------------------------- Fred S. Golden Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----