- Revenues up 5.4%

- Market Research reports revenue increase of 19.1%

NEW YORK, Aug. 14 /PRNewswire-FirstCall/ -- Guideline, Inc. (OTC Bulletin Board: GDLN), the nation's only single-source provider of custom business research, reported first half and second quarter financial results for the period ended June 30, 2007.

Revenues in the first half of 2007 were $24,469,000, a 5.4% increase compared to $23,218,000 one year earlier.

Operating income in the first half of $23,000 represented a decline compared to $920,000 one year earlier. Net loss attributable to common shareholders in the first half was ($108,000) or ($0.01) per fully diluted share, as compared to net income attributable to common shareholders of $634,000 or $0.03 per fully diluted share in the prior year's first half.

Revenues in the second quarter of 2007 were $11,687,000, a 2.3% decrease compared to $11,962,000 one year earlier.

Operating loss in the second quarter of ($112,000) represented a decline compared to $586,000 of operating income one year earlier. Net loss attributable to common shareholders in the second quarter was ($108,000) or ($0.01) per fully diluted share, as compared to net income attributable to common shareholders of $365,000 or $0.02 per fully diluted share in the prior year's second quarter.

The operating and net income losses for the first half and second quarter ended June 30, 2007 include significant legal, accounting and other costs related to the pending acquisition of Guideline. On June 28, 2007, Guideline entered into an Agreement and Plan of Merger with infoUSA Inc., and Knickerbocker Acquisition Corp. The Agreement and Plan of Merger provides that Knickerbocker Acquisition Corp. will commence a cash tender offer to acquire (i) all of the issued and outstanding shares of common stock, par value $0.0001 per share, of Guideline (the 'Common Shares'), at a price of $1.35 per Common Share, in cash and (ii) all of the issued and outstanding shares of Series A Preferred Stock, par value $0.0001 per share, of Guideline (the 'Preferred Shares'), at a price equal to the liquidation preference of $1.50 per Preferred Share plus accrued dividends thereon, in cash.

As of June 30, 2007, Guideline had cash on hand of $1,465,000, short and long term debt of $1,505,000 and $1,877,000, respectively, and shareholder's equity of $24,002,000.

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.

    Investor and Press Contact:
    Scott Gerard
    212-645-4500
    Investorrelations@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 and other businesses, benefits of our strategies and initiatives, the success of new products and services introductions, growth or reductions 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)
    (unaudited)

                                                   Six Months Ended
                                                       June 30

                                                  2007           2006(3)

    Revenue                                 $24,469,000       $23,218,000

    Operating income                            $23,000          $920,000

    (Loss) Income Before Income
     Taxes and Cumulative Effect
     of Accounting Change                     ($184,000)         $612,000

    Income tax  benefit(provision)             $103,000          ($54,000)

    Cumulative effect of
     accounting change(1)                           $--           $96,000

    Net (loss) income                          ($81,000)         $654,000

    (Loss) income attributable to
     common shareholders'(2)                  ($108,000)         $634,000

    (Loss) Income Per Share --
     Basic and Diluted                           ($0.01)            $0.03

    Weighted Average Shares
     Outstanding -- Basic
     and Diluted                             20,977,942        20,677,922

(1) During the quarter ended March 31, 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.

(2) Net loss for the six months ended June 30, 2007 of ($81,000) was reduced by preferred dividends of $27,000, resulting in net loss attributable to common shareholders of ($108,000).

(3) In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ('SAB No. 108'), 'Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.' SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a Rollover and Iron Curtain approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings. The Company has historically used the Rollover Method. The provisions of SAB No. 108 were effective for the Company for the year ended December 31, 2006. In connection with the application of SAB No. 108, the Company recorded a $447,000 charge to retained earnings as of December 31, 2005 which relates to (i) a $300,000 overstatement of deferred tax assets that accumulated over several previous years and, (ii) a $147,000 understatement of accrued expenses related to travel costs.

The nature of the adjustments and the impact on the Company's consolidated balance sheet as of January 1, 2006 are presented below:

                                                 Increase (Decrease)

                         Accrued expenses and other
                                                     Deferred tax   Retained
                                                        assets      earnings

    Overstatement of deferred tax
     assets (1)                     $        --    $  ( 300,000) $   (300,000)
    Understatement of accrued
     expenses (2)                       147,000              --      (147,000)
                                    $   147,000        (300,000)     (447,000)

    (1)  The Company adjusted the tax basis of property, plant and equipment
    by reducing deferred tax assets as a result of an overstatement of these
    deferred tax assets that accumulated over several previous years.

    (2)  The Company recorded travel expenses incurred in 2005 as an expense
    in 2006 when these expenses were paid.  If the criteria in SAB No. 108
    were applied, these expenses should have been recorded in 2005.



    The impact of these adjustments on the six months ended June 30, 2006 is
summarized below:



                                      Previously    Adjustment    As Adjusted
                                       Reported
    For the six months
     ended June 30, 2006

    Deferred tax assets              $ 1,057,000   $ (300,000)     $ 757,000
    Accrued expenses                   2,148,000      (11,000)     2,137,000
    Shareholders' equity              22,095,000     (290,000)    21,805,000
    Selling, general &
     administrative expenses           8,372,000      (72,000)     8,300,000
    Net income                           588,000       66,000        654,000
    Net income attributable to
     shareholders                        568,000       66,000        634,000
    Earnings per share                      0.03         0.00           0.03



    GUIDELINE, INC. COMPARATIVE
    STATEMENTS OF INCOME (LOSS)
    (unaudited)
                                                       Three Months Ended
                                                             June 30

                                                        2007         2006(2)

    Revenue                                        $11,687,000   $11,962,000

    Operating (loss) income                          ($112,000)     $586,000

    (Loss) Income Before Income Taxes                ($217,000)     $411,000

    Income tax  benefit (provision)                   $122,000       (36,000)

    Net (loss) income                                 ($95,000)     $375,000

    (Loss) income attributable to
     common shareholders'(1)                         ($108,000)     $365,000

    (Loss) Income Per Share --
     Basic and Diluted                                  ($0.01)        $0.02

    Weighted Average Shares
     Outstanding -- Basic and Diluted               21,014,351    20,905,842

(1)Net loss for the three months ended June 30, 2007 of ($95,000) was reduced by preferred dividends of $13,000, resulting in net loss attributable to common shareholders of ($108,000).

(2) In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ('SAB No. 108'), 'Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.' SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a Rollover and Iron Curtain approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings. The Company has historically used the Rollover Method. The provisions of SAB No. 108 were effective for the Company for the year ended December 31, 2006. In connection with the application of SAB No. 108, the Company recorded a $447,000 charge to retained earnings as of December 31, 2005 which relates to (i) a $300,000 overstatement of deferred tax assets that accumulated over several previous years and, (ii) a $147,000 understatement of accrued expenses related to travel costs.

The nature of the adjustments and the impact on the Company's consolidated balance sheet as of January 1, 2006 are presented below:

                                                Increase (Decrease)

                         Accrued expenses and other
                                                     Deferred tax   Retained
                                                        assets      earnings

    Overstatement of deferred tax
     assets (1)                     $        --    $   (300,000) $   (300,000)
    Understatement of accrued
     expenses (2)                       147,000              --      (147,000)
                                    $   147,000        (300,000)     (447,000)


    (1)  The Company adjusted the tax basis of property, plant and equipment
    by reducing deferred tax assets as a result of an overstatement of these
    deferred tax assets that accumulated over several previous years.

    (2)  The Company recorded travel expenses incurred in 2005 as an expense
    in 2006 when these expenses were paid.  If the criteria in SAB No. 108
    were applied, these expenses should have been recorded in 2005.



    The impact of these adjustments on the three months ended June 30, 2006 is
summarized below:



                                         Previously   Adjustment   As Adjusted
                                          Reported
    For the three months
     ended June 30, 2006

    Deferred tax assets               $   1,057,000  $ (300,000)   $   757,000
    Accrued expenses                      2,148,000     (11,000)     2,137,000
    Shareholders' equity                 22,095,000    (290,000)    21,805,000
    Selling, general &
     administrative expenses              4,337,000     (11,000)     4,326,000
    Net income                              364,000      11,000        375,000
    Net income attributable to
     shareholders                           354,000      11,000        365,000
    Earnings per share                         0.02        0.00           0.02



    GUIDELINE, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets

                                                      June 30     December 31
                                                        2007         2006
                                                    (unaudited)

                          Assets

    Cash and cash equivalents                       $1,465,000     $2,939,000
    Accounts receivable, net                        10,332,000      9,483,000
    Deferred tax assets                                371,000        311,000
    Prepaid expenses and other
     current assets                                  1,017,000        657,000

      Total Current Assets                          13,185,000     13,390,000

    Property, Plant & Equipment, net                 1,971,000      2,228,000
    Goodwill, net                                   21,322,000     21,322,000
    Intangibles, net                                 1,952,000      2,137,000
    Deferred financing fees, net                       428,000        504,000
    Other assets                                       728,000        585,000

      Total assets                                 $39,586,000    $40,166,000

                          Liabilities and Shareholders' Equity

    Trade accounts payable                         $2,882,000      $2,820,000
    Accrued expenses and other                      2,250,000       4,425,000
    Unearned retainer income                        6,011,000       4,351,000
    Current maturities of notes payable             1,505,000       2,005,000
    Uncertain tax positions                           148,000              --

      Total current liabilities                    12,796,000      13,601,000

    Notes payable                                   1,877,000       2,384,000
    Deferred compensation and other
     liabilities                                       61,000         298,000
    Uncertain tax positions                           148,000              --

      Total liabilities                            14,882,000      16,283,000

    Redeemable, convertible,
     preferred stock                                  702,000         674,000
    Shareholders' Equity                           24,002,000      23,209,000

      Total Liabilities and
       Shareholders' Equity                       $39,586,000     $40,166,000

SOURCE Guideline, Inc.

Source: PR Newswire (August 14, 2007 - 8:01 AM EDT)

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