<PAGE>

                                                                      Exhibit 13


SELECTED FINANCIAL DATA




<TABLE>
<CAPTION>

                                        1994                1995                1996                 1997                 1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                <C>                 <C>                 <C>                  <C>             
Revenue                             $  55,483,032      $   64,608,724      $  83,795,562       $  100,064,294       $    136,532,924
------------------------------------------------------------------------------------------------------------------------------------
Income from operations                  3,294,736           5,194,779          8,397,948           10,281,163             14,559,481
------------------------------------------------------------------------------------------------------------------------------------
Net income                              1,434,167           2,226,119          4,277,656            5,822,098              9,009,949
Basic earnings per share                      .20                 .29                .57                  .80                   1.02
------------------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share                    .19                 .29                .55                  .77                    .98

------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents           $     911,209      $    3,530,157      $     129,428       $   36,444,256       $     28,475,066
------------------------------------------------------------------------------------------------------------------------------------
Working capital                         3,624,220           5,993,486          3,104,192           40,160,854             25,859,308
------------------------------------------------------------------------------------------------------------------------------------
Total assets                           31,681,983          34,376,637         38,385,227           86,891,747            105,454,474
Long-term obligations                  11,453,019          10,955,870         10,742,988           10,409,088             11,197,130
------------------------------------------------------------------------------------------------------------------------------------
Cash dividends declared                     7 1/4(cent)         9 1/2(cent)           10(cent)         --                   --
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>

                                              MARKET PRICE STATISTICS
---------------------------------------------------------------------------------

                                        1997                        1998
---------------------------------------------------------------------------------
                                 High          Low          High          Low
---------------------------------------------------------------------------------

<S>                            <C>          <C>           <C>          <C>     
4th Quarter                    $ 24 3/4      $ 16 3/4       $ 28 1/2     $ 17 5/8
3rd Quarter                      31 5/8        10 1/4         28 1/2       18 1/2
2nd Quarter                      14             9 1/8         24 1/4       19
1st Quarter                      10 5/8         7             20 15/16     15 1/4
---------------------------------------------------------------------------------
</TABLE>

Market Facts, Inc. common stock trades on The Nasdaq Stock Marketsm under the
symbol MFAC.


All common share and per share amounts, unless indicated otherwise, have been
adjusted to give effect to a 2-for-1 stock split in December 1996 and an
additional 2-for-1 stock split in May 1997. The Company discontinued cash
dividends in 1997 to invest in its future growth. See Management's Discussion
and Analysis. The Company does not expect to pay dividends in the future. As of
February 26, 1999, there were approximately 710 holders of record of Market
Facts, Inc. common stock and the closing price of the common stock was $23.50.



<PAGE>





Management's Discussion and Analysis of Financial Condition and Results of
Operations

General

     Market Facts is a leading provider of custom market research services.
Custom market research involves the measurement of customer beliefs, attitudes
and behavior toward particular products, services, concepts or advertising.
Founded in 1946, the Company provides quantitative and qualitative marketing
research both domestically and internationally through its network of twenty
offices and its global affiliations.

Acquisitions

     In August 1998, the Company acquired the net assets of Product
Intelligence, Inc., a market research firm operating a national network of
multimedia computerized consumer interviewing stations in 35 separate markets
that provide clients with rapid turnaround of market research requiring consumer
exposure to marketing elements. The purchase price included $4.5 million in cash
and shares of Market Facts' common stock, and additional consideration
contingent upon future earnings.

     In March 1998, the Company acquired the net assets of Tandem Research
Associates, Inc., a 16 year-old firm providing specialized custom and
multi-client research products and services to leading pharmaceutical companies
and emerging biotech firms. The purchase price included $14.4 million in cash
and additional consideration contingent upon future earnings.

     In January 1998, the Company completed the acquisition of the outstanding
stock of Strategy Research Corporation, a full service market research company
specializing in Hispanic research in the U.S and Latin America. The purchase
price included $1.2 million in cash and additional consideration contingent upon
future earnings.

     In July 1997, the Company acquired all of the outstanding stock of
BAIGlobal, Inc., a full service market research and information company offering
a complete range of research services--quantitative, qualitative and competitive
tracking--in the United States and internationally. The purchase price included
$3.7 million in cash and additional consideration contingent upon future
earnings.

Results of Operations: Comparison of 1998 to 1997

     The Company had revenue of $136.5 million during 1998, an increase of 36.4%
over 1997. Approximately $20.4 million or 56% of the increase in revenue was due
to the growth of core business. Of the growth in core business, 60% was from
business with existing clients and the remainder from business with clients for
whom the Company did not perform any research services during the previous
fiscal year. Approximately $16.1 million or 44% of the increase in revenue was
due to the acquisitions of BAIGlobal, Strategy Research, Tandem Research and
Product Intelligence.

     The Company experienced revenue growth across most of its major industry
groups as follows:


<TABLE>
<CAPTION>

                                    1998                    Change
                                   Revenue      % of         from
INDUSTRY                           (000S)       TOTAL        1997
-----------------------------------------------------------------
<S>                             <C>              <C>        <C>  
Consumer package goods          $  45,823        34%        26.9%
Financial services                 19,641        14         94.1
Healthcare                         19,254        14        140.7
Business services                  15,861        12         13.8
Consumer durables                  11,347         8         13.5
Retail and restaurants              9,227         7         (1.4)
Telecommunications                  6,365         5         57.8
ALL OTHER                           9,015         6          6.1
----------------------------------------------------------------
Total                           $ 136,533       100%        36.4%
----------------------------------------------------------------
----------------------------------------------------------------
</TABLE>


                                        2
<PAGE>

     Gross margin for 1998 was $59.5 million, an increase of 36.1% over 1997.
The increase in gross margin was due to the growth in revenue. Gross margin as a
percentage of revenue was 43.5% in 1998 compared to 43.6% in 1997.

     Operating expenses for 1998 rose by $11.5 million, an increase of 34.5%
compared to 1997. The increase was due primarily to higher operating expenses to
support the growth in core business, including higher personnel-related expenses
and investments in information technology, and the inclusion of the operating
expenses from the companies acquired in 1997 and 1998. Operating expenses as a
percentage of revenue decreased from 33.4% in 1997 to 32.9% in 1998.

     The 1998 provision for income taxes reflected an effective tax rate of
38.9% in 1998, consistent with the 1997 effective tax rate.

     Net income for 1998 rose 54.8% to a record $9.0 million or 6.6% of revenue
compared with $5.8 million and 5.8% of revenue in 1997. Diluted earnings per
share increased by 27.3% to $.98 in 1998 from $.77 in 1997.


Results of Operations: Comparison of 1997 to 1996

     The Company had revenue of $100.1 million during 1997, an increase of 19.4%
over 1996. The increase in revenue was due primarily to the addition of clients
for whom the Company did not perform any research services during the previous
fiscal year, the impact of acquiring BAIGlobal and continued expansion of
marketing research services within the Company's existing client base.

     The Company experienced revenue growth across most of its major industry
groups as follows:

<TABLE>
<CAPTION>

                                   1997                    Change
                                  Revenue      % of         from
INDUSTRY                          (000S)       TOTAL        1996
----------------------------------------------------------------
<S>                             <C>            <C>        <C>  
Consumer package goods          $  36,123        36%        15.8%
Business services                  13,940        14         15.0
Financial services                 10,121        10         24.3
Consumer durables                   9,995        10         41.7
Retail and restaurants              9,358         9         33.4
Healthcare                          7,998         8         57.8
Telecommunications                  4,034         4        (11.6)
ALL OTHER                           8,495         9         (1.6)
-----------------------------------------------------------------
Total                           $ 100,064       100%        19.4%
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>

     Gross margin for 1997 was $43.7 million, an increase of 22.6% over 1996.
The increase in gross margin was due to the growth in revenue. Gross margin as a
percentage of revenue was 43.6% in 1997 compared to 42.5% in 1996. The
improvement in the gross margin percentage was primarily attributable to higher
gross margins on telephone business.

     Operating expenses for 1997 rose by $6.2 million, an increase of 22.7%
compared to 1996. The increase was due primarily to higher personnel-related
expenses to support the growth in business, the impact of acquiring BAIGlobal
and continued investments in new products and technologies.Operating expenses as
a percentage of revenue increased from 32.5% in 1996 to 33.4% in 1997.

     The 1997 provision for income taxes reflected an effective tax rate of
38.9% versus 42.1% in 1996. The decrease in the effective tax rate was primarily
due to a reduction in foreign, state and local income taxes.

     Net income for 1997 rose 36.1% to $5.8 million or 5.8% of revenue compared
with $4.3 million and 5.1% of revenue in 1996. Diluted earnings per share
increased by 40.0% to $.77 in 1997 from $.55 in 1996.




                                        3
<PAGE>


Liquidity and Capital Resources

     The Company's liquidity depends primarily upon its net income and
management of its working capital, principally accounts receivable, accounts
payable and accrued expenses. Historically, the Company has financed its
operations through cash generated from operating activities and bank lines of
credit.

     In October 1997, the Company generated $36.9 million in net proceeds from a
public offering of its common stock. At December 31, 1998, the Company had cash
and cash equivalents of $28.5 million. The Company intends to utilize this cash
for working capital and other general corporate purposes, including
acquisitions, investments in technology, new product development and joint
ventures.

     During 1998, cash and cash equivalents decreased by $8.0 million. The
decrease was due primarily to the acquisitions of Strategy Research, Tandem
Research and Product Intelligence, partially offset by cash provided by
operating activities. During 1997, cash and cash equivalents increased by $36.3
million. The increase was due primarily to the net proceeds from the Company's
public offering. During 1996, cash and cash equivalents decreased by $3.4
million. The decrease was due primarily to the purchase of the Company's common
stock pursuant to a self-tender offer partially offset by the net proceeds from
the issuance of a convertible note and short-term borrowings.

     Net cash flow provided by operating activities was $16.1 million in 1998
compared to $10.4 million in 1997 and $4.5 million in 1996. The increase in 1998
was due primarily to higher net income and higher non-cash expenses for
depreciation and amortization. The increase in 1997 as compared to 1996 was due
primarily to improved billing and collection of client accounts receivable and
increased net income.

     Cash used in investing activities was $23.9 million in 1998 compared to
$6.5 million in 1997 and $3.9 million in 1996. The increase in 1998 was due
primarily to the acquisitions made during 1998 and higher purchases of property
and equipment. The increase in 1997 as compared to 1996 was due to the
acquisition of BAIGlobal, net of acquired cash, partially offset by lower
purchases of property and equipment.

     Cash used in financing activities was $.2 million in 1998 compared to cash
provided of $32.4 million in 1997 and cash used in financing activities of $4.0
million in 1996. Cash provided in 1997 was due primarily to the proceeds from
the public offering.

     The Company expects that additional investments in equipment and facilities
will continue to be necessary to support the anticipated growth in business and
that capital expenditures in 1999 will be equal to or higher than 1998.

     The Company's available borrowings under established bank credit facilities
were $13.7 million during 1998 and 1997. There were no borrowings outstanding at
December 31, 1998 and 1997.

     At its October 1996 meeting, the Board of Directors established a policy to
omit future cash dividends in order to fund the continued development and growth
of the Company's business.

     The Company believes that its cash on hand, cash flow from operations and
borrowings available from its bank credit facilities will be sufficient to meet
its working capital expenditure requirements for the foreseeable future. It is
the Company's intention to continue to pursue acquisi-tion opportunities as a
means to grow, and these acquisi-tions may require an amount of capital that
exceeds its cash on hand, cash expected to be provided from operations and cash
available from existing bank arrangements.


Year 2000

     The Company recognizes the need to identify and correct problems associated
with its existing computer systems and certain non-information technology
systems as the Year 2000 approaches. Both internal and external resources are
being used to identify, to correct, and to test these financial, information and
operational systems for Year 2000 compliance. The Company has assessed its
internal systems for Year 2000 compliance and has made inquiries of its
suppliers to assess the potential impact on the Company's operations if key
third parties are not successful in converting their systems in a timely manner.
The Company's assessment of its internal systems has been completed. All
inquiries of third parties have been made, however, the Company is awaiting some
responses. The Company expects 



                                       4
<PAGE>

its full review of Year 2000 issues, including its review of third party
compliance, to be completed by March 31, 1999.

     Costs and expenses incurred through December 31, 1998 in addressing the
Year 2000 issue have not been material. Based on its assessment efforts to date,
the Company does not believe that its operations will be materially impacted by
a failure of its internal systems to be Year 2000 compliant and has identified
approximately $600,000 in costs to be incurred in 1999 in order to replace
certain of its telephone systems and computer equipment and its human
resource/payroll information system that are not Year 2000 compliant. The
Company expects most of these costs will be capitalized.

     Although the Company does not at this time believe that its business
operations or financial condition will be materially impacted by a failure of
its suppliers to be Year 2000 compliant, it is difficult for the Company to
assess the likelihood, or the impact on its business, of such entities' failure
until its assessment is completed. The Company currently anticipates that
additional expense and capital expenditures associated with its Year 2000
compliance plan will be necessary, although the Company does not expect such
costs to have a material adverse effect on its financial position or results of
operations. The actual amount of these costs will not be known, however, until
the Company's review of the Year 2000 issue has been completed and tested.

     The Company anticipates that its remediation efforts and necessary testing
related to the Year 2000 issue will be completed by September 1999. The Company
is in the process of developing contingency plans in the event of Year 2000
failures, and anticipates that these contingency plans will be in place by
September 1999.

     The Company's expectations about future costs necessary to achieve Year
2000 compliance, the impact on its operations and its ability to bring each of
its systems into Year 2000 compliance are subject to a number of uncertainties
that could cause actual results to differ materially. Such factors include the
following: (i) The Company may not be successful in properly identifying all
systems and programs that contain two-digit year codes; (ii) The nature and
number of systems which require reprogramming, upgrading or replacement may
exceed the Company's expectations in terms of complexity and scope; (iii) The
Company may not be able to complete all remediation and testing necessary in a
timely matter; (iv) The Company has no control over the ability of its key
suppliers and customers to achieve Year 2000 compliance; and (v) The impact of
the Year 2000 problem on key customers may be of such magnitude that it may
adversely affect their demand for the Company's products and services.


Quantitative and Qualitative Disclosures about Market Risk

     The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's cash equivalents and long-term debt obligation. The
Company does not use derivative financial instruments. The Company places its
investments with high credit quality issuers and limits the amount of credit
exposure to any one issuer. As stated in its policy, the Company is averse to
principal loss and ensures the safety and preservation of its invested funds by
limiting default risk, market risk and reinvestment risk.

     The Company mitigates default risk by investing in high credit quality
securities. The portfolio includes only securities with active secondary or
resale markets to ensure portfolio liquidity. All cash equivalents held at
December 31, 1998 mature in 28 days or less.

     The Company has no cash flow exposure due to rate changes for its long-term
debt obligation as the rate is fixed. The Company has primarily entered into
short-term debt obligations to support acquisition and general corporate
purposes including capital expenditures and working capital needs.


     The Company is exposed to potential gains or losses from foreign currency
fluctuations affecting earnings denominated in Canadian dollars. The Company
also transacts business in various foreign countries and pays vendors in foreign
currencies. The Company currently does not hedge such foreign currency
transactions with forward contracts as any potential losses are not material and
are typically passed on to clients.





                                       5
<PAGE>


Inflation

     Inflation has historically had only a minor effect on the Company's results
of operations and its internal and external sources of liquidity and working
capital because the Company has generally been able to increase prices to
reflect cost increases due to inflation.


Forward-Looking Statements

     Certain statements contained in the Message to Shareholders and in this
Management's Discussion and Analysis section constitute "forward-looking
statements" made in reliance upon the safe harbor contained in Section 21E of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
include those relating to anticipated growth, levels of capital expenditures,
acquisition opportunities, the addition of staff, the development of new
products and services, and the need to acquire additional real estate. The
Company's prospects for growth are subject to significant economic and other
uncertainties, some of which are beyond the Company's control. Factors which
could adversely impact the Company's revenues include: (i) a downturn in general
economic conditions which could cause a decrease in spending on market research
projects, (ii) a change in client management personnel which could cause the
client to lower its purchases from the Company, and (iii) the impact of
competitive pricing and products which could cause a reduction or loss in client
business. In addition, should the technology used by the industry change so as
to differ materially from the type of technology relied upon by the Company, the
Company's business could be adversely affected. Further, the Company's ability
to grow through acquisitions will be dependent upon, among other things, the
availability of suitable acquisition candidates and related financing on terms
deemed reasonable by the Company, and the Company's ability to successfully
integrate future acquisitions into its existing business.

     Finally, expansion into global markets is subject to the ability to fully
understand cultural differences, the availability of suitable joint venture or
acquisition candidates, risks of foreign currency fluctuations and other
uncertainties. Any of these factors could cause the Company's actual results to
differ materially from those described in the forward-looking statements.


Recently Issued Financial Accounting Standards

     In March 1998, the American Institute of Certified Public Accountants
released Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 requires
capitalization of certain costs of computer software developed or obtained for
internal use, provided that those costs are not research and development. SOP
98-1 is effective for fiscal years beginning after December 15, 1998. The
Company is currently evaluating the requirements of SOP 98-1 and the effects, if
any, on our current policy of accounting for software costs.

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("Statement 133"). Implementation of Statement 133 is
required for periods beginning after June 15, 1999. Statement 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. It requires that derivatives be recognized in the balance sheet at
fair value and specifies the accounting for changes in fair value. The Company
currently does not hold derivative instruments or engage in hedging activities.




                                       6
<PAGE>




CONSOLIDATED STATEMENTS OF EARNINGS


<TABLE>
<CAPTION>

                                                                            1998                   1997                  1996
                                                                            ----                   ----                  ----

<S>                                                                  <C>                      <C>                   <C>           
REVENUE                                                              $     136,532,924        $  100,064,294        $   83,795,562
DIRECT COSTS:
    Payroll                                                                 24,715,160            18,071,133            16,167,308
    Other expenses                                                          52,358,850            38,321,485            32,015,577
------------------------------------------------------------------------------------------------------------------------------------
             Total                                                          77,074,010            56,392,618            48,182,885
------------------------------------------------------------------------------------------------------------------------------------
             Gross Margin                                                   59,458,914            43,671,676            35,612,677

OPERATING EXPENSES:
    Selling                                                                  4,725,959             3,324,273             2,600,727
    General and administrative                                              40,173,474            30,066,240            24,614,002
------------------------------------------------------------------------------------------------------------------------------------
             Total                                                          44,899,433            33,390,513            27,214,729
------------------------------------------------------------------------------------------------------------------------------------
             Income From Operations                                         14,559,481            10,281,163             8,397,948
------------------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
    Interest expense                                                        (1,100,515)           (1,131,920)           (1,214,445)
    Interest income                                                            924,778               298,141               126,008
    Other income, net                                                          354,205                87,714                75,145
------------------------------------------------------------------------------------------------------------------------------------
             Total                                                             178,468              (746,065)           (1,013,292)
------------------------------------------------------------------------------------------------------------------------------------

Income Before Provision For Income Taxes                                    14,737,949             9,535,098             7,384,656
Provision For Income Taxes                                                   5,728,000             3,713,000             3,107,000

------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                           $       9,009,949        $    5,822,098        $    4,277,656
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE                                             $            1.02        $          .80        $          .57
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE                                           $             .98        $          .77        $          .55
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>





CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


<TABLE>
<CAPTION>

                                                                            1998                   1997                  1996
                                                                            ----                   ----                  ----


<S>                                                                  <C>                      <C>                   <C>           
NET INCOME                                                           $       9,009,949        $    5,822,098        $    4,277,656
------------------------------------------------------------------------------------------------------------------------------------

OTHER COMPREHENSIVE LOSS:
    Foreign currency translation adjustments                                  (100,430)              (58,313)               (6,175)
------------------------------------------------------------------------------------------------------------------------------------

COMPREHENSIVE INCOME                                                 $       8,909,519        $    5,763,785        $    4,271,481
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


  
<PAGE>




CONSOLIDATED BALANCE SHEETS

                                                          ASSETS

<TABLE>
<CAPTION>

                                                                                                  1998                   1997
                                                                                                  ----                   ----


CURRENT ASSETS:
<S>                                                                                        <C>                      <C>           
    Cash and cash equivalents                                                              $      28,475,066        $   36,444,256
    Bank certificate of deposit                                                                       50,000                50,000
    Accounts receivable:
      Trade, less allowance for doubtful accounts of
        $1,177,460 and $1,101,551 in 1998 and 1997, respectively                                  20,287,698            20,085,658
      Other                                                                                           49,269                60,189
    Revenue earned on contracts in progress in excess of billings                                  5,724,794             4,618,736
    Deferred income taxes                                                                            675,499             1,136,254
    Prepaid expenses and other assets                                                                540,359               703,167
------------------------------------------------------------------------------------------------------------------------------------
             Total Current Assets                                                                 55,802,685            63,098,260
------------------------------------------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT, AT COST:
    Land                                                                                           1,221,459             1,221,459
    Building and building improvements                                                            13,260,298            13,242,699
    Computer and office equipment                                                                 14,986,398            10,108,298
    Furniture and fixtures                                                                         4,427,862             3,910,442
    Leasehold improvements                                                                         1,982,387             1,735,739
    Vehicles                                                                                         240,283               137,572
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                  36,118,687            30,356,209
    Less accumulated depreciation and amortization                                               (15,636,212)          (13,274,711)
------------------------------------------------------------------------------------------------------------------------------------
             Net Property and Equipment                                                           20,482,475            17,081,498
------------------------------------------------------------------------------------------------------------------------------------

OTHER ASSETS:
    Goodwill and other intangibles, net of accumulated amortization
      of $1,036,545 and $229,772 in 1998 and 1997, respectively                                   27,818,619             4,959,752
    Deferred income taxes, noncurrent                                                                789,881             1,063,833
    Investment in affiliated companies                                                               560,814               688,404
------------------------------------------------------------------------------------------------------------------------------------
             Total Other Assets                                                                   29,169,314             6,711,989
------------------------------------------------------------------------------------------------------------------------------------
             Total Assets                                                                  $     105,454,474        $   86,891,747
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.




                                       7
<PAGE>






                                           LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                                  1998                   1997
                                                                                                  ----                   ----


CURRENT LIABILITIES:
<S>                                                                                        <C>                      <C>           
    Accrued expenses                                                                       $      14,074,491        $   10,052,639
    Billings in excess of revenues earned on contracts in progress                                 9,760,679             9,267,185
    Accounts payable                                                                               4,988,039             2,380,596
    Income taxes                                                                                     673,879               945,449
    Current portion of obligations under capital leases                                              295,893               154,991
    Current portion of long-term debt                                                                150,396               136,546
------------------------------------------------------------------------------------------------------------------------------------
             Total Current Liabilities                                                            29,943,377            22,937,406
------------------------------------------------------------------------------------------------------------------------------------

LONG-TERM LIABILITIES:
    Long-term debt                                                                                10,008,714            10,159,110
    Obligations under capital leases, noncurrent portion                                           1,188,416               249,978
------------------------------------------------------------------------------------------------------------------------------------
             Total Long-Term Liabilities                                                          11,197,130            10,409,088
------------------------------------------------------------------------------------------------------------------------------------
             Total Liabilities                                                                    41,140,507            33,346,494

STOCKHOLDERS' EQUITY:
    Preferred stock, no par value; 500,000 shares authorized;
      Series A-none issued; Series B-100 shares issued                                              --                      --
    Common stock, $1 par value; 15,000,000 shares authorized;
      10,910,058 and 10,875,258 shares issued in 1998 and 1997, respectively                      10,910,058            10,875,258
    Capital in excess of par value                                                                46,172,329            44,707,038
    Accumulated other comprehensive loss--foreign currency translation adjustments                   (234,062)             (133,632)
    Retained earnings                                                                             21,682,109            12,672,160
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                  78,530,434            68,120,824
    Less treasury common stock at cost; 1,970,557 and 2,042,550 shares
      in 1998 and 1997, respectively                                                             (13,612,265)          (13,891,966)
    Less other transactions involving common stock                                                  (604,202)             (683,605)
------------------------------------------------------------------------------------------------------------------------------------
             Total Stockholders' Equity                                                           64,313,967            53,545,253
------------------------------------------------------------------------------------------------------------------------------------
             Total Liabilities and Stockholders' Equity                                    $     105,454,474        $   86,891,747
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       8

<PAGE>




CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                                            1998                   1997                  1996
                                                                            ----                   ----                  ----

PREFERRED STOCK:
<S>                                                                  <C>                      <C>                   <C>     
    Balance at beginning and end of year                             $       --               $     --              $     --
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

COMMON STOCK:
    Balance at beginning of year                                     $      10,875,258        $    8,966,258        $    8,090,012
    Common stock issued                                                         34,800             1,909,000             2,583,860
    Impact of stock splits                                                   --                     --                  (1,707,614)
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $      10,910,058        $   10,875,258        $    8,966,258
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

CAPITAL IN EXCESS OF PAR VALUE:
    Balance at beginning of year                                     $      44,707,038        $    9,497,671        $    2,328,137
    Common and treasury stock issued                                           813,852            35,024,396             7,169,434
    Tax benefit from stock related awards                                      651,439               184,971              --
    Preferred stock issued                                                   --                     --                         100
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $      46,172,329        $   44,707,038        $    9,497,671
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE LOSS:
    Balance at beginning of year                                     $        (133,632)       $      (75,319)       $      (69,144)
    Foreign currency translation adjustments                                  (100,430)              (58,313)               (6,175)
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $        (234,062)       $     (133,632)       $      (75,319)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

RETAINED EARNINGS:
    Balance at beginning of year                                     $      12,672,160        $    6,850,062        $    3,541,626
    Net income                                                               9,009,949             5,822,098             4,277,656
    Dividends declared on common stock:
      Cash--10(cent)per share in 1996                                             --                     --               (738,939)
    Impact of stock splits                                                        --                     --               (230,281)
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $      21,682,109        $   12,672,160        $    6,850,062
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

TREASURY COMMON STOCK:
    Balance at beginning of year                                     $     (13,891,966)       $  (13,891,966)       $   (1,189,029)
    Treasury stock issued                                                      279,701                   --               --
    Treasury stock purchased                                                      --                     --            (12,702,937)
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $     (13,612,265)       $  (13,891,966)       $  (13,891,966)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

OTHER TRANSACTIONS INVOLVING COMMON STOCK:
    Balance at beginning of year                                     $        (683,605)       $     (821,496)       $     (651,795)
    Payments received on demand notes receivable                                23,971                82,459                19,867
    Vesting of restricted stock and demand notes receivable                     55,432                55,432                55,432
    Issuance of demand notes receivable                                           --                     --               (245,000)
------------------------------------------------------------------------------------------------------------------------------------
    Balance at end of year                                           $        (604,202)       $     (683,605)       $     (821,496)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY                                           $      64,313,967        $   53,545,253        $   10,525,210
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       9
<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            1998                   1997                  1996
                                                                            ----                   ----                  ----

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>                <C>                   <C>           
    Net income                                                             $ 9,009,949        $    5,822,098        $    4,277,656
    Adjustments to reconcile net income to net cash
         provided by operating activities:
      Depreciation and amortization                                          4,065,792             2,882,935             2,495,354
      Deferred income taxes                                                    390,564               (79,970)             (374,049)
      Vesting of restricted stock and demand notes receivable                   55,432                55,432                55,432
      Net gain on disposal of property and equipment                           (85,141)              (17,336)              (27,715)
      Income from affiliated companies                                        (123,066)             --                    --
      Changes in assets and liabilities, net of effects from acquisition:
         Accounts receivable                                                   777,289            (3,126,707)           (5,176,560)
         Prepaid expenses and other assets                                    (264,808)             (189,607)              (30,386)
         Billings in excess of (less than) revenues earned on
             contracts in progress                                          (1,201,106)            3,658,353               242,447
         Accounts payable and accrued expenses                               2,760,038             1,062,386             2,552,391
         Income taxes                                                          721,975               360,188               496,878
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by operating activities                      16,106,918            10,427,772             4,511,448
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisitions, net of acquired cash                                     (19,971,065)           (3,918,677)             --
    Purchases of property and equipment                                     (4,144,833)           (2,068,536)           (3,234,009)
    Proceeds from notes receivable                                             212,315               106,652                52,244
    Investment in affiliated companies                                          36,561              (478,404)             (210,000)
    Investment in notes receivable                                           --                     (165,000)             (246,200)
    Proceeds from the sale of property                                       --                       24,798                38,297
    Payment for acquisition of MFCL                                          --                     --                    (339,126)
------------------------------------------------------------------------------------------------------------------------------------
             Net cash used in investing activities                         (23,867,022)           (6,499,167)           (3,938,794)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayment of short-term borrowings                                      (6,653,936)          (14,237,672)          (12,100,000)
    Proceeds from short-term borrowings                                      6,503,936            12,487,672            13,850,000
    Reduction of obligations under capital leases and long-term debt          (334,098)             (543,689)              (96,628)
    Proceeds from exercise of stock options                                    304,588                39,555               386,250
    Proceeds from issuance of common stock, net                              --                   36,893,841              --
    Repayment of notes payable to BAIGlobal's selling shareholders           --                   (2,250,000)             --
    Purchase of treasury stock                                               --                     --                 (12,702,937)
    Proceeds from issuance of convertible note                               --                     --                   8,250,000
    Payment of stock issuance costs                                          --                     --                    (820,851)
    Dividends paid                                                           --                     --                    (738,939)
    Proceeds from issuance of preferred stock                                --                     --                         100
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by (used in) financing activities              (179,510)           32,389,707            (3,973,005)
------------------------------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                        (29,576)               (3,484)                 (378)
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (7,969,190)           36,314,828            (3,400,729)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                              36,444,256               129,428             3,530,157
------------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                   $28,475,066        $   36,444,256        $      129,428
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
CASH PAID DURING THE YEAR FOR:
    Interest                                                               $ 1,100,515        $    1,142,265        $    1,237,504
    Income taxes, net of refunds                                             4,615,750             3,452,164             2,982,379
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF NON CASH ACTIVITIES:
    Capital lease obligations incurred on lease of equipment               $ 1,257,313        $     --              $      109,463
    Treasury stock issued for acquisition                                      823,765              --                    --
    Conversion of convertible note into common stock                         --                     --                   8,250,000
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.



                                       10
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies:

a.   Principles of Consolidation and Line of Business:

The accompanying consolidated financial statements include the accounts of
Market Facts, Inc. and its subsidiaries (Company). All significant intercompany
transactions have been eliminated.

The Company operates in a single business segment that designs, executes and
interprets market research conducted on behalf of its clients, which include a
majority of the largest 100 multinational consumer products and service
companies, as well as many government agencies. In 1998, no single client
accounted for over 10% of revenue. One client, Procter & Gamble, accounted for
11% and 10% of total 1997 and 1996 revenue, respectively. Revenue from clients
located in foreign countries, primarily Canada, amounted to $7,000,236,
$5,686,580 and $6,425,279 in 1998, 1997 and 1996, respectively.

b.   Revenue Recognition:

The Company recognizes revenue under the percentage of completion method of
accounting. Revenue on client projects is recognized as services are performed.
Losses expected to be incurred on jobs in progress are charged to income as soon
as such losses are known. Revenue earned on contracts in progress in excess of
billings is classified as a current asset. Amounts billed in excess of revenue
earned are classified as a current liability. Client projects are expected to be
completed within a twelve month period.

c.   Cash and Cash Equivalents:

The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

d.   Property and Equipment:

Maintenance and repairs are expensed and renewals and betterments are
capitalized. Upon retirement or disposition of property and equipment, the
applicable cost and accumulated depreciation and amortization are removed from
the accounts and the resulting gains or losses are included in income.

Depreciation is provided on the straight-line method at rates considered
adequate to depreciate the costs of property and equipment over their estimated
useful lives. The useful life of the building is 31 1/2 years, while all other
owned assets have estimated useful lives of three to ten years.

Equipment under capital leases is recorded at the lower of the fair market value
of the leased property or the present value of the minimum lease payments.
Amortization of the leased equipment is computed using the straight-line method
over the lease term.

Property and equipment are reviewed for impairment whenever events or
circumstances indicate that the asset's undiscounted expected cash flows are not
sufficient to recover its carrying value. The Company measures an impairment
loss by comparing the fair value of the asset to its carrying amount.

e.   Income Taxes:

The Company applies an asset and liability approach to account for income taxes.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.




                                       11
<PAGE>


f.   Earnings Per Share:

Effective December 15, 1997, the Company adopted State-ment of Financial
Accounting Standards No. 128, "Earnings Per Share." Basic earnings per share
were computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year. Diluted earnings per share were
determined giving effect to all dilutive potential common shares that were
outstanding during the year.

g.   Foreign Currency Translation:

Non-U.S. subsidiaries' assets and liabilities have been translated using the
exchange rate in effect at the balance sheet date. Results of operations are
translated using the average exchange rate prevailing throughout the period.
Resulting translation gains and losses are reported as a component of
stockholders' equity.

h. Disclosure of Certain Significant Risks and Uncertainties:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

i.   Financial Instruments:

The carrying amounts of the Company's financial instruments approximate their
fair values with the exception of long-term debt which has a fair value of
approximately $8,689,895 and $8,771,351 at December 31, 1998 and 1997,
respectively.

j.   Goodwill and Other Intangibles:

Goodwill represents the unamortized cost in excess of the fair value of net
assets acquired and is amortized on a straight-line basis over the period of
expected benefit ranging from 15 to 25 years. Other intangibles are recorded at
cost and amortized using the straight-line method over their estimated economic
lives. The Company periodically evaluates the recoverability of goodwill and
other intangibles by assessing whether the carrying values can be recovered from
undiscounted future cash flows expected to be generated by the assets.

k.   Comprehensive Income:

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income," which established Standards
to report and display comprehensive income and its compo-nents in a full set of
general purpose financial standards.

2.   Bank Borrowings:

The Company has established a revolving and term credit facility ("Credit
Facility") with a bank in the amount of $10,000,000. The Credit Facility bears
interest at either the lender's prime lending rate or a reserve adjusted LIBOR
rate, plus between .75% and 1.5% per annum, and expires on June 30, 1999. The
Company maintains other established bank lines of credit totaling $3,650,000
which are renewed annually and bear interest at various lending rates. No
borrowings were outstanding under the above arrangements at December 31, 1998
and 1997.







                                       12
<PAGE>



3.   Accrued Expenses:

Accrued expenses consist of the following at December 31:

<TABLE>
<CAPTION>

                                     1998              1997
                                 -----------        -----------
<S>                              <C>                <C>        
Compensation                     $ 5,572,668        $ 4,292,279
Acquisition related payables       2,145,725            110,000
OTHER                              6,356,098          5,650,360
---------------------------------------------------------------
Total                            $14,074,491        $10,052,639
---------------------------------------------------------------
---------------------------------------------------------------
</TABLE>


4.   Long-Term Debt:

Long-term debt relates to the mortgage loan on the office building used by the
Company as its corporate and operations headquarters. The loan bears interest at
a fixed rate of 9.7% per annum. Principal payments due under the terms of the
mortgage with the final principal amount due May 1, 2000 are as follows:

<TABLE>
<CAPTION>
         <S>               <C>             
         In 1999..$        150,396
         In 2000..$        10,008,714
</TABLE>

5. Stockholders' Equity:

On August 31, 1998, the Company issued 42,793 shares of its common stock,
previously held in treasury, as partial consideration for its acquisition of
Product Intelligence, Inc. The shares were valued at $823,765 based on a price
of $19.25 per share.

On October 27, 1997, the Company completed a public offering of its common stock
in which 1,900,000 shares were sold by the Company, resulting in proceeds of
approximately $37,411,000. The Company incurred $517,159 of stock issuance costs
associated with the public offering.

On April 29, 1997, the Company amended its Restated Certificate of Incorporation
effecting an increase in the number of authorized shares of common stock to
15,000,000.

On April 28, 1997, the Company's Board of Directors approved a 2-for-1 stock
split in the form of a common stock dividend which was paid on May 27, 1997. All
common and per share amounts have been adjusted to give effect to the stock
split.

On October 28, 1996, the Company's Board of Directors approved a 2-for-1 stock
split in the form of a common stock dividend which was paid on December 13,
1996. The stock dividend was not paid on treasury common stock. All common share
and per share amounts, unless indicated otherwise, have been adjusted to give
effect to the stock split.

Pursuant to a self-tender offer commenced in June 1996, the Company purchased
1,677,614 shares of its common stock from its stockholders at an aggregate
purchase price of $12,162,701. The Company incurred $354,610 in related
transaction costs.

The self-tender offer was made pursuant to an Investment Agreement dated June 6,
1996 among MFI Investors L.P., MFI Associates, Inc. and the Company ("Investment
Agreement"), whereby MFI Investors L.P. purchased from the Company a ten-year,
7% convertible subordinated note in the principal amount of $8,250,000
("Convertible Note"). Immediately prior to the purchase of the shares in the
self-tender offer, the Convertible Note automatically converted at a rate of
$3.625 per share into 2,275,860 shares of the 



                                       13
<PAGE>

Company's common stock. The Company incurred $820,851 in stock issuance costs
associated with the Investment Agreement. A new class of Series B preferred
shares was issued to MFI Investors L.P., granting it the right to elect 3
directors, subject to decrease as its ownership interest decreases.

In 1996, independent of the self-tender offer, the Company purchased 60,000
shares of its common stock at a cost of $185,626.

Other transactions involving common stock consist of demand notes receivable due
from officers and employees and unearned restricted stock. Monies received by
officers and employees under the demand notes receivable were used to purchase
Company common stock. These demand notes receivable, which bear interest at
rates from 7.75% to 8.25%, are classified as a reduction of stockholders' equity
and amounted to $461,702, $493,606 and $583,996 as of December 31, 1998, 1997
and 1996, respectively. Some of the notes, which are due in ten equal annual
installments through 2004, provide for the forgiveness of every other principal
payment, contingent upon the borrower's employ- ment with the Company on the
date such payment is due. The Company recognized $7,932 of compensation expense
relating to the forgiveness of debt in 1998, 1997 and 1996. All other notes are
due in varying installments through 2001.

Unearned restricted stock amounted to $142,500, $190,000 and $237,500 as of
December 31, 1998, 1997 and 1996, respectively, and relates to a 1992 restricted
stock grant of 400,000 shares of common stock to a Company executive which vests
at a rate of 10% per year, subject to his continued employment with the Company.
The aggregate fair market value of the shares at date of grant is unearned
compensation and the amount is amortized to compensation expense over the
periods the restrictions lapse. Amortization of this compensation expense
amounted to $47,500 in 1998, 1997 and 1996.

In 1986, the stockholders approved an amendment to the Certificate of
Incorporation creating a new class of 500,000 shares of preferred stock, without
par value. In 1989, 25,000 shares were designated as Series A preferred stock;
no Series A shares have been issued to date. In 1996, 100 shares were designated
as Series B preferred stock and issued to MFI Investors L.P.

In 1989, the Board of Directors of the Company approved a stockholder rights
agreement which provides for a dividend distribution of one preferred share
purchase right for each outstanding share of common stock. Each right initially
entitled stockholders, upon occurrence of certain events, to purchase one
one-hundredth of a share of Series A preferred stock, at an exercise price of
$20 per one one-hundredth of a preferred share, subject to adjustment.

Giving effect to the December 1996 and May 1997 stock splits, each share of
common stock is entitled to purchase one four-hundredth of a Series A preferred
share at $5 per one four-hundredth of a preferred share.

The rights become exercisable ten days after a person, group or company acquires
20% or more of Company common stock or announces a tender offer which would
result in ownership of 20% or more of the common stock. The Company is entitled
to redeem the rights at one-fourth cent per right at any time before a 20% or
greater position has been acquired.

If the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, each right
will entitle its holder to purchase, at the right's then current exercise price,
a number of the acquiring company's common shares having a market value at that
time of twice the right's exercise price. In addition, in the event a person or
group acquires 20% or more of the Company's common stock, each right (other than
those held by the acquiring person or 



                                       14
<PAGE>

group) will entitle its holder to purchase a number of shares of the acquiring
company's common stock having a market value of two times the exercise price of
the right.

At any time after a person or group acquires 20% or more (but less than 50%) of
the Company's outstanding common stock, the Board of Directors may exchange the
rights at an exchange ratio of one share of common stock for one four-hundredth
of a share of Series A preferred stock per right. The rights will expire on
August 7, 1999.

Pursuant to the Investment Agreement, MFI Investors L.P. agreed not to allow its
holdings of Company voting securities to exceed 37.5% (the "Standstill
Percentage") of the Company's total voting securities outstanding at any time.
The Standstill Percentage will be reduced to 20% if at any time MFI Investors
L.P. holds less than 15% of the Company's total outstanding voting securities.
The stockholders rights agreement was amended in June 1996 to provide that the
rights would not become exercisable by reason of MFI Investors L.P. acquiring
more than 20% of the Company's voting securities, unless and until its holdings
exceed the Standstill Percentage then in effect.

6.   Employee Stock Option Plans:

Under terms of the 1982 Incentive Stock Option Plan (1982 Plan) which expired as
of May 1, 1992, options to purchase shares of the Company's common stock had
been granted at a price equal to the market price at the date of grant. Options
from the 1982 Plan were exercisable on or after the first anniversary of the
date of the grant and expired four years after the date of the grant.

Under terms of the 1996 Stock Plan (1996 Plan), the Company may issue to select
officers, directors and key employees any or all of the following: incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, non-qualified stock options, stock appreciation rights and restricted
stock. The Company has reserved 1,800,000 shares of common stock for issuance
under the 1996 Plan. Except as otherwise provided, awards are granted at a price
equal to the market price at the date of the grant, expire ten years after the
date of the grant and vest 20% per year over a five year period.

Stock option activity during the years ended December 31, 1998, 1997 and 1996
was as follows:

<TABLE>
<CAPTION>
                        1998                1997            1996
                        ----                ----            ----


                         Weighted              Weighted         Weighted
                          Average               Average          Average
                         Exercise              Exercise         Exercise
                   Shares  Price   Shares        Price   Shares   Price
                   ------  -----   -------------------   ------   -----
                                            
Outstanding at                              
   beginning                                
<S>               <C>     <C>      <C>         <C>       <C>       <C>  
   of year         771,500 $ 5.82  664,000     $  4.40   328,000   $1.27
Granted            158,750  19.26  132,500       12.68   664,000    4.40
Exercised         (64,000)   4.76  (9,000)        4.40  (308,000)   1.25
Canceled           (1,500)  17.00 (16,000)        4.41   (20,000)   1.53
                   -------        --------               -------
                   -------        --------               -------
                                            
Outstanding at                              
   end of year     864,750 $ 8.35  771,500     $  5.82   664,000   $4.40
                   -------        --------               -------
                   -------        --------               -------
                                       

Options
   exercisable
   at year-end     212,700         120,600                  --
                   -------        --------               -------
                   -------        --------               -------
Weighted average
   fair value of
   options granted
   during the year   $8.47           $4.98                 $1.72
                   -------        --------               -------
                   -------        --------               -------
</TABLE>


                                       15
<PAGE>


The following table summarizes information about stock options outstanding at
December 31, 1998:

<TABLE>
<CAPTION>
                  Options Outstanding         Options Exercisable
            -------------------------------------------------------
              Number     Weighted-Average      Number   Weighted-
                       ----------------------
 Range of   Outstanding Remaining            Exercisable Average
 Exercise       at     Contractual Exercise      at     Exercise
  Prices     12/31/98     Life      Price     12/31/98    Price
-------------------------------------------------------------------

<S>          <C>       <C>         <C>       <C>        <C>   
$ 4.40- 4.42  577,800    7.8 years $  4.40    189,000     $ 4.40
$10.69-12.88  129,200    8.4         12.65     23,600      12.64
$15.94-19.58  111,750    9.1         17.59        100      19.58
$21.48-25.13   46,000    9.6         23.39       --         --
               ------                            --
              864,750    8.1       $  8.35    212,700     $ 5.32
              -------                         -------
              -------                         -------
</TABLE>


The Company applies APB Opinion No. 25 and related Interpretations in accounting
for the 1996 Plan. Accordingly, no compensation expense has been recognized. Had
compensation cost for the Company's stock-based compensation plan been
determined consistent with FASB Statement No. 123, the Company's net income and
earnings per share would have been reduced to the pro forma amounts indicated
below:


<TABLE>
<CAPTION>
                      1998            1997            1996
                  --------------  --------------  --------------
<S>               <C>             <C>             <C>       
Net Income
     As Reported  $9,009,949      $5,822,098      $4,277,656
     Pro Forma    $8,480,568      $5,437,548      $4,244,528
Basic Earnings
   Per Share
     As Reported       $1.02           $ .80           $ .57
     Pro Forma         $ .96           $ .75           $ .57
Diluted Earnings
   Per Share
     As Reported       $ .98           $ .77           $ .55
     Pro Forma         $ .92           $ .72           $ .55
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1998, 1997 and 1996, respectively: expected
volatility of 50%, 40% and 40%, risk-free interest rates of 5.4%, 6.4% and 6.3%
and expected lives of four years for all periods. The Company does not expect to
pay dividends in the future.




                                       16
<PAGE>


7.   Earnings Per Share:

Reconciliations of the numerators and denominators of the basic and diluted
earnings per share computations for the years ended December 31, 1998, 1997 and
1996 are as follows:

<TABLE>
<CAPTION>

                                            1998
                             -----------------------------------
                                                     Per Share
                               Income      Shares      Amount
                             ----------- ----------- -----------
Basic Earnings Per Share
<S>                          <C>          <C>        <C>  
  Net Income                 $9,009,949   8,870,064    $1.02
                                                     -----------
                                                     -----------
Effect of Dilutive
Securities
  Stock Options                  --          334,666
                             ----------- -----------
                             ----------- -----------
Diluted Earnings Per Share
  Income available to
    common stockholders      
    plus assumed
conversions                  $9,009,949   9,204,730    $0.98

                             ----------- ----------- -----------
                             ----------- ----------- -----------
</TABLE>

<TABLE>
<CAPTION>

                                            1997
                             -----------------------------------
                                                     Per Share
                               Income      Shares      Amount
                             ----------- ----------- -----------
<S>                          <C>          <C>           <C> 
Basic Earnings Per Share
  Net Income                 $5,822,098   7,294,537     $.80
                                                     -----------
                                                     -----------
Effect of Dilutive
Securities
  Stock Options                  --          265,961
                             ----------- -----------
Diluted Earnings Per Share
  Income available to
    common stockholders 
    plus assumed
conversions                  $5,822,098   7,560,498     $.77

                             ----------- ----------- -----------
                             ----------- ----------- -----------
</TABLE>


<TABLE>
<CAPTION>
                                            1996
                             -----------------------------------
                                                     Per Share
                               Income      Shares      Amount
                             ----------- ----------- -----------
<S>                          <C>          <C>           <C> 
Basic Earnings Per Share
  Net Income                 $4,277,656   7,447,700     $.57
                             ----------- ----------- -----------
                             ----------- ----------- -----------
Effect of Dilutive
Securities
  Stock Options                  --           63,122
  7% Convertible
    subordinated note        ----------  ----------
                                 40,029     286,037
Diluted Earnings Per Share
  Income available to
    common stockholders     
    plus assumed
conversions                  $4,317,685   7,796,859     $.55
                             ----------- ----------- -----------
                             ----------- ----------- -----------
</TABLE>


8.   Employee Benefit Plans:

The Company maintains separate defined-contribution profit sharing plans for its
U.S. and Canadian operations which cover substantially all employees.
Contributions to the plans, subject to certain limitations, are at the
discretion of the Company and were $1,363,427, $1,163,259 and $951,192 in 1998,
1997 and 1996, respectively.

The Company also maintains an Employee Stock Ownership Plan (ESOP), which covers
substantially all U.S. employees. Under the ESOP, the Company may make
contributions at its discretion, within defined limits, in the form of cash or
common 



                                       17
<PAGE>

stock of the Company. Cash contributions must be used to purchase shares of
common stock of the Company. The Company made cash contributions of $275,000,
$200,000 and $100,000 in 1998, 1997 and 1996, respectively.

9.   Commitments and Contingent Liabilities:

The Company leases office facilities, along with some of its computer and office
equipment, under operating lease agreements. Total rental expense was
approximately $2,787,000, $1,631,000 and $1,496,000 in 1998, 1997 and 1996,
respectively. Some of the Company's leases provide for escalations based on
increases in the lessors' taxes, maintenance and other operating expenses.

Computer and office equipment include $1,993,731 and $1,141,403 in 1998 and
1997, respectively, of computer and other equipment acquired under capital
leases. Accumulated depreciation and amortization include $510,154 and $757,555
in 1998 and 1997, respectively, of accumulated amortization on capital leases.
The leases provide for the payment of certain insurance and maintenance expenses
and contain renewal options. The leases also provide for upgrading the equipment
under lease and the purchase of equipment. The amortization expense for these
capital leases was $222,403, $199,397 and $236,019 in 1998, 1997 and 1996,
respectively.


The minimum future rentals under capital and operating leases with an initial
term of one year or more as of December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                         Operating Leases
                                      -------------------------

                          Capital       Office       Equipment
Year                      Leases      Facilities    & Vehicles
----------------------------------    ------------- -----------
<S>                      <C>          <C>           <C>       
1999                     $417,492     $2,212,794    $  524,983
2000                      417,492      1,928,360       406,842
2001                      417,492      1,651,999       133,484
2002                      376,088      1,395,259        61,734
2003                      257,697      1,050,430        32,052
2004 AND THEREAFTER        79,671      1,419,662        --
---------------------------------------------------------------
Total minimum
   lease payments        $1,965,932   $9,658,504    $ 1,159,095
                                      -------------------------
                                      -------------------------

Less amounts
   representing
   interest               481,623
                       ------------

Present value
   of minimum
   lease payments       1,484,309

Current portion           295,893
                       ------------

Long-term portion        $1,188,416
----------------------------------
----------------------------------
</TABLE>


                                       18
<PAGE>


10.  Provision for Income Taxes:

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>

                          1998          1997           1996
                      -----------    -----------   -----------
<S>                   <C>            <C>           <C>        
Currently payable:
   Federal            $ 4,142,000    $ 3,073,000   $ 2,676,000
   State and local        968,000        680,000       649,000
   Foreign                228,000         41,000       157,000

Deferred:
   Federal                272,000         80,000      (181,000)
   State and local        101,000      (138,000)      (173,000)
   FOREIGN                 17,000       (23,000)       (21,000)
---------------------------------------------------------------
Total                 $ 5,728,000    $ 3,713,000   $ 3,107,000
---------------------------------------------------------------
---------------------------------------------------------------
</TABLE>

The following is a reconciliation between the statutory Federal income tax rate
and the Company's effective income tax rate:

<TABLE>
<CAPTION>

                                        1998       1997       1996
                                       
                                       
<S>                                    <C>         <C>       <C>  
Statutory Federal income tax rate      34.0%       34.0%     34.0%
                                       
State and local income taxes, net      
   of Federal income tax benefits       4.7         3.8       4.3
                                       
Tax-exempt interest income             (1.6)        (.7)        --
                                       
Foreign income taxes                     .5          .1        .6
                                       
Amortization of intangibles              .6         1.0        .2
                                       
OTHER                                    .7          .7       3.0
Effective income tax rate              38.9%       38.9%     42.1%
------------------------------------------------------------------
------------------------------------------------------------------
</TABLE>
                                  
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 1998 and
1997 are presented below:

<TABLE>
<CAPTION>

Significant deferred
   tax assets (liabilities):          1998              1997
                                      -----------------------------
<S>                                   <C>                <C>       
   Net operating loss carryforwards   $1,266,491        $ 1,324,731
   Vacation accrual                      230,267            198,708
   Rent abatement                         74,649             87,474
   Doubtful accounts                       9,851            405,385
   Other                                 168,356            329,844
   Depreciation                         (147,222)         (146,055)
   INTANGIBLES                          (137,012)            --
                                        
                                        
       Net deferred tax asset         $1,465,380        $ 2,200,087
-------------------------------------------------------------------
-------------------------------------------------------------------
</TABLE>

                                    
The Company has net operating loss carryforwards at December 31, 1998 of
approximately $4,933,000 which are available to offset certain future Federal
and state income through 2012. Utilization of approximately $2,523,000 of the
net operating loss carryforwards is limited to approximately $408,000 per year
due to the change in ownership resulting from the acquisitions of BAIGlobal,
Inc. and Strategy Research Corporation. At December 31, 1998, all deferred tax
assets are considered realizable in view of past, current and the expectation of
future taxable income.


                                       19
<PAGE>

Federal income taxes and foreign withholding taxes have not been provided on the
Company's share of the undistributed earnings of Market Facts of Canada, Ltd.
($1,680,617 at December 31, 1998) since these earnings are considered to be
permanently reinvested. The net Federal income taxes and foreign withholding
taxes which would be payable if these earnings were distributed would be
insignificant to the financial position and results of operations of the
Company.

11.  Acquisitions:

On January 1, 1998, the Company acquired the remaining 90% of the outstanding
stock of Strategy Research Corporation ("Strategy Research"). Prior to 1998, the
Company held a 10% interest in Strategy Research, a full service market research
company specializing in the Latin American and U.S. Hispanic markets. The
purchase price was an amount equal to (i) $1,192,000 in cash paid at closing,
(ii) the assumption of $150,000 of bank debt, and (iii) up to $1,950,000 of
possible contingent payments based on Strategy Research exceeding certain
earnings targets for 1998 and 1999. As of December 31, 1998, contingent payments
of $750,000 have been recorded as accrued expenses based on 1998 earnings. The
excess of the purchase price over the fair values of the assets acquired and
liabilities assumed of $2,166,012 has been recorded as goodwill and is being
amortized on a straight-line basis over 25 years.

On March 31, 1998, TRA Acquisition Corp. ("TRA"), a wholly-owned subsidiary of
the Company, acquired certain assets and assumed certain liabilities of Tandem
Research Associates, Inc. ("Tandem Research"), a 16 year-old firm providing
specialized custom and multi-client research products and services to leading
pharmaceutical companies and emerging biotech firms. The purchase price was an
amount equal to (i) $14,424,000 in cash paid at closing, (ii) the assumption of
approximately $590,000 of customer deposit liabilities, (iii) up to $9,000,000
of possible contingent payments based on TRA exceeding certain earnings targets
through March 2001, and (iv) additional contingent payments based on fifty
percent of TRA's aggregate earnings before interest and income taxes ("EBIT")
during the three-year period after the closing in excess of $9,931,000. At the
election of Tandem Research, up to twenty-five percent of the contingent
payments may be payable in shares of the Company's common stock.

The excess of the purchase price over the fair values of the assets acquired and
liabilities assumed of $15,397,167 has been recorded as goodwill and is being
amortized on a straight-line basis over 25 years.

On August 31, 1998, PI Acquisition Corp. ("PI"), a wholly-owned subsidiary of
the Company, acquired substantially all of the assets and assumed certain
liabilities of Product Intelligence, Inc. ("Product Intelligence"). Product
Intelligence operates a national network of multimedia computerized consumer
interviewing stations in 35 separate markets that provides clients with rapid
turnaround of market research requiring consumer exposure to marketing elements.
The purchase price was an amount equal to (i) $3,675,000 in net cash at closing,
(ii) 42,793 shares of Market Facts' common stock, (iii) the assumption of
approximately $438,534 of operating liabilities, (iv) up to $6,640,000 of
possible contingent payments based on PI exceeding certain earnings targets
through December 2003, and (v) additional contingent payments based on fifty
percent of PI's aggregate EBIT through December 31, 2003 in excess of
$8,600,000. As of December 31, 1998, contingent payments of $1,395,725 have been
recorded as accrued expenses based on 1998 earnings.

The excess of the purchase price over the fair values of the assets acquired and
liabilities assumed of $5,763,890 has been recorded as goodwill and is being
amortized on a straight-line basis over 25 years.

On July 31, 1997, the Company completed the acquisition of all the outstanding
stock of BAIGlobal, Inc., an international market research and information
company. The purchase price was an amount equal to (i) 



                                       20
<PAGE>

$3,700,000 in cash, (ii) the assumption of $2,250,000 in debt payable to two of
BAIGlobal's selling shareholders, and (iii) up to $5,000,000 of possible
contingent payments in the form of cash and stock based on BAIGlobal exceeding
certain earnings targets through December 1999.

The excess of the purchase price over the fair values of the assets acquired and
liabilities assumed of $4,336,360 has been recorded as goodwill and is being
amortized on a straight-line basis over 25 years.

All of the acquisitions described above were accounted for under the purchase
method of accounting and their operating results have been included in the
consolidated statements of earnings and cash flows since their respective dates
of acquisition. The remaining contingent payments for each of the above
acquisitions is considered additional purchase price and will be recorded as
goodwill at the time the Company has determined beyond a reasonable doubt that
such contingent consideration will be paid.

The following unaudited pro forma financial information is provided for 1998 and
1997 as though the Company had acquired Tandem Research and BAIGlobal at the
beginning of the year being reported on:

<TABLE>
<CAPTION>
                                           Unaudited
                                ---------------------------
                                ---------------------------
                                    1998              1997
                                ------------      ---------
                                ------------      ---------

<S>                        <C>                  <C>           
Revenue                    $   137,872,870      $  112,359,393
Net Income                 $     9,361,719      $    7,468,353
Basic Earnings Per Share   $          1.06      $         1.02
Diluted Earnings Per Share $          1.02      $          .99
</TABLE>

The pro forma financial results do not necessarily reflect actual results which
may have occurred if the acquisitions had taken place at the beginning of the
year being reported on, nor are they necessarily indicative of the results of
future combined operations. The pro forma effects of Strategy Research and
Product Intelligence are not material, and therefore, are not included.

12.  Quarterly Results of Operations (Unaudited):

The following is a summary of the unaudited quarterly results of operations for
1998 and 1997 (in thousands, except for earnings per share):

<TABLE>
<CAPTION>
1998                First      Second       Third      Fourth
--------------------------------------------------------------
<S>               <C>          <C>         <C>         <C>    
Revenue           $ 29,245     $34,166     $34,859     $38,263
Gross margin      $ 12,649     $15,095     $14,498     $17,217
Net income        $  1,391     $ 2,021     $ 2,178     $ 3,420
Basic earnings
   per share      $    .16     $   .23     $   .25     $   .38
Diluted earnings
   per share      $    .15     $   .22     $   .24     $   .37
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

1997                First      Second       Third      Fourth
--------------------------------------------------------------
<S>               <C>          <C>         <C>         <C>    
Revenue           $ 21,581     $25,253     $24,859     $28,371
Gross margin      $  9,731     $11,168     $10,555     $12,218
Net income        $    835     $ 1,081     $ 1,280     $ 2,626
Basic earnings
   per share      $    .12     $   .16     $   .18     $   .31
Diluted earnings
   per share      $    .12     $   .15     $   .18     $   .30
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>


                                       21
<PAGE>

The increase in the Company's operating results in the fourth quarter of 1998
was due largely to the impact of acquisitions made in 1998. The increase in the
fourth quarter of 1997 was due primarily to the acquisition of BAIGlobal, Inc.










                                       22