ACNielsen More Than Doubles Operating Income, Net Income and Earnings Per Share in 1997; 40% Increase in Fourth-Quarter Net Income Caps Year of Continuous Improvement.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--February 19, 1998--ACNielsen Corporation (NYSE NYSE See: New York Stock Exchange : ART) said today that it more than doubled its operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , net income and earnings per share in 1997. The company reported full-year net income of $35.9 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.62, both more than double prior-year levels. Operating income also more than doubled, to $60.8 million, while the company's operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 4.4% from 2.1%, both after a negative foreign currency translation impact of almost $11 million. Operating income and operating margin figures are prior to a special charge in the 1997 fourth quarter. Full-year revenue rose 8.5% in local currency. On a reported basis, revenue increased 2.4%, to $1,391.6 million, after translating foreign currencies to the stronger U.S. dollar. "In 1997, our first full year as an independent company, ACNielsen ACNielsen is a global marketing research firm, based in Schaumburg, Illinois. This company was founded in 1923 in Chicago, Illinois, by Arthur C. Nielsen, Sr., in order to give marketers reliable and objective information on the impact of marketing and sales programs. delivered," said Nicholas Nicholas, Russian grand duke Nicholas (Nikolai Nikolayevich) (nyĭkəlī` nyĭkəlī`əvĭch), 1856–1929, Russian grand duke and army officer; first cousin of Czar Alexander III and grandson of Czar L. Trivisonno, chairman and chief executive officer. "We surpassed each of our operating targets, and we did so despite a substantial negative impact from foreign currency translation. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in particularly pleased with the progress we continue to make in each of our regions," Trivisonno said. "Led by our U.S. business, the Americas A·mer·i·cas , the See America. achieved strong revenue growth and substantially higher profits. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East & Africa delivered
higher revenue and income in local currency, and made excellent progress
on its turnaround TurnaroundA situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . Asia Pacific produced strong profit growth, benefiting from a continued focus on client service, a more disciplined approach to customized consumer research, and productivity improvements. "Given our strong quarter-over-quarter momentum in 1997, and our solid prospects at the start of this year," Trivisonno said, "I am confident that we will continue to deliver strong operating and net income growth in 1998." Fourth-Quarter Results Net income in the fourth quarter reached $16 million, up 40% over the prior year, while diluted earnings per share climbed 35%, to $0.27 per share. Each of ACNielsen's operating regions contributed to the overall increase. During the fourth quarter of 1997, ACNielsen recorded a special, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $36 million, primarily to accelerate the return to profitability of its business in Japan. The charge was offset by a non-operating, pre-tax gain of $39 million from the sale of non-strategic investments in two companies -- Manugistics Manugistics is a software application for resource planning and supply chain management, used by corporations in North America, the UK, and Ireland. Manugistics is also the name of the company that develops and markets this and other applications. Group, Inc. and GeoQuest International Holdings, Inc. On an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , the net impact of the charge and gain was neutral. Excluding the fourth-quarter charge, operating income was $28.2 million, up 36% over the prior year, even after absorbing a $5.4 million negative impact from foreign currency translation. Local currency revenue advanced 7.5%, but reported revenue, at $363.6 million, was slightly lower than the prior year due to the impact of a strong U.S. dollar on Europe and Asia results. The following discussion of ACNielsen's regional performance refers to full-year operating results, compared with the prior year. References to operating income exclude the impact of a special charge of $36 million in the 1997 fourth quarter. Americas Region Full-year revenue advanced 10.5% in local currency. After translation to the U.S. dollar, reported revenue was $514.0 million, up 8.9%. The region's operating income rose 149.9%, to $43.3 million. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , revenue rose 8.2%, to $310.0 million, reflecting continued strong growth in account-level information and consumer panel services. Operating income reached $19.5 million, a $24.4 million improvement over 1996. The increase was due to higher revenue coupled with lower costs and significant productivity gains. Combined revenue for Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. was $204.0 million, up 10.0%, driven by increased sales of retail measurement and consumer panel services in Canada, and strong retail measurement growth in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Colombia Colombia (kəlŭm`bēə, Span. kōlōm`byä), officially Republic of Colombia, republic (2005 est. pop. 42,954,000), 439,735 sq mi (1,138,914 sq km), NW South America. Bogotá is the capital and largest city. . Operating income rose 6.8%, to $23.8 million, despite a negative $1.7 million impact from foreign currency translation. Europe, Middle East and Africa Region Revenue advanced 6.6% in local currency, reflecting nearly 40% growth in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , the addition of new revenue from Turkey, Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , and growth in substantially all countries in the region. Reported revenue of $579.0 million, however, was slightly below 1996 levels due to the impact of the strong U.S. dollar. Operating income rose 33.9% in local currency, but reported income, at $21.2 million, was essentially flat, after absorbing an $8 million negative impact from currency translation. The increase in local-currency operating income was driven by strong income growth in Eastern Europe, overall cost reductions and improved results in the U.K. and France. Asia Pacific Region Local-currency revenue increased 9.4%, reflecting strong demand for ACNielsen's market research services, particularly in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and Korea, and from growth in the region's multi-country business. Reported revenue, including a negative $13.3 million foreign exchange impact, was $264.7 million, up 4.2%. Operating income climbed 45.5%, to $6.9 million, including a negative impact of $2.2 million from currency translation. The substantial increase reflects the region's continued focus on client service, operating efficiency and profitability. Significant progress was made in China and Taiwan, in particular. Japan Revenue, in local currency, rose 7.6%, on increased sales of retail measurement services. Reported revenue declined 2.8%, to $33.9 million, due to the impact of a strong U.S. dollar against the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. . Japan's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was reduced 32.6%, to $10.6 million, due to higher volume, improved operating efficiency and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of currency translation on costs. ACNielsen, offering services in over 90 countries and with 1997 revenues of $1.4 billion, is the global leader in delivering market research, information and analysis to the consumer products and service industries. Note to Editors: Look for this earnings release and other ACNielsen news on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://acnielsen.com. -0-
ACNielsen Corporation
Condensed Statements of Earnings
(in millions, except per share amounts)
For the Years Ended December 31,
1997 (1) 1996
Operating Revenue $1,391.6 $1,358.6
Operating Costs 749.4 746.6
Selling & Administrative
Expenses 488.6 490.7
Depreciation & Amortization 92.8 93.1
Special Charge 36.0 -
Operating Income 24.8 28.2
Gain on Sale of Investments 39.0 -
Other Income, Net 4.7 2.3
Income Before Income Tax
Provision 68.5 30.5
Income Tax Provision (32.6) (14.7)
Net Income $ 35.9 $ 15.8
Earnings Per Share of
Common Stock (2)
Basic $ 0.63 $ 0.28
Diluted $ 0.62 $ 0.28
Average Number of
Shares Outstanding (2)
Basic 57.1 56.7
Diluted 58.4 57.0
(1) Includes a special charge of $36.0 million pre-tax ($28.2 million
after-tax) or $0.49 per share - Basic, $0.48 per share - Diluted
and a non-operating gain on sale of investments in Manugistics
Group, Inc. and GeoQuest International Holdings, Inc. of $39.0
million pre-tax ($28.2 million after-tax) or $0.49 per share -
Basic, $0.48 per share - Diluted.
(2) For the periods prior to November 1, 1996, the computation is
based on the average number of shares of D&B Common Stock and
Common Stock equivalents outstanding, adjusted for the one for
three distribution ratio.
-0-
ACNielsen Corporation
Condensed Statements of Earnings
(in millions, except per share amounts)
For the Quarters Ended December 31,
1997 (1) 1996
Operating Revenue $ 363.6 $ 367.7
Operating Costs 185.6 202.7
Selling & Administrative
Expenses 127.6 121.8
Depreciation & Amortization 22.2 22.5
Special Charge 36.0 -
Operating Income (Loss) (7.8) 20.7
Gain on Sale of Investments 39.0 -
Other Income, Net 1.1 1.3
Income Before Income Tax
Provision 32.3 22.0
Income Tax Provision (16.3) (10.6)
Net Income $ 16.0 $ 11.4
Earnings Per Share of
Common Stock (2)
Basic $ 0.28 $ 0.20
Diluted $ 0.27 $ 0.20
Average Number of
Shares Outstanding (2)
Basic 57.4 56.8
Diluted 59.3 57.0
(1) Includes a special charge of $36.0 million pre-tax ($28.2 million
after-tax) or $0.49 per share - Basic, $0.48 per share - Diluted
and a non-operating gain on sale of investments in Manugistics
Group, Inc. and GeoQuest International Holdings, Inc. of $39.0
million pre-tax ($28.2 million after-tax) or $0.49 per share -
Basic, $0.48 per share - Diluted.
2) For the periods prior to November 1, 1996, the computation is
based on the average number of shares of D&B Common Stock and
Common Stock equivalents outstanding, adjusted for the one for
three distribution ratio.
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ACNielsen Corporation
Results by Geographic Region
(in millions)
For the Years Ended December 31,
Revenues Operating Income (Loss)
1997 1996 1997(1) 1996
United States $ 310.0 $ 286.5 $ 19.5 $ (4.9)
Canada/Latin America 204.0 185.5 23.8 22.2
Total Americas 514.0 472.0 43.3 17.3
Europe, Middle East
& Africa 579.0 597.7 21.2 21.8
Asia Pacific 264.7 254.1 6.9 4.8
ACN Japan 33.9 34.8 (10.6) (15.7)
Total $1,391.6 $1,358.6 $ 60.8 $ 28.2
For the Quarters Ended December 31,
Revenues Operating Income (Loss)
1997 1996 1997(1) 1996
United States $ 80.2 $ 77.0 $ 6.5 $ 4.8
Canada/Latin America 52.3 52.2 7.0 5.0
Total Americas 132.5 129.2 13.5 9.8
Europe, Middle East
& Africa 156.5 160.9 14.6 13.9
Asia Pacific 65.9 68.4 2.8 0.3
ACN Japan 8.7 9.2 (2.7) (3.3)
Total $ 363.6 $367.7 $ 28.2 $ 20.7
(1) 1997 Operating Income excludes a special fourth-quarter charge
of $36.0 million ($2.2 million in Canada/Latin America; $4.0
million in Europe, Middle East and Africa; $7.5 million in Asia
Pacific and $22.3 million in Japan).
-0-
ACNielsen Corporation
Condensed Consolidated Balance Sheets
(in millions)
December 31, December 31,
1997 1996
Assets
Current Assets
Cash and Cash Equivalents $ 205.7 $ 185.0
Accounts Receivable - Net 260.8 270.6
Other Current Assets 39.8 30.8
Total Current Assets 506.3 486.4
Marketable Securities and
Other Investments 10.3 26.4
Property, Plant &
Equipment - Net 165.7 186.1
Other Assets - Net 358.2 337.2
TOTAL ASSETS $1,040.5 $1,036.1
Liabilities and Shareholders'
Equity
Current Liabilities
Short-term Debt $ 26.0 $ 36.8
Other Current Liabilities 444.5 409.5
Total Current Liabilities 470.5 446.3
Long-Term Liabilities 109.9 135.8
TOTAL LIABILITIES 580.4 582.1
Commitments and Contingencies
Shareholders' Equity 460.1 454.0
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,040.5 $1,036.1
CONTACT: Media Contacts: Investor Contact: Barry Holt holt n. Archaic A wood or grove; a copse. [Middle English, from Old English.] holt Noun the lair of an otter [from Darial Sneed (203) 961-3340 (203) 961-3345 or Will Thoretz (203) 961-3337 |
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