Conning Corporation Reports Fourth Quarter Earnings of $0.22 Per Share and Full Year Results.Business Editors ST. LOUIS--(BUSINESS WIRE)--Jan. 20, 2000 Conning Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CNNG) today reported financial and operating results for the fourth quarter and full year ended December December: see month. 31, 1999. Conning provides asset management services primarily to insurance companies and pension funds, manages private equity funds investing in insurance and insurance-related companies, and conducts in-depth in-depth adj. Detailed; thorough: an in-depth study. in-depth Adjective detailed or thorough: an in-depth analysis research on the insurance industry. Fourth - Quarter Results 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 decreased 15 percent to $0.22 compared to $0.26 per share in the fourth quarter of 1998. Net income decreased 15 percent to $3.1 million from $3.6 million from the same period in the prior year. Revenues for the fourth quarter increased over 5 percent to $22.4 million from $21.3 million during the fourth quarter of 1998. 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. for the quarter decreased 18 percent to $5.1 million from $6.2 million a year earlier. Net income plus amortization and depreciation decreased 11 percent to $3.9 million for the quarter ended December 31, 1999 from $4.4 million during 1998. Full Year to Date Results Diluted earnings per share increased 6 percent to $0.99, excluding a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.0 million, compared to $0.93 per share in 1998. The non-recurring charges were for professional and out-of-pocket expenses out-of-pocket expenses n. moneys paid directly for necessary items by a contractor, trustee, executor, administrator or any person responsible to cover expenses not detailed by agreement. incurred in the third quarter from the announcement by Metropolitan Life Insurance Company acquiring GenAmerica Corporation (GenAmerica), the Company's majority shareholder. Earnings per share after accounting for the non-recurring charge were $0.95 for the year ended December 31, 1999, representing a 2 percent increase. Net income rose approximately 2 percent to $13.3 million from $13.1 million in the prior year, reflecting continued increases in the majority of the Company's operations. Revenues increased approximately 11 percent to $90.9 million from $82.2 million during 1998. Operating income for the year decreased 2 percent to $22.5 million from $23.0 million a year earlier. Net income plus amortization and depreciation increased 1 percent to $16.7 million for the year ended December 31, 1999 from $16.5 million during 1998. Assets Under Management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. Assets under discretionary management grew approximately 13 percent over the twelve-month period ended December 31, 1999 and increased almost $3.7 billion during the same period. Total assets serviced decreased 19 percent over the past twelve months to $73.1 billion as of December 31, 1999, resulting from losses in assets under advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . Total asset management and related revenues associated with the total assets serviced increased 19 percent for the year, compared to the same period a year earlier due to growth from existing clients and through acquisition, as well as additional products and services sold to our client base. Asset Management The asset management group continued to experience strong growth, increasing revenues 21 percent from the fourth quarter 1998 to $11.9 million and almost 22 percent for the year ended December 31, 1999, to $49.0 million. Core investment management revenues from the Company's insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. clients increased over 26 percent for the year ended December 31, 1999, compared to the same period a year ago. The private equity division remained solid during 1999, increasing revenues approximately 3 percent compared to a year ago. Fund VI, the private equity operation's newest fund, remains on track to be a 2000 revenue generating event. Mortgage Loan and Real Estate The Company's mortgage loan and real estate group posted steady revenues of $6.6 million during the fourth quarter, similar to the same period a year ago. Conning now services over $4.3 billion in mortgage loan assets, a 16 percent increase over the twelve-month period. The mortgage operations continued to have strong growth this year, increasing revenues 14 percent to $25.6 million compared to $22.4 million for the year ended December 31, 1998. Research Services Conning's research group generated total revenues of $14.8 million for the year compared to $16.9 million for the same period a year ago. Core research revenues declined 5 percent for the year ended December 31, 1999 compared to the same period a year ago due in part to market volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , particularly in the financial services sector and non-recurring revenue impacts resulting from GenAmerica announcements in the third quarter. Declaration of Quarterly Cash Dividend Conning's board of directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. its regular quarterly dividend of $0.05 per share on the Company's common stock, payable March 11, 2000 to shareholders of record on February February: see month. 18, 2000. This represents the ninth consecutive quarterly dividend to be paid by the Company since it completed its initial public offering in December 1997. Recent Announcements On Tuesday Tuesday: see week. , the company reported that Metropolitan Life Insurance Company (MetLife) proposed to acquire all of the outstanding shares of common stock not already controlled by MetLife for $10.50 per share in cash. MetLife recently acquired a beneficial ownership of approximately 61 percent of Conning as a result of MetLife's January January: see month. 6, 2000 acquisition of GenAmerica Corporation, Conning's indirect majority owner. MetLife included in its announcement its intention to assume the asset management of the General American Gen·er·al American n. The speech of native speakers of American English that many consider to be typical of the United States, noted for its exclusion of phonological forms readily recognized as regional or limited to particular social groups and for Life Insurance Company general account assets currently managed by Conning. The company has received MetLife's proposal and the Conning Board of Directors is evaluating the proposed transaction. This press release shall not be deemed to constitute a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual or recommendation with respect to the MetLife proposal and no such solicitation or recommendation will be made except in compliance with applicable securities laws. The preceding discussions of expected future results may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Actual results could differ from expected results due to various factors, including whether final costs exceed estimates and other factors discussed in company filings with the Securities and Exchange Commission.
CONNING CORPORATION
(in 000's, except for per share data)
unaudited
Three Months Ended December 31,
1999 1998 Change
Total revenues $ 22,409 $ 21,291 5%
Operating income 5,091 6,232 (18)%
Income before income taxes 5,037 6,171 (18)%
Net income 3,065 3,587 (15)%
Net income plus amortization
and depreciation 3,916 4,402 (11)%
Average dilutive shares 13,863 13,764
Basic earnings per share $ 0.23 $ 0.28
Diluted earnings per share $ 0.22 $ 0.26 (15)%
CONNING CORPORATION
(in 000's, except for per share data)
unaudited
Year Ended December 31,
1999 1998 Change
Total revenues $ 90,895 $ 82,232 11%
Operating income 22,469 23,001 (2)%
Income before income taxes 22,241 22,747 (2)%
Net income 13,319 13,113 2%
Net income plus amortization
and depreciation 16,656 16,481 1%
Average dilutive shares 13,968 14,037
Basic earnings per share $ 0.99 $ 1.00
Diluted earnings per share $ 0.95 $ 0.93 2%
CONNING CORPORATION
Assets Serviced by the Company
(in billions)
As of As of
12/31/99 12/31/98
Assets under discretionary management:
Unaffiliated $ 21.7 $ 12.4
Affiliated 11.6 17.2
Total 33.3 29.6
Investment advisory 6.5 29.3
Investment accounting &reporting 33.3 31.5
Total assets serviced $ 73.1 $ 90.4
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Three months ended December 31,
1999 1998
(unaudited)
Revenues:
Asset management and related fees $ 18,517 $ 16,512
Research services 3,469 4,108
Other income 423 671
Total revenues 22,409 21,291
Expenses:
Employee compensation &benefits 11,646 9,733
Occupancy and equipment costs 1,739 1,230
Marketing and productions costs 1,645 1,975
Professional services 677 641
Amortization of goodwill and other 694 601
Other operating expenses 917 879
Total expenses 17,318 15,059
Operating Income 5,091 6,232
Interest expense 54 61
Income before provision for
income taxes 5,037 6,171
Provision for income taxes 1,972 2,584
Net income $ 3,065 $ 3,587
Net earnings available to common
Shareholders $ 3,065 $ 3,587
Average diluted shares outstanding $ 13,863 13,764
Earnings per share:
Basic $ 0.23 $ 0.28
Diluted $ 0.22 $ 0.26
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Year ended
December 31,
1999 1998
(unaudited)
Revenues:
Asset management and related fees $ 74,519 $ 62,755
Research services 14,788 16,924
Other income 1,588 2,553
Total revenues 90,895 82,232
Expenses:
Employee compensation &benefits 43,619 38,206
Occupancy and equipment costs 6,471 4,680
Marketing and productions costs 7,059 7,253
Professional servcies 3,887 2,360
Amortization of goodwill and other 2,677 2,609
Other operating expenses 4,713 4,123
Total expenses 68,426 59,231
Operating Income 22,469 23,001
Interest expense 228 254
Income before provision for income
taxes 22,241 22,747
Provision for income taxes 8,922 9,634
Net income $ 13,319 $ 13,113
Net earnings available to common
Shareholders $ 13,319 $ 13,113
Average diluted shares outstanding 13,968 14,037
Earnings per share:
Basic $ 0.99 $ 1.00
Diluted $ 0.95 $ 0.93
CONNING CORPORATION
Consolidated Balance Sheet Information
(amounts in 000s)
December 31, December 31,
1999 1998
(unaudited)
Assets:
Current Assets:
Cash, cash equivalents and
short-term investments $ 87,480 $ 59,631
Accounts receivable 13,950 11,165
Other current assets 585 760
Total current assets 102,015 71,556
Non-marketable investments at
value 6,084 2,737
Goodwill 42,688 40,706
Other assets 15,394 7,479
Total assets $ 166,181 $ 122,478
Liabilities and Shareholders' Equity
Current liabilities:
Compensation payable $ 11,870 $ 12,795
Other current liabilities 55,595 25,971
Total current liabilities 67,465 38,766
Other payables 3,053 3,536
Total liabilities 70,518 42,302
Common stock 141 136
Additional paid in capital 79,844 74,975
Retained earnings 22,075 11,462
Treasury stock (6,397) (6,397)
Total common shareholders'
equity 95,663 80,176
Total liabilities and
shareholders' equity $ 166,181 $ 122,478
SOURCE: Conning Corporation
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