Conning Corporation Reports Strong Fourth Quarter Earnings Of $0.26 Per Share; Increases Quarterly Dividend 25 Percent.ST. LOUIS--(BUSINESS WIRE)--Jan. 21, 1999--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, 1998. 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 increased 30 percent to $0.26 compared to $0.20 per share in the fourth quarter of 1997 on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, and increased 18 percent compared to actual results of $0.22 per share for the same period in 1997. Net income rose 44 percent to $3.6 million from $2.5 million in the prior year, due to increases in all aspects of the Company's business. Revenues for the fourth quarter increased over 8 percent to $21.3 million from $19.7 million during the fourth quarter of 1997. 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 increased 39 percent to over $6.2 million from $4.5 million a year earlier. Net income plus amortization and depreciation increased 32 percent to $4.4 million for the quarter ended December 31, 1998 from $3.3 million during 1997. Leonard Leon·ard , Ray Charles Known as "Sugar Ray." Born 1956. American boxer who won the 1976 Olympic light welterweight title. He held five world titles as both a welterweight and middleweight between 1979 and 1987. Noun 1. M. Rubenstein Rubenstein may refer to:
emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Conning's diversified diversified (di·verˑ·s lines of business serving the 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. industries, and our management team's ability to remain focused in growing profitability. We are confident the progress and momentum Conning has made during its first full year as a public company will continue into the future." Year End Results Diluted earnings per share increased 29 percent to $0.93 compared to $0.72 on a pro forma basis for the year ended December 31, 1997 and increased over 16 percent compared to actual results of $0.80 per share for the same period in 1997. Net income rose 47 percent to $13.1 million from $8.9 million in the prior year, reflecting continued increases in all aspects of the Company's business. Revenues increased over 23 percent to $82.2 million from $66.6 million during 1997. Operating income for the year ended December 31, 1998 increased 49 percent to $23.0 million from $15.4 million a year earlier. Net income plus amortization and depreciation increased 33 percent to $16.5 million for the year ended December 31, 1998 from $12.4 million during 1997. 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 14 percent over the twelve-month period ended December 31, 1998 and increased almost $3.6 billion during 1998. Total assets serviced increased 13 percent over the past twelve months to $90.4 billion as of December 31, 1998, primarily resulting from continued strong growth 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 and stable growth in discretionary assets. The Company's mortgage loan and real estate division continued its steady growth during the fourth quarter and now services over $3.7 billion in mortgage loan assets, a 30 percent increase over the twelve- month period. The division's growth for the quarter reflects operating activities from the Schroder Mortgage Associates acquisition completed in August 1998. Research Services Conning's research division generated solid growth as total revenues increased over 9 percent to $16.9 million for the year ended December 31, 1998, up from $15.5 million during 1997. This revenue increase reflects continued strong growth in its core research business of 31 percent, partially offset by the recent industry declines in underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. activity. Private Equity The private equity division remained strong as revenues increased 30 percent during 1998 compared to a year ago primarily resulting from equity raising of the $225 million Conning Insurance Capital Limited Partnership V, previously announced and closed in January January: see month. 1998. Acquisitions As announced in December 1998, Conning completed the acquisition of Noddings & Associates and Noddings Investment Group (collectively "Noddings"). Noddings is a privately held Chicago-based specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. asset manager specializing in managing convertible securities portfolios and providing convertible investment strategies for large institutions and high net worth individuals. The acquisition has expanded Conning's asset management expertise, and complements its existing products and services. The transaction is expected to be accretive to earnings during the first full year of operations. Rubenstein stated, "We have put our capital resources to work during 1998, strengthening the expertise and products within our asset management group. We remain active in evaluating future acquisitions that would complement our existing business and result in shareholder value." Declaration of Increased 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. a quarterly dividend and increased the amount 25 percent to $0.05 per share on the Company's common stock, payable March 12, 1999 to shareholders of record on February February: see month. 19, 1999. This represents the fifth consecutive quarterly dividend to be paid by the Company since it completed its initial public offering in December 1997. 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 000s, except for per share data)
unaudited
Three Months Ended December 31,
1998 1997 Increase
Total revenues $ 21,291 $ 19,691 8%
Operating income 6,232 4,471 39%
Income before income taxes 6,171 4,404 40%
Net income 3,587 2,494 44%
Net income plus amortization
and depreciation 4,402 3,347 32%
Average dilutive shares 13,764 11,468
Basic earnings per share $ 0.28 $ 0.29
Diluted earnings per share $ 0.26 $ 0.22 18%
CONNING CORPORATION
(in 000s, except for per share data)
unaudited
Year Ended December 31,
1998 1997 Increase
Total revenues $ 82,232 $ 66,616 23%
Operating income 23,001 15,442 49%
Income before income taxes 22,747 15,142 50%
Net income 13,113 8,916 47%
Net income plus amortization
and depreciation 16,481 12,397 33%
Average dilutive shares 14,037 11,101
Basic earnings per share $ 1.00 $ 1.13
Diluted earnings per share $ 0.93 $ 0.80 16%
CONNING CORPORATION
Assets Serviced by the Company
(in billions)
As of As of
12/31/98 12/31/97
Assets under discretionary management:
Unaffiliated $12.4 $11.8
Affiliated 17.2 14.2
Total 29.6 26.0
Investment advisory 29.3 21.3
Investment accounting &
reporting 31.5 32.8
Total assets serviced $90.4 $80.1
Unaudited Supplementary Pro Forma Earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. Per Share Information: The following 1997 supplementary earnings per share amounts reflect adjustments to give effect to the December, 1997 stock offering and conversion of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to common shares as if both occurred at the beginning of 1997. These adjustments consist of (1) the increase of investment income, net of taxes, of $1,141,900 for the year ended December 31, 1997 and $285,600 for the three months ended December 31, 1997; and (2) the conversion of the preferred stock to common stock and issuance of new common stock and stock equivalents in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the initial public offering and using fourth quarter and year to date 1998 market prices when applying the treasury stock method in calculating diluted earnings per share.
Three Months Ended December 31,
Actual Pro Forma
1998 1997 Increase
(in 000s, except per share data)
Net income $ 3,587 $ 2,780
Average dilutive shares 13,764 13,764
Diluted earnings per share $ 0.26 $ 0.20 30%
Year ended December 31,
Actual Pro Forma
1998 1997 Increase
(in 000s, except per share data)
Net income $ 13,113 $ 10,058
Average dilutive shares 14,037 14,037
Diluted earnings per share $ 0.93 $ 0.72 29%
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Three months ended December 31,
1998 1997
(unaudited)
Revenues:
Asset management and related fees $ 16,512 $ 13,484
Research services 4,108 5,202
Other income 671 1,005
Total revenues 21,291 19,691
Expenses:
Employee compensation & benefits 9,733 10,073
Occupancy and equipment costs 1,230 1,043
Marketing and production costs 1,975 1,676
Professional services 641 845
Amortization of goodwill and other 601 721
Other operating expenses 879 862
Total expenses 15,059 15,220
Operating income 6,232 4,471
Interest expense 61 67
Income before provision for
income taxes 6,171 4,404
Provision for income taxes 2,584 1,910
Net income $ 3,587 $ 2,494
Preferred stock dividends 0 0
Net earnings available to common
shareholders $ 3,587 $ 2,494
Average diluted shares outstanding 13,764 11,468
Earnings per share:
Basic $ 0.28 $ 0.29
Diluted $ 0.26 $ 0.22
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Year ended December 31,
1998 1997
(unaudited)
Revenues:
Asset management and related fees $ 62,755 $ 49,503
Research services 16,924 15,479
Other income 2,553 1,634
Total revenues 82,232 66,616
Expenses:
Employee compensation & benefits 38,206 33,632
Occupancy and equipment costs 4,680 3,552
Marketing and production costs 7,253 5,675
Professional services 2,360 1,992
Amortization of goodwill and other 2,609 2,969
Other operating expenses 4,123 3,354
Total expenses 59,231 51,174
Operating income 23,001 15,442
Interest expense 254 300
Income before provision for
income taxes 22,747 15,142
Provision for income taxes 9,634 6,226
Net income $ 13,113 $ 8,916
Preferred stock dividends 0 963
Net earnings available to common
shareholders $ 13,113 $ 7,953
Average diluted shares outstanding 14,037 11,101
Earnings per share:
Basic $ 1.00 $ 1.13
Diluted $ 0.93 $ 0.80
CONNING CORPORATION
Consolidated Balance Sheet Information
(amounts in 000s)
December 31, December 31,
1998 1997
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $ 31,343 $ 43,085
Short-term investments 28,288 16,337
Accounts receivable, 11,165 10,784
Marketable equity securities 278 601
Income taxes receivable 0 1,356
Prepaid expenses and other
current assets 482 359
Total current assets 71,556 72,522
Non-marketable investments at value 2,737 2,350
Equipment and leasehold
improvements, net 1,452 1,525
Deferred income taxes 3,200 1,736
Goodwill 40,706 17,813
Other assets 2,827 3,911
Total assets $122,478 $ 99,857
Liabilities and Shareholders' Equity
Current liabilities:
Compensation payable 12,795 11,149
Deferred revenue 3,793 3,201
Due to affiliates 2,339 1,379
Income tax payable 284 0
Accounts payable and other
accrued expenses 19,555 6,567
Total current liabilities 38,766 22,296
Accrued rent liability 3,216 3,375
Other payables 320 480
Total liabilities 42,302 26,151
Common stock 136 133
Additional paid in capital 74,975 73,126
Retained earnings 11,462 447
Treasury stock (6,397) 0
Total common shareholders' equity 80,176 73,706
Total liabilities and
shareholders' equity $122,478 $ 99,857
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