Conning Corporation Reports Strong Third Quarter Earnings Of $0.25 Per Share; Declares Fourth Consecutive Dividend.ST. LOUIS--(BUSINESS WIRE)--October 22, 1998--Conning Corporation (Nasdaq:CNNG) today reported financial and operating results for the third quarter and nine months ended September September: see month. 30, 1998. Conning provides asset management services to insurance companies, 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. Third-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 32 percent to $0.25 compared to $0.19 per share in the third 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 19 percent compared to actual results of $0.21 per share for the same period in 1997. Net income rose 50 percent to $3.5 million from $2.3 million in the prior year, due to increases in all aspects of the Company's business. Revenues for the third quarter increased over 29 percent to $20.7 million from $16.0 million during the third 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 70 percent to $6.1 million from $3.6 million a year earlier. Net income plus amortization and depreciation increased 34 percent to $4.3 million for the three-month period ended September 30, 1998 from $3.2 million in the same period 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:
Please [ improve this article] or discuss the issue on the talk page. industry." Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results Diluted earnings per share increased 29 percent to $0.67 compared to $0.52 on a pro forma basis for the nine months ended September 30, 1997 and increased 16 percent compared to actual results of $0.58 per share for the same period in 1997. Net income rose 48 percent to $9.5 million from $6.4 million in the prior year, due to continued increases in all aspects of the Company's business. Revenues increased 30 percent to $60.9 million from $46.9 million during the first nine months of 1997. Operating income for the nine-month period increased 53 percent to $16.8 million from $11.0 million a year earlier. Net income plus amortization and depreciation increased 33 percent to $12.1 million for the nine-month period ended September 30, 1998, from $9.1 million in the same period 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 by 15 percent over the twelve-month period ended September 30, 1998, and have grown almost $2.8 billion during 1998. Total assets serviced increased 21 percent over the past twelve months to $88.8 billion as of September 30, 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 third quarter and now services over $3.6 billion in mortgage loan assets, a 29 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 enjoyed substantial growth as total revenues increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 13 percent to $4.3 million for the third quarter, up from $3.8 million during the same period in 1997. This revenue increase reflects continued strong growth in its core research business despite the recent declines in the 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. markets. Private Equity The private equity division remained strong as revenues increased 69 percent during the third quarter 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. Acquisition of Noddings As announced earlier this month, Conning entered into a definitive agreement to acquire 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 will expand Conning's asset management products and services and complement its existing mortgage loan capabilities. The initial purchase price will include a cash payment of approximately $4.5 million, including acquisition expenses. The transaction is expected to close during the fourth quarter of 1998 and to be accretive to earnings during the first full year of operations. Rubenstein stated, "We are committed to putting our capital resources to work that will strengthen the expertise and products within our asset management group which should result in enhancing value to our shareholders." 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. a regular quarterly dividend of $0.04 per share on the Company's common stock, payable December December: see month. 4, 1998, to shareholders of record on November November: see month. 13, 1998. This represents the fourth 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. -0-
CONNING CORPORATION
(in 000s, except for per share data)
unaudited
Three Months Ended September 30,
1998 1997 Increase
Total revenues $ 20,703 $ 16,003 29%
Operating income 6,118 3,591 70%
Income before income taxes 6,055 3,522 72%
Net income 3,497 2,325 50%
Net income plus amortization
and depreciation 4,273 3,192 34%
Average dilutive shares 13,913 11,087
Basic earnings per share $ 0.27 $ 0.30
Diluted earnings per share $ 0.25 $ 0.21 19%
CONNING CORPORATION
(in 000s, except for per share data)
unaudited
Nine Months Ended September 30,
1998 1997 Increase
Total revenues $ 60,941 $ 46,925 30%
Operating income 16,769 10,972 53%
Income before income taxes 16,576 10,739 54%
Net income 9,526 6,422 48%
Net income plus amortization
and depreciation 12,080 9,050 33%
Average dilutive shares 14,125 11,094
Basic earnings per share $ 0.72 $ 0.83
Diluted earnings per share $ 0.67 $ 0.58 16%
CONNING CORPORATION
Assets Serviced by the Company
(in billions)
As of As of As of
9/30/98 12/31/97 9/30/97
Assets under discretionary Management:
Unaffiliated $12.3 $11.8 $11.6
Affiliated 16.5 14.2 13.5
Total 28.8 26.0 25.1
Investment advisory 29.1 21.3 21.0
Investment accounting &
reporting 30.9 32.8 27.5
Total assets serviced $88.8 $80.1 $73.6
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 $856,900 for the nine months ended September 30, 1997 and $285,000 for the three months ended September 30, 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 third quarter and year to date 1998 market prices when applying the treasury stock method in calculating diluted earnings per share. -0-
Three Months Ended September 30,
Actual Pro Forma
1998 1997 Increase
(in 000s, except per share data)
Net income $ 3,497 $ 2,610
Average dilutive shares 13,913 13,913
Diluted earnings per share $ 0.25 $ 0.19 32%
Nine Months Ended September 30,
Actual Pro Forma
1998 1997 Increase
(in 000s, except per share data)
Net income $ 9,526 $ 7,279
Average dilutive shares 14,125 14,125
Diluted earnings per share $ 0.67 $ 0.52 29%
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Three months ended September 30,
1998 1997
(unaudited)
Revenues:
Asset management and related fees $ 16,208 $ 11,940
Research services 4,310 3,812
Other income 185 251
Total revenues 20,703 16,003
Expenses:
Employee compensation & benefits 9,296 8,304
Occupancy and equipment costs 1,184 879
Marketing and production costs 1,908 1,274
Professional services 578 461
Amortization of goodwill and other 593 733
Other operating expenses 1,026 761
Total expenses 14,585 12,412
Operating income 6,118 3,591
Interest expense 63 69
Income before provision for
income taxes 6,055 3,522
Provision for income taxes 2,558 1,197
Net income $ 3,497 $ 2,325
Preferred stock dividends 0 248
Net earnings available to common
shareholders $ 3,497 $ 2,077
Average diluted shares outstanding 13,913 11,087
Earnings per share:
Basic $ 0.27 $ 0.30
Diluted $ 0.25 $ 0.21
CONNING CORPORATION
Consolidated Statements of Income
(in 000s, except per share data)
Nine months ended September 30,
1998 1997
(unaudited)
Revenues:
Asset management and related fees $ 46,242 $ 36,018
Research services 12,817 10,278
Other income 1,882 629
Total revenues 60,941 46,925
Expenses:
Employee compensation & benefits 28,473 23,559
Occupancy and equipment costs 3,450 2,509
Marketing and production costs 5,277 3,999
Professional services 1,719 1,147
Amortization of goodwill and other 2,008 2,248
Other operating expenses 3,245 2,491
Total expenses 44,172 35,953
Operating income 16,769 10,972
Interest expense 193 233
Income before provision for
income taxes 16,576 10,739
Provision for income taxes 7,050 4,317
Net income $ 9,526 $ 6,422
Preferred stock dividends 0 750
Net earnings available to common
shareholders $ 9,526 $ 5,672
Average diluted shares outstanding 14,125 11,094
Earnings per share:
Basic $ 0.72 $ 0.83
Diluted $ 0.67 $ 0.58
CONNING CORPORATION
Consolidated Balance Sheet Information
(amounts in 000s)
September 30, December 31,
1998 1997
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $ 30,288 43,085
Short-term investments 23,092 16,337
Accounts receivable, 9,246 10,784
Marketable equity securities 251 601
Income taxes receivable 0 1,356
Prepaid expenses and other
current assets 507 359
Total current assets 63,384 72,522
Non-marketable investments at value 3,927 2,350
Equipment and leasehold
improvements, less accumulated
amortization 1,416 1,525
Deferred income taxes 3,226 1,736
Goodwill 37,922 17,813
Other assets 2,735 3,911
Total assets $112,610 $ 99,857
Liabilities and Shareholders' Equity
Current liabilities:
Compensation payable 9,616 11,149
Deferred revenue 3,412 3,201
Due to affiliates 4,151 1,379
Income tax payable 1,661 0
Accounts payable and other
accrued expenses 14,951 6,567
Total current liabilities 33,791 22,296
Accrued rent liability 3,170 3,375
Other payables 360 480
Total liabilities 37,321 26,151
Common stock 133 133
Additional paid in capital 73,158 73,126
Retained earnings 8,395 447
Treasury stock (6,397) 0
Total common shareholders' equity 75,289 73,706
Total liabilities and
shareholders' equity $112,610 $ 99,857
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