Printer Friendly

FCB REPORTS 1991 RESULTS

 FCB REPORTS 1991 RESULTS
 CHICAGO, Feb. 13 /PRNewswire/ -- Foote, Cone and Belding


Communications, Inc. (NYSE: FCB) today reported that the charges associated with the previously announced restructuring have, as anticipated, significantly impacted 1991 earnings, resulting in a net loss per share of $2.74 and $1.81 for the fourth quarter and full-year 1991, respectively.
 Excluding the effect of the restructuring charges, earnings per share were $.63 for the quarter and $1.60 for the full-year. Consolidated revenues were $341,987,000 for the year, up $3.8 million or 1.1 percent.
 YEAR ENDED DEC. 31, 1991
 Net results for the year ended Dec. 31, 1991, were a loss of $19,148,000, compared to income of $21,624,000 in 1990. As previously announced, the company recorded a charge during the 1991 fourth quarter to restructure operations and recognize anticipated losses to sublet excess office space. These charges, included in unusual items, totaled $42,385,000 before tax and $35,981,000 or $3.41 per share after related tax benefits. Also included in unusual charges for 1991 was a pre-tax gain of $791,000 related to the sale of the company's financial advertising subsidiary, Albert Frank-Guenther Law.
 Approximately $28,765,000 of the restructuring charges related to the company's Los Angeles-based direct marketing operation. Of this total, $15937,000 was due to the write-off of goodwill. The remaining expense related to direct marketing was primarily to establish reserves for lease exposures and to recognize severance costs incurred.
 In addition, a charge of approximately $13,620,000 related to lease reserves for excess space created by premature terminations of sublease agreements and adjustments to deferred compensation accruals.
 Excluding the effects of the restructuring charge, net income declined to $16,833,000 or $1.60 per share from $21,624,000 or $2.10 per share in 1990.
 Pro forma combined revenues (including FCB's proportionate share of European revenues) increased to $586,832,000 in 1991, compared to $338,138,000 in 1990. Excluding the effects of currency and acquisitions, consolidated revenues would have been flat and revenues on a combined basis would have increased approximately 4 percent.
 Consolidated operating expenses increased by 4.1 percent to $321,377,000. Operating margins declined from $29,344,000 in 1990 to $20,610,000 in 1991. Approximately half of the decline in operating margin was due to the Los Angeles-based direct marketing operation restructured during the year. Also, office and general expenses increased and operating margins declined as a result of increased provisions for uncollectible accounts receivable.
 Other expenses improved from $6,282,000 in 1990 to $4,726,000 as net interest expense declined.
 Equity income, which consists primarily of FCB's share of European operations, declined from $10,298,000 in 1990 to $9,201,000 in 1991. European operations were adversely affected by recessionary conditions particularly in France and the United Kingdom. Additionally, during the 1991 period, severance costs were incurred to rationalize operations in the Netherlands and the United Kingdom following acquisitions in those countries.
 QUARTER ENDED DEC. 31, 1991
 Including the restructuring charges, the fourth quarter of 1991 showed a net loss of $29,244,000 or $2.74 per share. Net income before restructuring charges was $6,737,000 or $0.63 per share, compared to $9,712,000 or $0.94 per share in 1990.
 Pro forma combined revenues (including Europe) increased to $185,284,000 in 1991 from $169,947,000 in 1990. Consolidated revenues (excluding Europe) totaled $94,854,000 in 1991, virtually unchanged from $94,910,000 in 1990. Excluding the effects of currency and acquisitions, pro forma combined revenues would have increased approximately 4 percent.
 Operating margins declined from $12,703,000 to $7,028,000. The restructured direct marketing operations and increased provisions for uncollectible accounts also negatively affected the quarterly results.
 SUMMARY
 Bruce Mason, FCB chairman and CEO, commenting on the 1991 results said, "The charges for restructuring and increased lease reserves were a significant accounting event. However, as previously noted, these actions were primarily to address areas that had been negatively impacting earnings. These charges do not require incremental cash commitments or reduce cash flow." Mason continued, "With our costs now under careful control, we expect to achieve significantly improved financial performance during 1992 despite the continuing recession."
 Foote, Cone and Belding ranks as the seventh largest worldwide advertising company and the third largest agency in the United States. Its network includes 176 offices in 40 countries, with 1991 worldwide billings, including Publicis-FCB European operations, totaling more than $5 billion.
 FOOTE, CONE AND BELDING COMMUNICATIONS, INC. AND SUBSIDIARIES
 Consolidated Statements of Income
 (Unaudited, 000's except per share amounts)
 Twelve Months Ended Dec. 31 1990 1991 Pct. Increase
 (Decrease)
 REVENUES $338,138 $341,987 1.1
 OPERATING EXPENSES:
 Salaries and other employee benefits 192,604 198,497 3.1
 Office and general expenses 98,047 108,549 10.7
 Manufacturing costs 18,143 14.331 (21.0)
 Total operating expenses 308,794 321,377 4.1
 Operating margin 29,344 20,610 (29.8)
 NONOPERATIONAL ITEMS:
 Other Income (expense) (6,282) (4,726) (24.8)
 Unusual Items 1,042 (41,594)
 $ (5,240) (46,320)
 Income Before Provision for
 Taxes on Income 24,104 (25,710) (206.7)
 Provision for Federal, Foreign &
 State Income Taxes 12,505 2,409 (80.7)
 $ 11,599 $(28,119) (342.4)
 Minority Interest Expense (273) (230) (15.8)
 Equity in Earnings (Losses) of
 Affiliated Companies 10,298 9,201 (10.7)
 NET INCOME $ 21,624 $(19,148) (188.5)
 Net Income Per Common and Common
 Equivalent Share $ 2.10 $ (1.81) (186.2)
 Avg No. of Common & Common
 Equivalent Shares Outstanding 10,289 10,550 2.5
 Operating margin percentage 8.7 pct. 6.0 pct.
 THREE MONTHS ENDED DEC. 31 1990 1991 Pct.
 Increase
 (Decrease)
 REVENUES $ 94,910 $ 94,854 (0.1)
 OPERATING EXPENSES:
 Salaries and other employee benefits 50,367 51,402 2.1
 Office and general expenses 26,254 32,600 24.2
 Manufacturing costs 5,586 3,824 (31.5)
 Total operating expenses 82,207 87,826 6.8
 Operating margin 12,703 7,028 (44.7)
 NONOPERATIONAL ITEMS:
 Other Income (expense) (2,548) (1,340) (47.4)
 Unusual Items 1,042 (41,594)
 $ (1,506) (42,934) 2,750.9
 Income Before Provision for
 Taxes on Income 11,197 (35,906) (420.7)
 Provision for Federal, Foreign &
 State Income Taxes 5,835 (2,445) (141.9)
 $ 5,362 ($33,461) (724.0)
 Minority interest expense (98) (109) 11.2
 Equity in Earnings (Losses) of
 Affiliated Companies 4,448 4,326 (2.7)
 NET INCOME $ 9,712 $(29,244) (401.1)
 Per Common and Common
 Equivalent Share $ 0.94 $ (2.74) (391.5)
 Avg No. of Common & Common
 Equivalent Shares Outstanding 10,360 10,664 2.9
 Operating margin percentage 13.4 pct 7.4 pct
 FOOTE, CONE & BELDING COMMUNICATIONS INC. AND SUBSIDIARIES
 PRO FORMA SUMMARY OF OPERATING RESULTS (000s) (UNAUDITED)
 3 MONTHS ENDED DEC. 31 12 MONTHS ENDED DEC. 31
 1990 1991 1990 1991
 REVENUES
 FCB (ex Europe) $ 94,910 $ 94,854 $338,138 $341,987
 European Holdings 75,037 90,430 208,536 224,845
 $169,947 $185,284 $546,674 $586,832
 OPERATING MARGIN
 FCB (ex Europe) $ 12,703 $ 7,028 $ 29,344 $ 20,610
 European Holdings 10,300 10,575 24,943 26,119
 $ 23,003 $ 17,603 $ 54,287 $ 46,729
 NET INCOME
 FCB (ex Europe) $ 5,184 $ 2,764 $ 11,757 $ 8,373
 Unusual Items 277 (35,981) 277 (35,981)
 European Holdings 4,251 3,973 9,590 8,460
 $ 9,712 $(29,244) $ 21,624 $(19,148)
 -0- 2/13/92
 /CONTACT: Tery Ashwill, 312-751-7002, or Owen Dougherty, 312-751-7789, both of FCB, Inc./
 (FCB) CO: Foote, Cone and Belding Communications, Inc. ST: Illinois IN: ADV SU: ERN


PS -- NY119 -- 0040 02/13/92 20:55 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 13, 1992
Words:1316
Previous Article:IPS HEALTH CARE REPORTS ON CASH FLOW
Next Article:DOUG COLLINS NAMED PRESIDENT OF DAYS INNS OF AMERICA
Topics:


Related Articles
FCB REPORTS THIRD QUARTER RESULTS
FCB REPORTS FIRST QUARTER RESULTS
FCB REPORTS FIRST QUARTER RESULTS
FCB REPORTS SECOND QUARTER RESULTS
FCB REPORTS THIRD QUARTER RESULTS
FCB REPORTS 1992 RESULTS
FCB REPORTS FIRST QUARTER RESULTS
FCB REPORTS RECORD SECOND QUARTER RESULTS
FCB REPORTS IMPROVED THIRD QUARTER RESULTS
FCB REPORTS 1993 RESULTS: FOURTH QUARTER EARNINGS REACH RECORD LEVEL

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters