FCB REPORTS THIRD QUARTER RESULTS
FCB REPORTS THIRD QUARTER RESULTS CHICAGO, Nov. 7 /PRNewswire/ -- Foote, Cone & Belding
Communications, Inc. (NYSE: FCB), today reported that revenues increased for both the quarter and first nine months of 1991. Consolidated operating margins declined to $6,450,000 for the quarter and $13,582,000 for the nine months. Earnings per share for the third quarter were $.22 in 1991, down from $.30 in the prior year. For the nine-month period, earnings per share declined to $.96 in 1991 from $1.16 in 1990.
QUARTER ENDED SEPT. 30, 1991 Net income for the third quarter decreased to $2,354,000 from $3,097,000 in 1990. Pro forma combined revenues (including FCB's proportionate share of European revenues) increased to $133,451,000 in 1991 from $128,850,000 in 1990. Consolidated revenues (excluding Europe) totaled $86,847,000 in 1991, compared to $86,318,000 in 1990. Excluding the effects of currency and acquisitions, consolidated revenues would have declined 2 percent and revenues on a combined basis would have been flat. Operating expenses for consolidated operations increased by 2.1 percent for the quarter. Excluding the effects of acquisitions and currency, expenses would have been flat. Consolidated operating margins declined to $6,450,000 from $7,544,000 in the prior year. Most of the decline in operating margin is attributable to the operating difficulties at Krupp/Taylor, FCB's Los Angeles-based direct marketing and printing facility. Krupp/Taylor continues to suffer from revenue shortfalls and high real estate costs. Steps have been taken to downsize the Krupp/Taylor operations. Management is closely reviewing the valuation of this operation. Equity income, which consists primarily of FCB's share of European operations, was a loss of $288,000 in 1991, compared to income of $565,000 in 1990. 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 following the acquisition of Overad Group. NINE MONTHS ENDED SEPT. 30, 1991 Net income for the nine months ended Sept. 30, 1991 was $10,096,000 or $.96 per share, compared to $11,912,000 or $1.16 per share in 1990. Pro forma combined revenues (including Europe) increased to $401,548,000 in 1991 from $376,727,000 in 1990. Consolidated revenues (excluding Europe) totaled $247,133,000 in 1991, compared to $243,228,000 in 1990. Excluding the effects of currency and acquisitions, pro forma revenues would have increased approximately 2 percent. On a nine-month basis, operating expenses increased 3.1 percent between years, slightly higher than the rate of increase in consolidated revenues. As a result, operating margin declined to $13,582,000 in 1991 from $16,641,000 in 1990. As in the quarter results, most of the margin decline for the nine months was attributable to Krupp/Taylor. In addition, severance costs incurred in the first three quarters of 1991 to bring staffing levels in line with anticipated slower revenue growth reduced operating margins for this period. SENIOR MANAGEMENT CHANGES During the third quarter, Terry M. Ashwill joined the company in the role of chief financial officer and as a member of the FCB Communications and Publicis-FCB boards of directors. Ashwill brings more than 20 years of highly successful financial management experience to the company and will be the chief architect of FCB's program to improve financial results. Ashwill is the latest of several key management additions occurring in the second and third quarters. These others include: Brendan Ryan as president of FCB/East; Eric Weber, executive vice president/executive creative director of FCB/Chicago; and Richard Edler, executive vice president/general manager of FCB/Los Angeles. NEW BUSINESS FCB new business gains in the third quarter included: Northwest Airlines (FCB/Leber Katz-New York); Armor All Products Corporation, the leading maker of car care products (FCB/San Francisco); Coors' Moussy non-alcoholic beverage (FCB/Chicago); and The Wherehouse, the country's largest chain of audio/video retail stores (FCB/Los Angeles). FCB continues to pursue new business opportunities aggressively across its worldwide network. Foote, Cone & Belding ranks as the 7th largest worldwide advertising company and the 3rd largest agency in the United States. Its network includes 176 offices in 40 countries, with 1990 worldwide billings, including Publicis-FCB European operations, totaling more than $5 billion. FOOTE, CONE & BELDING COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (000s except per-share amounts) THREE MONTHS ENDED SEPT. 30, 1991 1990 Pct Increase (Decrease) REVENUES $ 86,847 $ 86,318 0.6 OPERATING EXPENSES: Salaries and other employee benefits 49,971 49,297 1.4 Office and general expenses 26,576 25,428 4.5 Manufacturing cost of revenues 3,850 4,049 (4.9) Total operating expenses $ 80,397 $ 78,774 2.1 Operating margin 6,450 7,544 (14.5) Other Income (expense) (1,197) (2,110) (43.3) Income Before Provision for Taxes on Income $ 5,253 $ 5,434 (3.3) Provision for Federal, Foreign & State Income Taxes 2,509 2,880 (12.9) $ 2,744 $ 2,554 7.4 Minority interest expense (102) (22) 363.6 Equity in Earnings (Losses) of Affiliated Companies (288) 565 (151.0) Net income $ 2,354 $ 3,097 (24.0) Net income per common and common equivalent share $ 0.22 $ 0.30 (26.7) Avg. no. of common & common equivalent shares outstanding 10,599 10,398 1.9 Operating margin percentage 7.4 pct 8.7 pct NINE MONTHS ENDED SEPT. 30, 1991 1990 Pct Increase (Decrease) Revenues $247,133 $243,228 1.6 Operating Expenses: Salaries and other employee benefit 147,095 142,237 3.4 Office and general expenses 75,949 71,793 5.8 Manufacturing cost of revenues 10,507 12,557 (16.3) Total operating expenses $233,551 $226,587 3.1 Operating margin $ 13,582 $ 16,641 (18.4) Other Income (expense) (3,386) (3,734) (9.3) Income Before Provision for Taxes on Income $ 10,196 $ 12,907 (21.0) Provision for Federal, Foreign & State Income Taxes 4,854 6,670 (27.2) $ 5,342 $ 6,237 (14.3) Minority interest expense (121) (175) (30.9) Equity in Earnings (Losses) of Affiliated Companies 4,875 5,850 (16.7) Net income $ 10,096 $ 11,912 (15.2) Net income per common and common equivalent share $ 0.96 $ 1.16 (17.2) Avg no. of common & common equivalent shares outstanding 10,514 10,287 2.2 Operating margin percentage 5.5 pct 6.8 pct FOOTE, CONE & BELDING COMMUNICATIONS INC. AND SUBSIDIARIES Pro Forma Summary of Operating Results (000s -- Unaudited) 9 MONTHS ENDED 9-30 3 MONTHS ENDED 9-30 REVENUES 1991 1990 1991 1990 FCB (ex Europe) $247,133 $243,228 $ 86,847 $ 86,318 European Holdings 154,415 133,499 46,604 42,532 $401,548 $376,727 $133,451 $128,850 OPERATING MARGIN FCB (ex Europe) $ 13,582 $ 16,641 $ 6,450 $ 7,544 European Holdings 15,544 14,643 2,080 3,080 $ 29,126 $ 31,284 $ 8,530 $ 10,624 NET INCOME FCB (ex Europe) $ 5,609 $ 6,573 $ 2,841 $ 2,561 European Holdings 4,487 5,339 (487) 536 $ 10,096 $ 11,912 $ 2,354 $ 3,097 -0- 11/7/91 /CONTACT: Terry Ashwill, 312-751-7002 or Gina Greer, 312-751-3520, both of FCB/ (FCB) CO: Foote, Cone & Belding Communications, Inc. ST: Illinois IN: ADV SU: ERN JT -- NY100 -- 2477 11/07/91 19:56 EST
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|Date:||Nov 7, 1991|
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