SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 24, 1997
Date of Report (Date of earliest event reported)
THE CHARLES SCHWAB CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9700 94-3025021
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
101 Montgomery Street, San Francisco, California 94104
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code): (415) 627-7000
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Item 5. Other Events.
On December 24, 1997, The Charles Schwab Corporation (the "Company")
issued the press release attached as Exhibit 99.1 hereto, relating to (i) fourth
quarter and year-end expected earnings and (ii) announcing the settlement of a
class-action litigation.
Item 7(c). Exhibits.
99.1 Press Release of The Charles Schwab Corporation
dated December 24, 1997.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHARLES SCHWAB CORPORATION
(Registrant)
By: /s/ CHRISTOPHER V. DODDS
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Name: Christopher V. Dodds
Title: Senior Vice President -
Corporate Controller
Dated: December 24, 1997
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EXHIBIT INDEX
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Exhibit No. Description of Exhibit
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99.1 Press Release of The Charles Schwab Corporation,
dated December 24, 1997.
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Exhibit 99.1
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FOR IMMEDIATE RELEASE
CONTACTS: Media Kate Rohrbach (415) 627-7810
Investors/Analysts Rich Fowler (415) 636-9869
SCHWAB ESTIMATES FOURTH QUARTER AND FULL-YEAR RESULTS
FOLLOWING LITIGATION SETTLEMENT
SAN FRANCISCO, December 24, 1997 - The Charles Schwab Corporation expects
to report fourth quarter 1997 net income of $60 to $66 million, or $.22 to $.24
per share, on revenues of about $620 million. The Company's fourth quarter 1997
results will reflect charges associated with its agreement yesterday to pay
approximately $46 million pre-tax, or $27 million after-tax, to settle a
class-action lawsuit involving its Mayer & Schweitzer, Inc. subsidiary and 36
other firms engaged in making markets in Nasdaq securities. The lawsuit alleged
that these firms in the past followed quotation patterns in some securities that
resulted in spreads being wider than they otherwise would have been during some
months. The Company believes that these allegations are unfounded and denies
that Mayer & Schweitzer engaged in any wrongdoing, but feels that the
settlement, which includes virtually all of the remaining firms named in the
suit, is in the best interests of its customers and stockholders. The settlement
is expected to be filed today with U.S. District Judge Robert W. Sweet and is
contingent upon court approval and other conditions.
Under the terms of the agreement, approximately 3% of the settlement amount
will be paid in December 1997 and the remainder will be due in September 1998.
The Company does not expect to incur any charges relating to this settlement
beyond the fourth quarter of 1997. Excluding these charges, expected fourth
quarter net income would equal $77 to $83 million, or $.28 to $.30 per share.
During the fourth quarter of 1996, the Company earned $59.7 million, or $.22 per
share, on revenues of $482.3 million.
For full-year 1997, the Company expects to report earnings of $267 to $273
million, or $.98 to $1.00 per share, on revenues of $2.3 billion. Excluding the
expenses recognized in the fourth quarter and other charges during the year
relating to this litigation, expected full-year 1997 net income would total $290
to $296 million, or $1.06 to $1.08 per share. Net income for 1996 was $233.8
million, or $.87 per share, on revenues of $1,850.9 million.
Through December 22, month-to-date daily average revenue trades by Schwab
customers were approximately 73,000. The Company's complete operating and
financial results will be reported in mid-January. The Charles Schwab
Corporation (NYSE:SCH), through its principal operating subsidiary, Charles
Schwab & Co., Inc., provides financial services for 4.8 million active accounts
with $348 billion in assets through 272 branch offices.
