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UNITED STATES
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
DATE OF REPORT: JULY 7, 1998
DATE OF EARLIEST EVENT REPORTED: JUNE 30, 1998
PRIMARK CORPORATION
(Exact name of registrant as specified in its charter)
1-8260
(Commission File Number)
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<CAPTION>
MICHIGAN 38-2383282
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1000 WINTER STREET, SUITE 4300N, WALTHAM, MA 02154
(Address of principal executive offices) (Zip Code)
</TABLE>
781-466-6611
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On June 30, 1998, the Company announced a new organizational structure whereby
its business operations have been integrated into three divisions - Primark
Financial Information Division consisting of the businesses of Datastream/ICV,
Disclosure and Worldscope, the Primark Financial Analytics Division consisting
of the businesses of I/B/E/S, Baseline and Vestek and the Primark Decision
Information Division containing the businesses of WEFA and the Yankee Group.
Each division will be led by a newly named president and CEO.
In connection with the restructuring and integration, the Company reviewed all
tangible and intangible assets in light of the newly configured corporate
structure. Due to overlapping capabilities arising from the integration, certain
software and data assets have been reduced in value. As a result, the company
will record $77.4 million of pretax charges in the quarter ending June 30, 1998.
The write-offs are comprised of $69.5 million of non-cash charges, as well as
$7.9 million of cash based charges. The cash based charges result primarily from
severance and abandoned rental space costs in the newly restructured
organization.
The non-cash charges are comprised of the following (i) $8.7 million of deferred
debt issue costs and call premiums associated with the payoff of the Term Loan
and the redemption of the Senior Notes with the proceeds of the sale of TASC;
(ii) $25.2 million of capitalized software due to the planned integration of
several product offerings on common software platforms; (iii) $3.0 million
associated with the write off of a trademark no longer to be used; (iv) $1.5
million of data determined to be duplicative and which will not be used
following the software platform integration; and (v) $23.9 million of goodwill
associated with certain software and data referred to and $7.1 million of
goodwill associated with DAFSA.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Financial statements are not required and therefore have not been filed with
this Form 8-K.
EXHIBITS
Exhibit
Number Description
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1.1 Primark Corporation's June 30, 1998 Press Release
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SIGNATURE
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 thereunto duly authorized.
PRIMARK CORPORATION
Date: July 7, 1998 By: /s/ STEPHEN H. CURRAN
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Stephen H. Curran
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
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Exhibit 1.1
[LOGO: PRIMARK] NEWS
RELEASE
Primark Corporation
1000 Winter Street, Suite 4300N
Waltham, MA 02154-1248
http://www.primark.com
Contact: Joseph E. Kasputys, Chairman and CEO, 781.487.2102
Stephen H. Curran, EVP and CFO, 781.487.2140
Dana Kawiecki, Investor Relations, 781.487.2124
PRIMARK ANNOUNCES NEW ORGANIZATIONAL STRUCTURE AND
RESTRUCTURING CHARGE
ALL OPERATIONS INTEGRATED INTO THREE CUSTOMER-FOCUSED DIVISIONS
WALTHAM, MA, June 30, 1998 - Primark Corporation - (NYSE/PSE: PMK) announced
today a new organizational structure designed to serve its customers better,
take advantage of market opportunities and reduce costs. All business operations
have been integrated into three customer-focused divisions, with each division
led by a newly named president and CEO. Primark also announced that it would
record restructuring and integration charges totaling $77.4 million in the
quarter ending June 30, 1998, with $7.9 million of these charges representing
cash costs related to the reorganization. Primark's three new divisions are:
PRIMARK FINANCIAL INFORMATION DIVISION. This division consists of the businesses
of Datastream/ICV, including Primark Investment Management Services, Disclosure
and Worldscope. This division will focus on developing "enterprise-wide"
products and services for major financial institutions on a global basis. It
will also have responsibility for all real-time and transactional products,
investment accounting, and the reference and consumer markets. This division
will manage the corporate network, PrimarkNet. Steven L. Schneider has been
named as president and CEO of the Primark Financial Information Division. He has
been serving as president of Disclosure, Inc., a position he will continue to
hold.
David Taylor, previously the president and CEO of Datastream/ICV, will move to
the new position of chairman, Primark Financial Information Division. He will be
actively involved in strategic planning and development and will provide
oversight for certain new initiatives, such as the imminent rollout of the
Primark/Dow Jones Equities Service. Christopher Sharples will continue as
chairman of Datastream/ICV, participating in strategy, marketing and sales.
PRIMARK FINANCIAL ANALYTICS DIVISION. This division includes the businesses of
I/B/E/S, Baseline and Vestek, and will concentrate on developing and marketing a
wide variety of analytical products for money managers, fund sponsors and other
investors. These products will combine databases, advanced software, analytical
techniques and forecasts for all phases of the investment process. Joseph
Riccobono has been named president and CEO of the Primark Financial Analytics
Division. He has been serving as president of I/B/E/S, Inc., a position he will
continue to hold.
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PRIMARK DECISION INFORMATION DIVISION. This division has the mission to acquire,
develop and operate information content businesses that are primarily focused in
areas other than the financial marketplace. However, it will also provide
products and services for decision support to financial customers as well. This
division contains the businesses of WEFA and the Yankee Group, along with the
oversight role for Primark's investment in Primark Decision Economics, the joint
venture with economist Dr. Allen Sinai. Patrick G. Richmond has been appointed
president and CEO of the Primark Decision Information Division. Previously, he
served as Primark's executive vice president of corporate development and
managed several Primark companies.
PRIMARK DATA COMPANY / OTHER CHANGES
The scope and responsibilities of the existing Primark Data Company (PDC) have
been materially increased. In addition to its current responsibilities for
economic data and for corporate-wide database integration and concordance, this
company will contain all the data operations for Datastream/ICV, Disclosure and
Worldscope. PDC will aggressively acquire new data, improve data quality and
reduce costs. With major operations in the United States, the United Kingdom,
Shannon, Ireland and Bangalore, India, PDC will provide global data knowledge
and support to the three divisions and their customers. Robert Bulik has been
named president and CEO of the Primark Data Company. He was previously
responsible for the data operations of both Disclosure and Worldscope.
The financial staffs across all Primark companies have been centralized under
Stephen H. Curran, Primark's executive vice president and chief financial
officer. Similarly, all legal, human resources and administrative functions have
been placed under Michael. R. Kargula, Primark's executive vice president and
general counsel.
Cheryl Gustitus, director of corporate marketing, will now report directly to
Primark's chairman and CEO. This move is to place greater emphasis on
strengthening Primark's relationship with its major customers and on
establishing Primark more firmly as a leading brand. Ira Herenstein will move
into a new role as special assistant, serving as a consultant to the chief
executive officer. He will work on a number of projects, such as relationships
with global accounts, marketing initiatives and corporate development
activities. Previously, Herenstein was Primark's senior vice president of
marketing.
"These organizational and management changes totally concentrate Primark's
operations and resources in the markets for data, software, analyses and
forecasts," said Joseph E. Kasputys, Primark's chairman and chief executive
officer. "We have been preparing for these initiatives for some time, which
thoroughly integrate our businesses and align Primark very closely with our
customers and growth opportunities," he added.
RESTRUCTURING AND INTEGRATION CHARGES
Because of the magnitude of this restructuring and integration, the Company
carefully reviewed all tangible and intangible assets. While the company
believes all of its intangible assets are valuable and productive on a
stand-alone basis, each asset was reviewed in light of the newly configured
corporate structure. Due to overlapping capabilities arising from the
integration, certain software and data assets have been reduced in value. As a
result, the Company will record $77.4 million of pretax restructuring and
related charges in the second quarter of 1998.
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The write-offs are comprised of $69.5 million of non-cash charges, as well as
$7.9 million of cash based restructuring charges. The cash based restructuring
charges result primarily from severance and abandoned rental space costs in the
newly restructured organization. The payback on such charges is estimated to be
one year. The amount of this charge is lower than our estimate announced on May
1, 1998, but has been carefully determined to reflect the final restructuring
plan.
The non-cash charges can be separated into four categories. First, because
Primark repaid all outstanding debt with the proceeds from the sale of TASC, the
Company will write off, as an extraordinary item, $8.7 million of deferred debt
issue costs and call premiums associated with the retired bank loans and public
notes. Second, due to the planned integration of several product offerings on
common software platforms, the Company will write off $25.2 million of
capitalized software, which had an average remaining life of three years. Third,
the Company will write off $1.5 million of data that has been determined to be
duplicative and will not be used as a result of the software platform
integration previously discussed. Fourth, the Company will write off $31.0
million of goodwill, with an average remaining life of thirty-five years. Of the
total goodwill written off, $23.9 million is associated with certain software
and data discussed above that were included with acquired companies. This
portion of the goodwill write-off is required under current accounting
literature to be taken on a pro rata basis when acquired software and data is
also written off. The final portion of the goodwill write-off is associated with
the Company's French operation, DAFSA. The remaining non-cash charges relate to
the write-off of a trademark no longer used in the restructured organization.
"Ninety percent of these restructuring charges represent non-cash items affected
by the sale of TASC, Inc. this past April and by the reorganization announced
today," said Joseph E. Kasputys. "We will get a very rapid payback on all the
cash expenditures and reduce amortization costs by over $7 million after tax for
each of the next several years," he explained.
Primark Corporation (www.primark.com), headquartered in Waltham, Massachusetts,
is a $400 million global information services company that collects, integrates
and delivers financial, economic and market research information. Primark, with
customers in 61 countries and 80 offices in 21 countries, serves financial,
corporate and government decision-makers worldwide.
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