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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 1999
True North Communications Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-5029 36-1088161
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
101 East Erie Street, Chicago, Illinois 60611-2897
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 425-6500
(Not Applicable)
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On March 3, 1999, the Registrant issued a release in the form attached to
this Report as Exhibit 99.1.
On March 10, 1999, the Registrant issued a release in the form attached to
this Report as Exhibit 99.2.
On March 11, 1999, the Registrant issued a release in the form attached to
this Report as Exhibit 99.3.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
99.1 Press Release dated March 3, 1999.
99.2 Press Release dated March 10, 1999.
99.3 Press Release dated March 11, 1999.
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SIGNATURES
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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 thereunto duly authorized.
TRUE NORTH COMMUNICATIONS INC.
By: /s/ Dale F. Perona
-----------------------------------
Name: Dale F. Perona
Title: Senior Vice President and Secretary
Date: March 11, 1999
3
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit No. Description
<C> <S>
99.1 Press Release dated March 3, 1999.
99.2 Press Release dated March 10, 1999.
99.3 Press Release dated March 11, 1999.
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Exhibit 99.1
March 3, 1999
Susan Geanuleas: 312/425-6570
FOR IMMEDIATE RELEASE
TRUE NORTH DECLARES FIRST QUARTER DIVIDEND
--Also Announces Date of Annual Stockholders' Meeting--
and
--Authorizes Additional Repurchase of Shares of its Common Stock--
CHICAGO--The Board of Directors of True North Communications Inc. (NYSE:TNO), on
March 3, 1999, voted a quarterly dividend of $.15 per share, payable on April 1,
1999 to shareholders of record at the close of business on March 18, 1999.
The Board of Directors has called the annual meeting of stockholders of True
North Communications Inc. to be held on Wednesday, May 26, 1999 in Chicago.
True North also announced today that its Board of Directors authorized an
increase in its previously announced and executed $10,000,000 stock repurchase
program. The new program will now allow True North to repurchase an additional
$20,000,000 in True North stock.
Stock repurchased under this program would be held as treasury shares for
issuance under the Company's stock-based benefit plans. True North has
approximately 46.8 million shares of Common Stock outstanding.
True North Communications, the sixth largest marketing communications holding
company in the world, has its headquarters in Chicago and serves clients from
more than 300 full-service operations in 81 countries. With two global
advertising networks, Foote, Cone & Belding Worldwide and Bozell Worldwide, as
well as The Diversified Companies Group, True North has annual revenues
exceeding $1.2 billion.
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Exhibit 99.2
March 10, 1999
Don Seeley: 312/425-6505
Susan Geanuleas: 312/425-6570
FOR IMMEDIATE RELEASE
TRUE NORTH REPORTS SIGNIFICANT IMPROVEMENT
IN OPERATING RESULTS
--Successfully Completes Year of Significant Earnings Growth and Change--
CHICAGO--True North Communications Inc. (NYSE: TNO), the world's sixth largest
advertising holding company, today announced a significant improvement in its
operating results for the year ended December 31, 1998. Excluding unusual items
in both 1997 and 1998, net income increased 25.7% to $69.4 million, while
operating income increased 29.4% to $131.1 million. Fully diluted earnings per
share increased 20% to $1.50 per share from $1.25 per share in 1997 excluding
unusual items in both years.
The operating income improvement for the first year of the combined company
following the acquisition of BJK&E in December 1997 reflects the Company's
significant achievement in managing costs, centralizing services, and capturing
merger synergies through its successful integration process.
Despite the resignation of Mazda precipitated by the BJK&E acquisition, revenues
for the full year increased 3.1% to $1,242.3 million; noteworthy is the fact
that international revenues increased 11.6%.
The same strong performance pattern was recorded for the fourth quarter, with
revenues increasing 3.8% over prior year and earnings up significantly.
Excluding unusual items, net income was $34.7 million, up 33.3%, while operating
income increased 26.9% to $55.9 million. Fully diluted earnings per share
increased 27.1% to $0.75 per share in 1998 from $0.59 per share in 1997
excluding unusual items in both years.
-More-
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2/TN REPORTS SIGNIFICANT IMPROVEMENT IN OPERATING RESULTS
"The focus of our management team will be to continue to further grow operating
margin," said Bruce Mason, Chief Executive Officer of True North. "The strong
margin improvement in 1998 is indicative of things to come," Mr. Mason
explained.
Unusual Items
True North's fourth quarter 1997 results included a pre-tax charge in the amount
of $131 million for merger-related expenses, post-merger restructuring activity
and other unusual items.
In the fourth quarter of 1998, True North recorded a pre-tax loss of $30.5
million on the previously announced conversion of its investment in Publicis
Communication to shares of Publicis S.A., the publicly traded French parent
company.
Additionally, pre-tax charges of $4.3 million for write-downs associated with
the Modem Media.Poppe Tyson merger were incurred in the third quarter of 1998,
and $9.1 million for management retirement costs, and severance charges at FCB
in connection with a recent acquisition, were recorded in the fourth quarter--
all of which were offset by pre-tax gains from the sale of some of True North's
holdings in DoubleClick.
Including unusual items in both years, net income in 1998 was $36.1 million or
$.78 per share on a diluted basis versus a loss of ($50.0) million or ($1.17)
per share in 1997.
Executed Successful IPO of Interactive Business
With the acquisition of BJK&E, True North acquired Poppe Tyson and in the third
quarter of 1998 combined it with Modem Media to create one of the largest
interactive companies in the world. In November 1998 an IPO was filed and
successfully launched February 5, 1999. True North retains majority ownership
of Modem Media.Poppe Tyson.
-More-
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3/TN REPORTS SIGNIFICANT IMPROVEMENT IN OPERATING RESULTS
Acquisitions Accelerate in Second Half of 1998
With the integration of BJK&E well on track, True North began building out its
network in key high-growth areas such as international agencies, public
relations, direct marketing, and promotions across its three operating units:
FCB Worldwide, Bozell Worldwide, and the Diversified Companies group. True
North completed 14 additional purchases since the BJK&E acquisition in December
1997.
FCB Worldwide strengthened its position in the United Kingdom and Europe by
acquiring London-based Banks, Hoggins, O'Shea; and in Latin America with the
addition of Giovanni Comunicacoes, which has offices in Rio de Janeiro, Sao
Paulo, and Brasilia. FCB has 169 offices operating in 81 countries, including
newly-opened offices in Auckland, Malaysia, London, Madrid, Portugal, Lima,
Brazil and Mexico.
Bozell Worldwide expanded its global network with three new operations: Borsch,
Stengel & Partner in Frankfurt, Germany; Avrett, Free & Ginsberg, a New York-
based agency with national and international accounts; and Smart Communications,
a full-service affiliate in Moscow. Bozell Kamstra acquired McDougall
Associates, a marketing, advertising and PR firm based in Boston. Bozell has
90 offices operating in 56 countries.
In the area of public relations, APR/Wilkens, one of the top ten PR firms in
Germany, joined True North's BSMG Worldwide, which also acquired Adamson
Associates, a Brussels firm specializing in regulatory affairs; and the
Financial Relations Board (FRB), the nation's third largest independent public
relations firm. The combination of FRB and BSMG Worldwide is expected to create
the largest financial public relations practice in the world, and the sixth
largest PR group of any kind.
The Promotion Services Group acquired Barr Benedett Group (BBG), a promotions
agency specializing in building traffic and sales for the retail, restaurant,
food service, lodging and banking industries; and Wells Marketing, a San
Francisco-based agency with strengths in the financial services as well as the
telecommunications industries.
-More-
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4/TN REPORTS SIGNIFICANT IMPROVEMENT IN OPERATING RESULTS
True North Companies Score Major New Business Wins
Topping off new business gains for 1998 were three major victories announced in
the fourth quarter:
. Bozell Worldwide and Temerlin McClain partnered to win the Bank of
America global account. (True North companies serve 25 global clients.)
. Modem Media.Poppe Tyson and R/GA Interactive were two of only six
agencies of record chosen by IBM to carry forward its interactive
marketing. Initially, more than 100 companies were under consideration
by IBM; no company other than True North holds two of the winners.
. Temerlin McClain landed the Nortel account.
Other significant wins in the fourth quarter alone include: Kraft Foods'
California Pizza Kitchen (FCB Chicago); Kraft-Starbucks joint venture (FCB New
York); Merrill Lynch (Stedman Graham & Partners); U-Haul (Wahlstrom & Company);
Freeman Cosmetics (Bozell Costa Mesa); Kiwi shoe care (Bozell Asia-Pacific);
Oakland Athletics (FCB San Francisco); National Association of Baseball Leagues
(MGRSports); Volvo Deutchland (FCB/Wilkens, Hamburg); Financial Times (Avrett,
Free & Ginsberg); Merck Manual (Stedman Graham & Partners); Chase Cardmember
Services (Stedman Graham & Partners); Quaker Chewy Granola Bar (FCB Chicago).
Poised to Meet Marketers' Needs in the 21st Century
In addition to holding three strong agency brands (two of these global), and the
global leader in interactive technology--Modem Media.Poppe Tyson--True North has
a robust and growing portfolio of service companies in high-growth, diversified
communications such as public relations, promotion, health care and Yellow
Pages. Combined diversified operations have the scale, diversity and quality to
provide clients with integrated marketing solutions and to contribute
significantly to True North's revenues.
-More-
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5/TN REPORTS SIGNIFICANT IMPROVEMENT IN OPERATING RESULTS
"This has been a year of integrating, organizing, building, and expanding. We
are on course and now it's full speed ahead. The investments we made early on
can be expected to reap significant rewards as we approach the millennium. We
look forward to 1999 and the opportunity it offers to significantly increase
operating margin," Mr. Mason concluded.
True North Communications includes two global advertising networks--Foote, Cone
& Belding Worldwide and Bozell Worldwide--and is the world's sixth largest
advertising holding company, with over 300 full-service operations and annual
revenues exceeding $1.2 billion.
This news release includes forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from results indicated in
any forward-looking statements. The Company cautions that future results are
subject to, and should be considered in light of, risks, uncertainties and other
factors that may affect future results.
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(Tables follow)
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True North Communications Inc.
Consolidated Income Statement
(000s, except per share amounts)
<TABLE>
<CAPTION>
Memo - Excluding
Unusual Items Quarter Ended December 31,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Revenues 356,057 342,973 356,057 342,973
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Operating Expenses:
Salaries and other
employee benefits 207,607 198,352 216,707 201,880
Office and general
expenses 90,713 99,462 90,713 133,734
Provision for
doubtful accounts 1,791 1,083 1,791 13,285
Subsidiary
reorganization costs - - - -
Restructuring and
Merger-related expenses - - (1,066) 80,946
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Total operating expenses 300,111 298,897 308,145 429,845
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Operating Margin 55,946 44,076 47,912 (86,872)
Other Income (Expense) (69) (769) (21,628) (769)
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Income Before Provision
for Taxes on Income 55,877 43,307 26,284 (87,641)
Provision for Federal,
Foreign & State
Income Taxes 23,221 20,078 26,920 (11,342)
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32,656 23,229 (636) (76,299)
Minority Interest
Expense (798) (1,090) (798) (1,172)
Equity In Earnings (Losses)
of Affiliated Companies 2,852 3,901 2,852 3,876
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Net Income 34,710 26,040 1,418 (73,595)
========== ========== ========== ===========
Basic Earnings Per Share 0.77 0.61 0.03 (1.73)
========== ========== ========== ===========
Dilutive Earnings Per
Share 0.75 0.59 0.03 (1.67)
========== ========== ========== ===========
Operating Margin
Percentage 15.7% 12.9% 13.5% -25.3%
</TABLE>
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True North Communications Inc.
Consolidated Income Statement
(000's, except per share amounts)
<TABLE>
<CAPTION>
Memo - Excluding
Unusual Items Year Ended December 31,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Revenues 1,242,309 1,204,887 1,242,309 1,204,887
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Operating Expenses:
Salaries and other employee benefits 763,953 740,754 773,053 744,282
Office and general expenses 343,863 360,495 343,863 401,617
Provision for doubtful accounts 3,410 2,361 3,410 14,563
Subsidiary reorganization costs - - 4,344 -
Restructuring and Merger-related expenses - - (1,066) 80,946
---------------- --------------- ---------------- ----------------
Total operating expenses 1,111,226 1,103,610 1,123,604 1,241,408
---------------- --------------- ---------------- ----------------
Operating Margin 131,083 101,277 118,705 (36,521)
Other Income (Expense) (11,780) (9,583) (28,916) (9,583)
---------------- --------------- ---------------- ----------------
Income Before Provision for Taxes on Income 119,303 91,694 89,789 (46,104)
Provision for Federal, Foreign &
State Income Taxes 53,052 43,926 56,788 11,230
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66,251 47,768 33,001 (57,334)
Minority Interest Expense (4,044) (2,303) (4,044) (2,385)
Equity in Earnings (Losses) of Affiliated
Companies 7,158 9,698 7,158 9,673
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Net Income 69,365 55,163 36,115 (50,046)
================ =============== ================ ================
Basic Earnings Per Share 1.56 1.29 0.81 (1.17)
================ =============== ================ ================
Dilutive Earnings Per Share 1.50 1.25 0.78 (1.13)
================ =============== ================ ================
Operating Margin Percentage 10.6% 8.4% 9.6% -3.0%
</TABLE>
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Exhibit 99.3
March 11, 1999
Susan Geanuleas: 312/425-6570
Cheryl Harbour: 312/425-6542
FOR IMMEDIATE RELEASE
TRUE NORTH NAMES DAVID BELL AS NEXT CEO
---------------------------------------
True North Communications Inc. (NYSE: TNO), announced today that David Bell will
become Chairman and CEO of True North on March 31 when Bruce Mason, the current
CEO, retires. Mr. Bell is currently CEO of Bozell Worldwide, one of two global
advertising agencies owned by True North.
The selection of Mr. Bell concludes a year-long management succession process in
which both internal and external candidates were considered. Mr. Mason and the
True North Board of Directors publicly promised a decision by the end of the
first quarter of 1999 and have kept to that commitment.
"David Bell is admired and respected throughout the communications industry as a
smart, driven, compassionate leader," said Mr. Mason. "The Board and I are
completely confident that David has the talent to take the helm and move True
North to new heights as we approach the beginning of the 21st Century."
Mr. Bell joined Bozell in 1975, when the agency of which he was president, Knox
Reeves Advertising, was acquired. At Bozell he has been involved with many of
the agency's largest accounts including Chrysler, Bristol-Myers Squibb, and The
New York Times. He became CEO of Bozell Worldwide in 1995.
-More-
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2/TRUE NORTH NAMES DAVID BELL AS NEXT CEO
During Mr. Bell's tenure as Bozell CEO, the agency became one of the fastest
growing among all worldwide agencies: a 22% increase from 1997 to 1998 and a
four-year growth rate of 125%. He was instrumental in the recent win of the $115
million Bank of America account. Bozell is best known for its award-winning Milk
Mustache and Jeep(R) campaigns.
Mr. Bell is widely known within the advertising business as one of the its most
ardent industry advocates. He was the recent past Chairman of American
Association of Advertising Agencies (the 4A's), twice Chairman of the
Advertising Federation, and is currently Chairman of the Advertising Educational
Foundation. No other individual within the communications business has been this
active or has held as many high profile industry positions.
The True North holding company that Mr. Bell inherits has been in existence for
only four years. In that time it has tripled in size and now ranks as the sixth
largest global communications holding company with approximately $12 billion in
global billings. It has over 300 operations in 83 countries serving numerous
local clients, as well as 25 major global clients.
True North owns three operating groups--Bozell Worldwide; Foote, Cone & Belding
Worldwide; and the True North Diversified Companies Group that includes public
relations, sales promotion, direct marketing, health care, Yellow Pages, ethnic
marketing, and interactive media. In fact, True North is considered one of the
leaders in the area of interactive media with its ownership of R/GA Interactive
and Modem Media.Poppe Tyson, a subsidiary that it just took public within the
last 30 days with its own very successful IPO.
True North just yesterday released 1998 year-end earnings that exceeded Wall
Street expectations. Total net income was up 25.7% with income from operations
up 29.4%, representing one of the biggest year-to-year increases the company has
posted in the last decade.
-More-
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3/TRUE NORTH NAMES DAVID BELL AS NEXT CEO
Succeeding Mr. Bell as CEO of Bozell Worldwide is Leo-Arthur Kelmenson, who will
also retain his current title of Chairman. Mr. Kelmenson and Brendan Ryan,
Chairman and CEO of FCB Worldwide, two highly-regarded executives, both declined
to be considered for the True North CEO position, stating that they both
preferred to stay as agency heads and to continue to interact directly with the
product for their clients as opposed to taking on the more financially-oriented
role of the CEO of the holding company. Charles D. Peebler, Jr., continues as
Chairman and CEO of the True North Diversified Companies and as a Board
Director.
As part of the transition to a new CEO at True North, Don Seeley, currently CFO
of True North, will take on the added role of Vice Chairman. Don Elliman, a True
North outside Director, and past President of Sports Illustrated, was appointed
Chairman of the Board's Executive Committee.
An interesting coincidence of Mr. Bell succeeding Mr. Mason is that they both
began their advertising careers on the same day, at the same agency (Leo
Burnett), in fact, as trainees sharing the same desk. "I've known David for over
30 years now; he is one of the best in the business. I couldn't be any prouder
or happier that he's taking over for me." Mr. Bell is 55; Mr. Mason turns 60
later this year.
Mr. Bell will be based out of True North headquarters in Chicago.
True North Communications, the sixth largest marketing communications holding
company in the world, has its headquarters in Chicago and serves clients from
more than 300 full-service operations in 83 countries. With two global
advertising networks, Foote, Cone & Belding Worldwide and Bozell Worldwide, as
well as The Diversified Companies Group, True North has annual revenues
exceeding $1.2 billion.
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