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 (Date of earliest event reported): July 23, 1998
(July 23, 1998)
FRANKLIN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
.... DELAWARE ................. 1-9318 ....... 13-2670991 ...
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 MARINERS ISLAND BLVD., SAN MATEO, CALIFORNIA ........ 94404...
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code..(650) 312-3000
-------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
Registrant is filing this Form 8-K in order to file a current earnings press
release. By this filing, Registrant is not establishing the practice of filing
all earnings press releases in the future and may discontinue such filings at
any time.
Item 7. Financial Statements and Exhibits
(c)Exhibits
Exhibit "A" - Press Release issued on July 23, 1998 by Franklin Resources, Inc.
<PAGE>
SIGNATURES
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.
FRANKLIN RESOURCES, INC.
(Registrant)
Date: July 23, 1998 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
<PAGE>
Exhibits
A. Press Release issued on July 23, 1998 by Franklin Resources, Inc.
<PAGE>
FROM: Franklin Resources, Inc.
Public Relations: Holly Gibson (650) 312-4701
Investor Relations: Bijan Modanlou (650) 525-7584
www.frk.com
For Immediate Release
Franklin Resources Announces Third Quarter Results
San Mateo, CA, July 23, 1998 -- Franklin Resources, Inc. (NYSE:BEN) today
reported net income of $131.0 million for the third quarter of fiscal 1998,
compared to $126.7 million for the preceding quarter and $111.2 million for the
same quarter a year ago. Operating revenues for the quarter were $672.6 million
compared to $673.7 million for the preceding quarter and $572.5 million a year
ago.
Assets under management by the Company's subsidiaries were $236.6 billion,
compared to $242.0 billion in the preceding quarter and $208.8 billion at this
time last year. Quarterly average assets under management during the current
quarter were $240.5 billion compared to $229.4 billion in the preceding quarter
and $198.2 billion in the same quarter a year ago.
Diluted earnings per share for the quarter ended June 30, 1998 were $0.52
compared to $0.50 for the preceding quarter and $0.44 a year ago after
adjustment for the two-for-one stock split paid on January 15, 1998. Average
diluted shares outstanding for the current and preceding quarters were 253.1
million compared to 252.8 million a year ago.<F1>
Franklin Resources, Inc. provides global and domestic investment
management, shareholder and distribution services to the Franklin Templeton
mutual funds and institutional accounts, servicing over 8.7 million shareholders
in over 100 different nations worldwide. Franklin's headquarters are located at
777 Mariners Island Blvd., San Mateo, CA.
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<F1> All prior period amounts have been restated to reflect a two-for-one stock
split paid on January 15, 1998.
<PAGE>
FRANKLIN RESOURCES, INC.
Consolidated Income Statements
(Dollar amounts in thousands
except assets under management
and per share data.)
Three months ended Nine months ended
June 30 June 30
-------------------------------------------
1998 1997 1998 1997
Operating revenues:
Investment management fees <F1> $373,820 314,600 $1,073,622 855,659
Underwriting and distribution
fees <F1> 252,354 219,110 774,164 573,668
Shareholder servicing fees 40,793 36,614 117,798 90,239
Other 5,629 2,223 13,102 9,802
-------------------------------------------
Total operating revenues 672,596 572,547 1,978,686 1,529,368
------------------------------------------
Operating expenses:
Underwriting and distribution 220,660 190,867 668,378 495,788
Compensation and benefits 152,688 115,476 418,723 321,830
Information systems, technology
and occupancy 37,312 31,474 129,770 86,673
Advertising and promotion 33,782 28,144 92,387 70,216
Amortization of deferred sales
commissions 27,753 18,773 78,174 40,939
Amortization of intangible assets 9,336 8,931 27,280 25,333
Other 22,846 23,657 64,889 63,791
-------------------------------------------
Total operating expenses 504,377 417,322 1,479,601 1,104,570
-------------------------------------------
Operating income 168,219 155,225 499,085 424,798
-------------------------------------------
Other income (expense):
Investment and other income 15,435 8,784 42,006 34,479
Interest expense (6,523) (5,735) (16,501) (19,664)
-------------------------------------------
Other income (expense), net 8,912 3,049 25,505 14,815
-------------------------------------------
Income before taxes on income 177,131 158,274 524,590 439,613
Taxes on income 46,118 47,086 136,393 130,785
-------------------------------------------
Net income $131,013 $ 111,188 $388,197 $308,828
=============================================
Earnings per share: <F2>
Basic $0.52 $0.44 $1.54 $1.23
Diluted $0.52 $0.44 $1.53 $1.22
Dividends per share <F2> $0.05 $0.045 $0.15 $0.13
Average shares outstanding
(in thousands): <F2>
Basic 252,860 252,186 252,771 251,803
Diluted 253,095 252,760 253,383 252,459
Assets under management (in millions):
End of period $236,574 $208,811 $236,574 $208,811
Simple monthly average for
period $240,513 $198,174 $229,916 $183,728
- ------------------------------
<F1> Prior period amounts have been restated to reflect the reclassification of
distribution component of Canadian investment management fee income.
<F2> All prior period amounts have been restated to reflect a two-for-one
stock split paid on January 15, 1998.
<TABLE>
<CAPTION>
Consolidated Income Statements
(Dollar amounts in thousands
except assets
under management and per share Three months ended
data.)
30-Jun-98 31-Mar-98 31-Dec-97 30-Sep-97 30-Jun-97
<S> <C> <C> <C> <C> <C>
Operating revenues:
Investment management fees <F1> $373,820 $351,240 $348,562 $348,264 $314,600
Underwriting and distribution
fees <F1> 252,354 278,622 243,188 250,009 219,110
Shareholder servicing fees 40,793 39,399 37,606 34,666 36,614
Other 5,629 4,430 3,043 968 2,223
-----------------------------------------------------------
Total operating revenues 672,596 673,691 632,399 633,907 572,547
----------------------------------------------------------
Operating expenses:
Underwriting and distribution 220,660 242,406 205,312 216,540 190,867
Compensation and benefits 152,688 132,744 133,291 125,339 115,476
Information systems, technology
and occupancy 37,312 45,862 46,596 48,720 31,474
Advertising and promotion 33,782 31,243 27,362 26,336 28,144
Amortization of deferred sales
commissions 27,753 26,525 23,896 18,526 18,773
Amortization of intangible assets 9,336 8,949 8,995 8,961 8,931
Other 22,846 22,538 19,505 22,823 23,657
----------------------------------------------------------------
Total operating expenses 504,377 510,267 464,957 467,245 417,322
-----------------------------------------------------------------
Operating income 168,219 163,424 167,442 166,662 155,225
-----------------------------------------------------------------
Other income (expense):
Investment and other income 15,435 11,596 14,975 15,107 8,784
Interest expense (6,523) (3,826) (6,152) (5,669) (5,735)
----------------------------------------------------------------
Other income (expense), net 8,912 7,770 8,823 9,438 3,049
----------------------------------------------------------------
Income before taxes on income 177,131 171,194 176,265 176,100 158,274
Taxes on income 46,118 44,525 45,750 50,865 47,086
----------------------------------------------------------------
Net income $131,013 $126,669 130,515 125,235 111,188
================================================================
Earnings per share: <F2>
Basic $0.52 $0.50 $0.52 $0.50 $0.44
Diluted $0.52 $0.50 $0.52 $0.50 $0.44
Dividends per share <F2> $0.05 $0.05 $0.05 $0.045 $0.045
Average shares outstanding
(in thousands):<F2>
Basic 252,860 252,860 252,692 252,112 252,186
Diluted 253,095 253,058 253,185 252,466 252,760
Assets under management (in millions):
End of period $236,574 $241,964 $220,989 $225,952 $208,811
Simple monthly average for
period. $240,513 $229,409 $220,606 $216,928 $198,174
- -------------
<F1> Prior period amounts have been restated to reflect the reclassification of
distribution component of Canadian investment management fee income.
<F2> All prior period amounts have been restated to reflect a two-for-one
stock split paid on January 15, 1998.
</TABLE>
ASSETS UNDER MANAGEMENT
(In billions) 30-Jun-98 31-Mar-98 31-Dec-97 30-Sep-97 30-Jun-97
- ----------------------------------------------------------------------------
Franklin Templeton Group:
Equity:
Global/international $106.6 $112.8 $99.2 $109.2 $99.0
Domestic (U.S.) 57.1 57.3 51.6 48.2 43.1
- --------------------------------------------------------------------------------
163.7 170.1 150.8 157.4 142.1
- --------------------------------------------------------------------------------
Fixed income:
Tax-free 49.1 48.1 47.0 45.8 44.4
Taxable:
Domestic (primarily
US Govt.) 15.7 15.7 15.5 15.1 15.1
Global/international 4.1 4.1 3.8 4.0 3.5
- -------------------------------------------------------------------------------
68.9 67.9 66.3 64.9 63.0
- -------------------------------------------------------------------------------
Money funds 4.0 4.0 3.9 3.7 3.7
===============================================================================
Total Franklin
Templeton Group $236.6 $242.0 $221.0 $226.0 $208.8
===============================================================================
