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): April 21, 1998
(April 21, 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)
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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 April 21, 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: April 21, 1998 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
<PAGE>
Exhibits
A. Press Release issued on April 21, 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 Second Quarter Results
San Mateo, CA, April 21, 1998 -- Franklin Resources, Inc. (NYSE:BEN) today
reported net income of $126.7 million for the second fiscal quarter of 1998,
compared to $101.4 million a year ago and $130.5 million for the quarter ended
December 31, 1997. Operating revenues for the quarter were $673.7 million
compared to $519.2 million a year ago and $632.4 million for the preceding
quarter.
Assets under management by the Company's subsidiaries were $242.0 billion,
compared with $189.9 billion this time last year and $221.0 billion in the
preceding quarter. Quarterly average assets under management during the quarter
were $229.4 billion compared with $186.8 billion last year, and $220.6 billion
in the preceding quarter.<F1> While assets under management have reached an all
time high, the Company has experienced increased pressure on operating margins
as a result of major system conversions, Year 2000 efforts, and increased
advertising and promotional initiatives.
After adjusting prior periods for the two-for-one stock split paid on January
15, 1998 diluted earnings per share for the quarter ended March 31, 1998 were
$0.50 compared with $0.40 a year ago and $0.52 for the preceding quarter. <F2>
Average diluted shares outstanding for the quarter were 253.1 million as
compared to 253.0 million a year ago and 253.2 million for the previous
quarter.<F2>
Franklin Resources, Inc. provides global and domestic investment
management, shareholder and distribution services to the Franklin Templeton
mutual funds and institutional accounts, servicing over 8.2 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> Based on simple monthly average.
<F2> 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 Six months ended
March 31 March 31
-------------------------------------------
1998 1997 1998 1997
Operating revenues:
Investment management fees $ 380,948 $ 305,586 $ 757,411 $578,846
Underwriting and distribution fees 248,914 180,285 464,201 316,771
Shareholder servicing fees 39,399 28,797 77,005 53,625
Other 4,430 4,528 7,473 7,579
-------------------------------------------
Total operating revenues 673,691 519,196 1,306,090 956,821
-------------------------------------------
Operating expenses:
Underwriting and distribution 242,406 172,638 447,718 304,921
Compensation and benefits 132,744 106,783 266,035 206,354
Information systems, technology
and occupancy 45,862 29,395 92,458 55,199
Advertising and promotion 31,243 23,406 58,605 42,072
Amortization of deferred sales
commissions 26,525 11,530 50,421 22,166
Amortization of intangible assets 8,949 9,057 17,944 16,402
Other 22,538 22,363 42,043 40,134
---------------------------------------------
Total operating expenses 510,267 375,172 975,224 687,248
---------------------------------------------
Operating income 163,424 144,024 330,866 269,573
---------------------------------------------
Other income (expense):
Investment and other income 11,596 6,087 26,571 25,695
Interest expense (3,826) (5,756) (9,978) (13,929)
---------------------------------------------
Other income (expense), net 7,770 331 16,593 11,766
---------------------------------------------
Income before taxes on income 171,194 144,355 347,459 281,339
Taxes on income 44,525 42,944 90,275 83,699
----------------------------------------------
Net income $126,669 $ 101,411 $257,184 $ 197,640
===========================================
Earnings per share: <F1>
Basic $0.50 $0.40 $1.02 $0.79
Diluted $0.50 $0.40 $1.02 $0.78
Dividends per share <F1> $0.05 $0.04 $0.10 $0.08
Average shares outstanding
(in thousands): <F1>
Basic 252,860 252,278 252,682 251,612
Diluted 253,058 253,014 253,181 252,746
Assets under management
(in millions):
End of period $241,964 $189,901 $241,964 $189,901
Average for period <F2> $229,409 $186,759 $225,581 $176,505
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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.
<F2> Based on simple monthly average.
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<TABLE>
<CAPTION>
Consolidated Income Statements
(Dollar amounts in thousands
except assets
under management and per share Three months ended
data.)
31-Mar-98 31-Dec-97 30-Sep-97 30-Jun-97 31-Mar-97
<S> <C> <C> <C> <C> <C>
Operating revenues:
Investment management fees $380,948 $376,463 $375,676 $337,966 $305,586
Underwriting and distribution
fees 248,914 215,287 222,597 195,744 180,285
Shareholder servicing fees 39,399 37,606 34,666 36,614 28,797
Other 4,430 3,043 968 2,223 4,528
--------------------------------------------------------------
Total operating revenues 673,691 632,399 633,907 572,547 519,196
--------------------------------------------------------------
Operating expenses:
Underwriting and distribution 242,406 205,312 216,540 190,867 172,638
Compensation and benefits 132,744 133,291 125,339 115,476 106,783
Information systems and occupancy 45,862 46,596 48,720 31,474 29,395
Advertising and promotion 31,243 27,362 26,336 28,144 23,406
Amortization of deferred sales
commissions 26,525 23,896 18,526 18,773 11,530
Amortization of intangible assets 8,949 8,995 8,961 8,931 9,057
Other 22,538 19,505 22,823 23,657 22,363
------------------------------------------------------------
Total operating expenses 510,267 464,957 467,245 417,322 375,172
------------------------------------------------------------
Operating income 163,424 167,442 166,662 155,225 144,024
------------------------------------------------------------
Other income (expense):
Investment and other income 11,596 14,975 15,107 8,784 6,087
Interest expense (3,826) (6,152) (5,669) (5,735) (5,756)
------------------------------------------------------------
Other income (expense), net 7,770 8,823 9,438 3,049 331
------------------------------------------------------------
Income before taxes on income 171,194 176,265 176,100 158,274 144,355
Taxes on income 44,525 45,750 50,865 47,086 42,944
-----------------------------------------------------------
Net income $126,669 $130,515 $ 125,235 $ 111,188 $101,411
=============================================================
Earnings per share: <F1>
Basic $0.50 $0.52 $0.50 $0.44 $0.40
Diluted $0.50 $0.52 $0.50 $0.44 $0.40
Dividends per share <F1> $0.050 $0.050 $0.045 $0.045 $0.040
Average shares outstanding
(in thousands): <F1>
Basic 252,860 252,692 252,112 252,186 252,278
Diluted 253,058 253,185 252,466 252,760 253,014
Assets under management
(in millions):
End of period $241,964 $220,989 $225,952 $208,811 $189,901
Average for period <F2> $229,409 $220,606 $216,928 $198,174 $186,759
- --------------------------
<F1> All prior period amounts have been restated to reflect a two-for-one stock
split paid on January 15, 1998.
<F2> Based on simple monthly average.
</TABLE>
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<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT
(In billions) 31-Mar-98 31-Dec-97 30-Sep-97 30-Jun-97 31-Mar-97
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Franklin Templeton Group:
Equity:
Global/international $112.8 $99.2 $109.2 $99.0 $85.8
Domestic (U.S.) 57.3 51.6 48.2 43.1 38.6
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$170.1 150.8 157.4 142.1 124.4
- ------------------------------------------------------------------------------------------
Fixed income:
Tax-free 48.1 47.0 45.8 44.4 43.2
Taxable:
Domestic (primarily
US Govt.) 15.7 15.5 15.1 15.1 15.4
Global/international 4.1 3.8 4.0 3.5 3.1
- ------------------------------------------------------------------------------------------
67.9 66.3 64.9 63.0 61.7
- -----------------------------------------------------------------------------------------
Money funds 4.0 3.9 3.7 3.7 3.8
===========================================================================================
Total Franklin
Templeton Group $242.0 $221.0 $226.0 $208.8 $189.9
===========================================================================================
</TABLE>
