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): October 23, 1998
(October 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
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(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 October 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: October 23, 1998 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
<PAGE>
Exhibits
A. Press Release issued on October 23, 1998 by Franklin Resources, Inc.
<PAGE>
FROM: Franklin Resources, Inc.
Public Relations: Holly Gibson (650) 312-4701
Investor Relations: Bijan Modanlou (650) 525-8900
www.frk.com
For Immediate Release
Franklin Resources Announces Fiscal Year End Results
San Mateo, CA, October 23, 1998 -- Franklin Resources, Inc. (NYSE:BEN)
today reported net income of $500.5 million for the year ended September 30,
1998, a 15% increase from $434.1 million in fiscal 1997. Net income for the
final quarter of fiscal 1998 was $112.3 million, compared to $131.0 million for
the preceding quarter and $125.2 million for the same quarter a year ago.
Operating revenues for the quarter were $598.6 million compared to $672.6
million for the preceding quarter and $633.9 million a year ago.
Assets under management by the Company's subsidiaries were $208.6 billion,
compared to $236.6 billion in the preceding quarter and $226.0 billion at this
time last year. Quarterly average assets under management during the current
quarter were $221.6 billion compared to $240.5 billion in the preceding quarter
and $216.9 billion in the same quarter a year ago.
Diluted earnings per share for the quarter ended September 30, 1998 were
$0.44 compared to $0.52 for the preceding quarter and $0.50 a year ago after
adjustment for the two-for-one stock split paid on January 15, 1998. Diluted
earnings per share for the year ended September 30, 1998 were $1.98 compared
with $1.71 in fiscal 1997. Average diluted shares outstanding for the current
and preceding quarters were 252.7 million and 253.1 million, respectively,
compared to 252.5 million for the same quarter 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 close to 9 million
shareholders in over 100 different nations worldwide. Franklin's headquarters
are located at 777 Mariners Island Blvd., San Mateo, CA.
<F1> All prior period amounts have been restated to reflect a two-for-one stock
split paid on January 15, 1998.
<PAGE>
Consolidated Income
Statements
(Dollar amounts in thousands
except assets under management and per share data)
Three Months Ended Year ended
September 30 September 30
-------------------------------------------------
1998 1997 1998 1997
Operating revenues:
Investment management fees<F1> $339,651 $348,264 $1,413,273 $1,203,923
Underwriting and
distribution fees <F1> 208,483 250,009 982,647 823,677
Shareholder servicing fees 42,772 34,666 160,570 124,905
Banking/finance, net & other 7,690 968 20,792 10,770
-------------------------------------------------
Total operating revenues 598,596 633,907 2,577,282 2,163,275
-------------------------------------------------
Operating expenses:
Underwriting and distribution 173,328 216,540 841,706 712,328
Compensation and benefits 134,362 125,339 553,085 447,169
Information systems,
technology and occupancy 51,895 48,718 181,665 135,391
Advertising and promotion 33,538 26,336 125,925 96,552
Amortization of deferred
sales commissions 27,231 18,529 105,405 59,468
Amortization of intangible
assets 9,577 8,961 36,857 34,294
Other 25,654 22,822 90,543 86,613
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Total operating expenses 455,585 467,245 1,935,186 1,571,815
-------------------------------------------------
Operating income 143,011 166,662 642,096 591,460
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Other income
(expense):
Investment and other income 14,717 15,107 56,723 49,586
Interest expense (6,034) (5,669) (22,535) (25,333)
-------------------------------------------------
Other income (expense), net 8,683 9,438 34,188 24,253
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Income before taxes on income 151,694 176,100 676,284 615,713
Taxes on income 39,441 50,865 175,834 181,650
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Net income $112,253 $125,235 $500,450 $434,063
=================================================
Earnings per share:<F2>
Basic $0.44 $0.50 $1.98 $1.72
Diluted $0.44 $0.50 $1.98 $1.71
Dividends per share <F2> $0.05 $0.045 $0.20 $0.17
Average shares outstanding
(in thousands): <F2>
Basic 252,579 252,112 252,723 251,881
Diluted 252,707 252,466 252,941 253,466
Assets under management (in millions):
End of period $208,591 $225,952 $208,591 $225,952
Simple monthly average
for period $221,633 $216,928 $226,855 $192,028
<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.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Income Statements
(Dollar amounts in thousands except assets
under management and per share data.)
Three months ended
30-Sep-98 30-Jun-98 31-Mar-98 31-Dec--97 30-Sep-97
<S> <C> <C> <C> <C> <C>
Operating revenues:
Investment management fees <F1> $339,651 $373,820 $351,240 $348,562 $348,264
Underwriting and distribution fees <F1> 208,483 252,354 278,622 243,188 250,009
Shareholder servicing fees 42,772 40,793 39,399 37,606 34,666
Other 7,690 5,629 4,430 3,043 96
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Total operating revenues 598,596 672,596 673,691 632,399 633,907
---------------------------------------------------------------
Operating expenses:
Underwriting and distribution 173,328 220,660 242,406 205,312 216,540
Compensation and benefits 134,362 152,688 132,744 133,291 125,339
Information systems, technology and
occupancy 51,895 37,312 45,862 46,596 48,718
Advertising and promotion 33,538 33,782 31,243 27,362 26,336
Amortization of deferred sales commissions 27,231 27,753 26,525 23,896 18,529
Amortization of intangible assets 9,577 9,336 8,949 8,995 8,961
Other 25,654 22,846 22,538 19,505 22,822
---------------------------------------------------------------
Total operating expenses 455,585 504,377 510,267 464,957 467,245
---------------------------------------------------------------
Operating income 143,011 168,219 163,424 167,442 166,662
---------------------------------------------------------------
Other income (expense):
Investment and other income 14,717 15,435 11,596 14,975 15,107
Interest expense (6,034) (6,523) (3,826) (6,152) (5,669)
---------------------------------------------------------------
Other income (expense), net 8,683 8,912 7,770 8,823 9,438
---------------------------------------------------------------
Income before taxes on income 151,694 177,131 171,194 176,265 176,100
Taxes on income 39,441 46,118 44,525 45,750 50,865
---------------------------------------------------------------
Net income $112,253 $131,013 $126,669 $130,515 $125,235
===============================================================
Earnings per share: <F2>
Basic $0.44 $0.52 $0.50 $0.52 $0.50
Diluted $0.44 $0.52 $0.50 $0.52 $0.50
Dividends per share <F2> $0.05 $0.05 $0.05 $0.05 $0.045
Average shares outstanding (in thousands):<F2>
Basic 252,579 252,860 252,860 252,692 252,112
Diluted 252,707 253,095 253,058 253,185 252,466
Assets under management (in millions):
End of period $208,591 $236,574 $241,964 $220,989 $225,952
Simple monthly average for period $221,633 $240,513 $229,409 $220,606 $216,928
<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>
<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT
(In billions) 30-Sep-98 30-Jun-9 31-Mar-98 31-Dec-97 30-Sep-97
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Franklin Templeton Group:
Equity:
Global/international <F1> $84.8 $105.4 $111.7 $98.3 $107.3
Domestic (U.S.) 34.8 43.0 42.9 37.6 35.9
------------------------------------------------------
Total Equity 119.6 148.4 154.6 135.9 143.2
------------------------------------------------------
Hybrid funds <F2> 14.0 15.3 15.5 14.9 14.1
Fixed income:
Tax-free 50.5 49.1 48.1 47.0 45.8
Taxable:
Domestic (primarily 16.0 15.7 15.7 15.5 15.3
US Govt.)
Global/international <F1> 3.7 4.1 4.1 3.8 3.9
------------------------------------------------------
Total Fixed Income 70.2 68.9 67.9 66.3 65.0
------------------------------------------------------
Money funds 4.8 4.0 4.0 3.9 3.7
======================================================
Total Franklin Templeton Group $208.6 $236.6 $242.0 $221.0 $226.0
======================================================
<F1> Global funds invest in securities traded worldwide including U.S. securities.
<F2> Hybrid funds include asset allocation, balanced, flexible and income-mixed
funds as defined by the Investment Company Institute. Previously these funds had
been included primarily in the equity category.
</TABLE>
