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): January 21, 1999
(January 21, 1999)
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 January 21, 1999 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: January 21, 1999 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
<PAGE>
Exhibits
A. Press Release issued on January 21, 1999 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 First Quarter Results
San Mateo, CA, January 21, 1999-- Franklin Resources, Inc. (NYSE:BEN) today
reported net income of $68.5 million for the first fiscal quarter of 1999 (after
pretax restructuring charges of $46.1 million) compared with net income of
$130.5 million in the comparable quarter ended December 31, 1997. Restructuring
charges of approximately $58 million were announced on January 14, 1999 with the
remaining charge to be taken in the second quarter of this fiscal year.
Operating revenues for the quarter were $567.7 million compared to $598.6
million for the preceding quarter and $632.4 million a year ago.
Assets under management by the Company's subsidiaries were $220.2 billion,
compared to $208.6 billion in the preceding quarter and $221.0 billion at this
time last year. Quarterly average assets under management during the current
quarter were $217.0 billion compared to $221.6 billion in the preceding quarter
and $220.6 billion in the same quarter a year ago.
Diluted earnings per share for the quarter ended December 31, 1998 were
$0.27 after the restructuring charge as compared to $0.44 for the preceding
quarter and $0.52 a year ago. Had the Company not taken the restructuring charge
in the first fiscal quarter 1999, diluted earnings per share would have been
approximately $0.40. Average diluted shares outstanding for the current and
preceding quarters were 252.1 million and 252.7 million, respectively, compared
to 253.2 million for the same quarter a year ago.
Franklin Resources, Inc. provides global and domestic investment
management, shareholder and distribution services to the Franklin Templeton
mutual funds and institutional accounts in over 100 different nations worldwide.
Franklin's headquarters are located at 777 Mariners Island Blvd., San Mateo, CA.
<PAGE>
Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands except
assets under management and per share
data)
Three Months Ended
December 31
-----------------------------
1998 1997
Operating revenues:
Investment management fees <F1> $330,370 $348,562
Underwriting and distribution fees <F1> 188,604 243,188
Shareholder servicing fees 45,734 37,606
Other 2,971 3,043
-----------------------------
Total operating revenues 567,679 632,399
-----------------------------
Operating expenses:
Underwriting and distribution 163,046 205,312
Compensation and benefits 133,814 133,291
Information systems, technology and
occupancy 48,479 46,596
Advertising and promotion 28,238 27,362
Amortization of deferred sales
commissions 25,019 23,896
Amortization of intangible assets 9,373 8,995
Other 22,805 19,505
Restructuring 46,140 -
charges
-----------------------------
Total operating expenses 476,914 464,957
-----------------------------
Operating income 90,765 167,442
-----------------------------
Other income
(expense):
Investment and other income 10,536 14,975
Interest expense (6,173) (6,152)
-----------------------------
Other income, net 4,363 8,823
-----------------------------
Income before taxes on income 95,128 176,265
Taxes on income 26,636 45,750
-----------------------------
Net income $68,492 $130,515
=============================
Earnings per share:
$0.27 $0.52
Basic
$0.27 $0.52
Diluted
Dividends per share $0.055 $0.05
Average shares outstanding (in thousands):
251,860 252,692
Basic
252,055 253,185
Diluted
Assets under management (in millions):
End of period $220,236 $220,989
Simple monthly average for period $216,959 $220,606
<F1> Prior period amounts have been restated to reflect the reclassification of
distribution component of Canadian investment management fee income.
<TABLE>
<CAPTION>
Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands except assets
under management and per share data.) Three months ended
---------------------
31-Dec-98 30-Sep-98 30-Jun-98 31-Mar-98 31-Dec--97
--------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Operating revenues:
Investment management fees <F1> $330,370 $339,651 $373,820 $351,240 $348,562
Underwriting and distribution fees <F1> 188,604 208,483 252,354 278,622 243,188
Shareholder servicing fees 45,734 42,762 40,793 39,399 37,606
Other 2,971 7,690 5,629 4,430 3,043
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Total operating revenues 567,679 598,586 672,596 673,691 632,399
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Operating expenses:
Underwriting and distribution 163,046 173,328 220,660 242,406 205,312
Compensation and benefits 133,814 134,362 152,688 132,744 133,291
Information systems, technology and
occupancy 48,479 51,895 37,312 45,862 46,596
Advertising and promotion 28,238 33,538 33,782 31,243 27,362
Amortization of deferred sales commissions 25,019 27,231 27,753 26,525 23,896
Amortization of intangible assets 9,373 9,577 9,336 8,949 8,995
Other 22,805 25,644 22,846 22,538 19,505
Restructuring charge 46,140 - - - -
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Total operating expenses 476,914 455,575 504,377 510,267 464,957
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Operating income 90,765 143,011 168,219 163,424 167,442
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Other income (expense):
Investment and other income 10,536 14,717 15,435 11,596 14,975
Interest expense (6,173) (6,034) (6,523) (3,826) (6,152)
--------------------------------------------------------------
Other income (expense), net 4,363 8,683 8,912 7,770 8,823
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Income before taxes on income 95,128 151,694 177,131 171,194 176,265
Taxes on income 26,636 39,441 46,118 44,525 45,750
--------------------------------------------------------------
Net income $68,492 $112,253 $131,013 $126,669 $130,515
================================================================
Earnings per share:
Basic $0.27 $0.44 $0.52 $0.50 $0.52
Diluted $0.27 $0.44 $0.52 $0.50 $0.52
Dividends per share $0.055 $0.05 $0.05 $0.05 $0.05
Average shares outstanding (in thousands):
Basic 251,860 252,579 252,860 252,860 252,692
Diluted 252,055 252,707 253,095 253,058 253,185
Assets under management (in millions):
End of period $220,236 $208,591 $236,574 $241,964 $220,989
Simple monthly average for period $216,959 $221,633 $240,513 $229,409 $220,606
<F1> Prior period amounts have been restated to reflect the reclassification of
distribution component of Canadian investment management fee income.
</TABLE>
<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT
(In billions) 31-Dec-98 30-Sep-98 30-Jun-98 31-Mar-98 31-Dec-97
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Franklin Templeton Group:
Equity:
Global/international $92.8 $84.8 $105.4 $111.7 $98.3
Domestic (U.S.) 37.4 34.8 43.0 42.9 37.6
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Total Equity 130.2 119.6 148.4 154.6 135.9
------------------------------------------------------------------
Hybrid funds <F1> 14.5 14.0 15.3 15.5 14.9
Fixed income:
Tax-free 50.9 50.5 49.1 48.1 47.0
Taxable:
Domestic (primarily US Govt.) 16.0 16.0 15.7 15.7 15.5
Global/international 4.0 3.7 4.1 4.1 3.8
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Total Fixed Income 70.9 70.2 68.9 67.9 66.3
------------------------------------------------------------------
Money funds 4.6 4.8 4.0 4.0 3.9
==================================================================
Total Franklin Templeton Group $220.2 $208.6 $236.6 $242.0 $221.0
==================================================================
<F1> 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>
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Forward-Looking Statements and Risk Factors: When used in this press release and
in oral statements made with the approval of an authorized executive officer,
the words or phrases "will likely result", "expects to", "will continue", "will
incur", "will improve", "will implement", "will allow", "will be taken", "we
believe", "is anticipated", "estimate", "project" or variations of such
expressions or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical earnings and
those presently anticipated or projected. Risks include changes in: the
Company's ability to achieve projected restructuring initiative and annual cost
savings and operating efficiencies; the level of assets under management;
general economic and market conditions (both domestic and global); estimated
earnings, changes in interest rates and/or inflation rates; the level of fund
sales and redemptions; competition within the financial services industry; and
the other risks detailed from time to time in the Company's Securities and
Exchange Commission reports, including, but not limited to, the Annual Report on
Form 10-K for the year ended September 30, 1998.
The Company will not undertake and specifically declines any obligation to
release publicly any data or information, the result of which, might be to
revise any forward-looking statements to reflect events or circumstances after
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
