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 14, 1999
(January 14, 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
-------------------------------------------------
(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 press release. By
this filing, Registrant is not establishing the practice of filing all 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 14, 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 14, 1999 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
<PAGE>
Exhibits
A. Press Release issued on January 14, 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 Inc. Announces Restructuring Charge
San Mateo, CA, January 14, 1999 -- Franklin Resources, Inc. (NYSE: BEN)
today said that it will take a one-time restructuring charge of approximately
$58 million, about 80% of which will be taken in the first fiscal quarter.
Efficiencies achieved through operational and systems consolidation are part of
a larger initiative within the Company to create a lower cost operating
environment while constantly improving customer service and focusing the
Company's resources on those activities which enhance shareholder value. Before
the charge, the Company expects first fiscal quarter 1999 earnings per share in
the range of $0.39 to $0.42.
"We are beginning to realize the operational benefits of the completion of
the largest shareholder record keeping system conversion in U.S. mutual fund
history in September 1998. We believe the efficiencies that come from
integrating such aspects of our business will improve service to our clients,"
explained Charles B. Johnson, president and CEO. "While an uncertain market may
overshadow the impact of some of our restructuring initiatives in the
short-term, the implementation of various operating efficiencies and the
selective refocusing of business units will allow us to strengthen our
foundation for future growth in addition to maintaining a commitment to building
long-term shareholder value."
As a result of these restructuring efforts, the Company expects to achieve
annual operating expense savings exceeding $100 million at the completion of
these efforts assuming a continuation of the current business environment. In
today's market conditions, earnings for the balance of the fiscal year are
expected to be comparable to pre-charge first fiscal quarter levels; results are
also dependent upon world market conditions. The restructuring involves
personnel reductions, improved operational efficiencies and revised priorities
surrounding business initiatives. Approximately 560 positions will be eliminated
from the consolidation of regional processing centers and refocused business
units, representing a net reduction of approximately 7% of Franklin's 8,350
employees as of December 31, 1998. Positions being eliminated are primarily in
operational areas and are located principally in the United States. Investment
management areas remain unaffected by these personnel reductions.
"We believe that the announced changes will allow Franklin Resources, Inc.
to respond effectively to the growing challenges faced by the increasingly
competitive investment management industry. In terms of the immediate
environment, we will continue to focus on a seamless integration of all
operational activities directly resulting in improved service. It is important
to note that our recent efforts to lower the Company's expense base while
allocating resources to activities that best serve our clients is not a
short-term effort but rather a permanent way of thinking," Johnson added. "These
efforts, however, will not come at the expense of our investment performance or
our commitment to providing superior service to our clients both domestically
and abroad." Month-end assets under management by the Company's subsidiaries
were $220.2 billion for the month ended December 31, 1998, compared to $222.6
billion for the preceding month and $221.0 billion for the same month a year
ago.
ASSETS UNDER MANAGEMENT
(In billions) 31-Dec-98 31-Dec-97
-----------------------------------------------------------------------------
Franklin Templeton Group:
Equity:
Global/international <F1> $ 92.8 $ 98.3
Domestic (U.S.) 37.4 37.6
-----------------------------------------------------------------------------
130.2 135.9
-----------------------------------------------------------------------------
Hybrid funds <F2> 14.5 14.9
Fixed income:
Tax-free 50.9 47.0
Taxable:
Domestic (primarily US Govt.) 16.0 15.5
Global/international <F1> 4.0 3.8
-----------------------------------------------------------------------------
70.9 66.3
-----------------------------------------------------------------------------
Money funds 4.6 3.9
============================================================================
Total Franklin Templeton $ 220.2 $ 221.0
Group
============================================================================
<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.
It is anticipated that full results for the quarter ended December 31, 1998
will be announced on January 21, 1999 before the opening of the New York Stock
Exchange.
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.
- ------------------------------
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.
# # #
