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 22, 1999
(April 22, 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)
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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 22, 1999 by Franklin Resources,
Inc.
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 22, 1999 /s/ Leslie M. Kratter
----------------------
LESLIE M. KRATTER
Vice President
Exhibits
A. Press Release issued on April 22, 1999 by Franklin Resources, Inc.
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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 Second Quarter Results
San Mateo, CA, April 22, 1999-- Franklin Resources, Inc. (NYSE: BEN) today
reported net income of $102.5 million, or $0.41 per share diluted, including the
final installment of restructuring charges announced in January 1999, on
revenues of $554.1 million for the quarter ended March 31, 1999. Had the Company
not taken pretax restructuring charges of $12.3 million during the quarter,
diluted per share earnings would have been approximately $0.44. Net income for
the quarter ended March 31, 1998 was $126.7 million, or $0.50 per share diluted,
on revenues of $673.7 million.
Net income for the six months ended March 31, 1999 was $171.0 million, or
$0.68 per share diluted, on revenues of $1,121.8 million. These results included
pretax restructuring charges of $58.5 million. Had the Company not taken these
charges, diluted per share earnings would have been approximately $0.85 during
this period. Net income for the six months ended March 31, 1998 was $257.2
million, or $1.02 per share diluted, on revenues of $1,306.1 million.
Assets under management by the Company's subsidiaries were $216.0 billion,
compared to $220.2 billion in the preceding quarter and $242.0 billion at this
time last year. Quarterly average assets under management during the current
quarter were $216.4 billion compared to $217.0 billion in the preceding quarter
and $229.4 billion in 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.
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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
-------------------------------------------
1999 1998 1999 1998
Operating revenues:
Investment management fees <F1> $322,419 $351,240 $652,789 $699,802
Underwriting and distribution 178,406 278,622 367,010 521,810
fees <F1>
Shareholder servicing fees 47,762 39,399 93,496 77,005
Other 5,484 4,430 8,455 7,473
-------------------------------------------
Total operating revenues 554,071 673,691 1,121,750 1,306,090
-------------------------------------------
Operating expenses:
Underwriting and distribution 153,300 242,406 316,346 447,718
Compensation and benefits 128,816 132,744 262,630 266,035
Information systems, technology 52,111 45,862 100,590 92,458
and occupancy
Advertising and promotion 25,393 31,243 53,631 58,605
Amortization of deferred sales
commissions 22,963 26,525 47,982 50,421
Amortization of intangible assets 9,283 8,949 18,656 17,944
Other 18,770 22,538 41,575 42,043
Restructuring charges 12,315 - 58,455 -
-------------------------------------------
Total operating expenses 422,951 510,267 899,865 975,224
-------------------------------------------
Operating income 131,120 163,424 221,885 330,866
-------------------------------------------
Other income (expense):
Investment and other income 14,490 11,596 25,026 $26,571
Interest expense (4,776) (3,826) (10,949) (9,978)
-----------------------------------------
Other income (expense), net 9,714 7,770 14,077 16,593
-------------------------------------------
Income before taxes on income 140,834 171,194 235,962 347,459
Taxes on income 38,363 44,525 64,999 90,275
-------------------------------------------
Net income $102,471 $ 126,669 170,963 $257,184
===========================================
Earnings per share:
Basic $0.41 $0.50 $0.68 $1.02
Diluted $0.41 $0.50 $0.68 $1.02
Dividends per share $0.055 $0.05 $0.11 $0.10
Average shares outstanding (in
thousands)
Basic 252,189 252,860 252,025 252,682
Diluted 252,579 253,058 252,804 253,181
Assets under management (in millions):
End of period $215,960 $241,964 $215,960 $241,964
Simple monthly average for
period $216,439 $229,409 $216,194 $225,581
<F1> Prior period amounts have been restated to reflect the
reclassification of distribution component of Canadian investment
management fee income.
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<TABLE>
<CAPTION>
Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands except assets
under management and per share data.) Three months ended
31-Mar-99 31-Dec-98 30-Sep-98 30-Jun-98 31-Mar-98
<S> <C> <C> <C> <C> <C>
Operating revenues:
Investment management fees <F1> $322,419 $330,370 $339,651 $373,820 $351,240
Underwriting and distribution fees <F1> 178,406 188,604 208,483 252,354 278,622
Shareholder servicing fees 47,762 45,734 42,762 40,793 39,399
Other 5,484 2,971 7,690 5,629 4,430
----------------------------------------------------------------
Total operating revenues 554,071 567,679 598,586 672,596 673,691
----------------------------------------------------------------
Operating expenses:
Underwriting and distribution 153,300 163,046 173,328 220,660 242,406
Compensation and benefits 128,816 133,814 134,362 152,688 132,744
Information systems, technology and
occupancy 52,111 48,479 51,895 37,312 45,862
Advertising and promotion 25,393 28,238 33,538 33,782 31,243
Amortization of deferred sales commissions 22,963 25,019 27,231 27,753 26,525
Amortization of intangible assets 9,283 9,373 9,577 9,336 8,949
Other 18,770 22,805 25,644 22,846 22,538
Restructuring charges 12,315 46,140 - - -
----------------------------------------------------------------
Total operating expenses 422,951 476,914 455,575 504,377 510,267
----------------------------------------------------------------
Operating income 131,120 90,765 143,011 168,219 163,424
----------------------------------------------------------------
Other income (expense):
Investment and other income 14,490 10,536 14,717 15,435 11,596
Interest expense (4,776) (6,173) (6,034) (6,523) (3,826)
----------------------------------------------------------------
Other income (expense), net 9,714 4,363 8,683 8,912 7,770
----------------------------------------------------------------
Income before taxes on income 140,834 95,128 151,694 177,131 171,194
Taxes on income 38,363 26,636 39,441 46,118 44,525
---------------------------------------------------------------
Net income $102,471 $68,492 $112,253 $131,013 $126,669
================================================================
Earnings per share:
Basic $0.41 $0.27 $0.44 $0.52 $0.50
Diluted $0.41 $0.27 $0.44 $0.52 $0.50
Dividends per share $0.055 $0.055 $0.05 $0.05 $0.05
Average shares outstanding (in thousands):
Basic 252,189 251,860 252,579 252,860 252,860
Diluted 252,579 252,055 252,707 253,095 253,058
Assets under management (in millions):
End of period $215,960 $220,236 $208,591 $236,574 $241,964
Simple monthly average for period $216,439 $216,959 $221,633 $240,513 $229,409
<F1> Prior period amounts have been restated to reflect the reclassification
of distribution component of Canadian investment management fee income.
</TABLE>
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<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT
(In billions) 31-Mar-99 31-Dec-98 30-Sep-98 30-Jun-98 31-Mar-98
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Franklin Templeton Group:
Equity:
Global/international $91.4 $92.8 $84.8 $105.4 $111.7
Domestic (U.S.) 37.4 40.4 37.6 45.9 45.9
------------------------------------------------------------------
Total Equity 128.8 133.2 122.4 151.3 157.6
------------------------------------------------------------------
Hybrid funds <F1> 10.7 11.5 11.2 12.4 12.5
Fixed income:
Tax-free 51.6 50.9 50.5 49.1 48.1
Taxable:
Domestic (primarily US Govt.) 16.1 16.0 16.0 15.7 15.7
Global/international 4.0 4.0 3.7 4.1 4.1
------------------------------------------------------------------
Total Fixed Income 71.7 70.9 70.2 68.9 67.9
------------------------------------------------------------------
Money funds 4.8 4.6 4.8 4.0 4.0
==================================================================
Total Franklin Templeton Group $216.0 $220.2 $208.6 $236.6 $242.0
==================================================================
<F1> Hybrid funds include asset allocation, balanced, flexible and income-mixed
funds as defined by the Investment Company Institute. Periods prior to
March 31, 1999 have been restated to reflect the reclassification of
certain funds to Domestic Equity from the Hybrid category.
</TABLE>
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