SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): May 8, 2000
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LEGG MASON, INC.
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(Exact Name of Registrant as Specified in its Charter)
Maryland 1-8529 52-1200960
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
100 Light Street, Baltimore, Maryland 21202
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 539-0000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On May 8, 2000, Legg Mason, Inc. issued a press release regarding its
financial results for its fourth quarter and fiscal year ended March 31, 2000. A
copy of the press release is attached hereto as Exhibit 99 and is incorporated
herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
99 Press Release of Legg Mason, Inc. dated May 8, 2000.
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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.
LEGG MASON, INC.
Date: May 9, 2000 By: /s/ F. Barry Bilson
F. Barry Bilson
Senior Vice President
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EXHIBIT INDEX
Exhibit
99 Press Release of Legg Mason, Inc. dated May 8, 2000
<PAGE>
EXHIBIT 99
For immediate release For information contact:
F. Barry Bilson
(410) 539-0000
http://www.leggmason.com
LEGG MASON'S QUARTER, YEAR EARNINGS UP SHARPLY
Quarter EPS Up 81% to $.78; Year EPS Up 50% to $2.33
Pre-Tax Margin and ROE Also Records
Baltimore, Maryland -- May 8, 2000 -- Legg Mason, Inc. (NYSE: LM) announced
today that its net earnings for its fourth quarter ended March 31, 2000
increased by 94% over the corresponding quarter of 1999, to $48.0 million,
driven primarily by a 47% increase in commissions and a 50% increase in
principal transactions. These results helped the firm record a 60% increase in
net earnings for the year and the highest pre-tax margin and return on equity
since it became a public company in August 1983.
Overall, record revenues in the firm's asset management area and throughout its
securities brokerage business established new corporate records for the year
ended March 31, 2000. Total revenues, net revenues, pre-tax income, net earnings
and earnings per share all established a new record. Total revenues rose 31% to
$1.4 billion, while net revenues grew to $1.2 billion, up 30%. Investment
advisory and related fees were up 37%, to $534.9 million, while the combined
revenues of our securities brokerage business were up 31%. Net earnings for the
year jumped 60%, to $142.5 million, and diluted earnings per share climbed 50%
to $2.33. The firm's pre-tax margin and return on equity for the year were also
records: pre-tax earnings were 19.3% of net revenues versus 15.6% in fiscal 1999
and return on equity was 21.8% versus 17.0% in fiscal 1999.
Total revenues for the quarter were a record $411.9 million, up 42% from a year
ago, while net revenues were a record $370.6 million, up 40%. The contribution
of the firm's overall securities brokerage business was particularly strong
during the quarter, supported by a 47% increase in commission revenues, to
$114.6 million, and a 50% increase in both principal transactions and net
interest, to $39.6 million and $25.3 million, respectively, all new records.
Revenues from investment advisory activities also remained strong, increasing by
34% to a record $149.0 million.
Net earnings for the quarter were up 94% from the year ago quarter, to $48.0
million, and diluted earnings per share increased by 81% to $0.78. Pre-tax
earnings were 21.8% of net revenues for the quarter, up from a 15.1% pre-tax
margin in the corresponding quarter a year ago, and return on equity was 26.7%
versus 18.2%.
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LEGG MASON, INC.
News Release - May 8, 2000
Page 2
The firm also announced that its assets under management increased to $112
billion -- the 35th consecutive quarterly increase in such assets -- up 26% from
$89 billion a year ago and up 7% from the last quarter. New clients plus net
inflows from existing clients accounted for approximately 73% of the increase
over the last year, while market appreciation accounted for 17% of the increase.
New clients plus net inflows from existing clients also accounted for 73% of the
increase in managed assets during the quarter, with the remaining 27% resulting
from market appreciation.
As of March 31, 2000, stockholders' equity was $752 million, up 36% from a year
ago, and book value per share was $12.83, up 27%.
Commenting on Legg Mason's operating results, chairman and CEO Raymond
A. "Chip" Mason, said:
"In both the quarter and fiscal year, our private client
business, which includes securities brokerage, principal
transactions and net interest profit, had outstanding results and
was a significant contributor to our record performance. Revenues
from investment advisory activities remained strong as we continue
to build our asset management business, primarily through internal
growth and also through selected acquisitions.
Legg Mason continues to maintain a strong financial condition and I
am pleased to report that equity capital surpassed $750 million at
March 31, 2000."
Legg Mason, Inc., headquartered in Baltimore, is a holding company that provides
investment advisory, securities brokerage, investment banking and related
financial services through its wholly owned subsidiaries. The Company's common
stock is listed on the New York Stock Exchange (symbol: LM).
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LEGG MASON, INC.
News Release - May 8, 2000
Page 3
<TABLE>
<CAPTION>
LEGG MASON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the Quarters Ended March 31, 2000 and 1999
($ in 000's, except per share amounts)
<S> <C> <C> <C> <C>
% of net % of net
2000 Revenues 1999 Revenues
------------ -------------- ---------------- --------------
Revenues:
Investment advisory and related fees $ 149,006 40.2 $ 111,106 41.9
Commissions 114,637 30.9 78,007 29.4
Principal transactions 39,631 10.7 26,482 10.0
Investment banking 21,578 5.8 18,878 7.1
Interest 66,542 18.0 40,905 15.4
Other 20,464 5.5 13,768 5.2
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Total revenues 411,858 111.1 289,146 109.0
Interest expense 41,221 11.1 23,981 9.0
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Net revenues 370,637 100.0 265,165 100.0
Non-interest expenses:
Compensation and benefits 210,354 56.8 162,578 61.3
Occupancy and equipment rental 22,187 6.0 16,951 6.4
Communications 14,840 4.0 12,502 4.7
Floor brokerage and clearing fees 2,032 0.5 1,763 0.6
Non-cash deferred compensation - - 3,110 1.2
Other 40,337 10.9 28,302 10.7
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289,750 78.2 225,206 84.9
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Earnings Before Income Taxes 80,887 21.8 39,959 15.1
Income tax provision 32,846 8.8 15,168 5.8
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Net Earnings $ 48,041 13.0 $ 24,791 9.3
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Earnings per common share:
Basic $ 0.83 $ 0.45
Diluted $ 0.78 $ 0.43
Weighted average number of common shares
outstanding:
Basic 57,540 54,797
Diluted 61,274 57,963
</TABLE>
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LEGG MASON, INC.
News Release - May 8, 2000
Page 4
<TABLE>
<CAPTION>
LEGG MASON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the Fiscal Years Ended March 31, 2000 and 1999
($ in 000's, except per share amounts)
<S> <C> <C> <C> <C>
% of net % of net
2000 Revenues 1999 Revenues
------------ -------------- ------------- -----------
Revenues:
Investment advisory and related fees $ 534,896 43.3 $ 390,216 41.0
Commissions 362,887 29.4 279,136 29.3
Principal transactions 126,267 10.2 94,105 9.9
Investment banking 68,905 5.6 76,118 8.0
Interest 222,901 18.0 160,292 16.9
Other 54,948 4.4 46,139 4.9
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Total revenues 1,370,804 110.9 1,046,006 110.0
Interest expense 134,322 10.9 94,910 10.0
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Net revenues 1,236,482 100.0 951,096 100.0
Non-interest expenses:
Compensation and benefits 743,867 60.2 584,830 61.5
Occupancy and equipment rental 80,602 6.5 64,289 6.8
Communications 54,440 4.4 47,963 5.0
Floor brokerage and clearing fees 7,828 0.6 6,677 0.7
Non-cash deferred compensation (1,063) (0.1) 10,352 1.1
Other 111,667 9.1 88,210 9.3
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997,341 80.7 802,321 84.4
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Earnings Before Income Taxes 239,141 19.3 148,775 15.6
Income tax provision 96,616 7.8 59,441 6.2
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Net Earnings $ 142,525 11.5 $ 89,334 9.4
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Earnings per common share:
Basic $ 2.51 $ 1.64
Diluted $ 2.33 $ 1.55
Weighted average number of common shares
outstanding:
Basic 56,688 54,337
Diluted 60,787 57,657
Book value per common share $ 12.83 $ 10.08
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