Interpublic Announces Third Quarter and Nine Months 2009 Results
- Global economic downturn continues to impact top line revenue, leading to 14.2% organic revenue decrease for the third quarter of 2009 and 11.8% organic decrease year-to-date
- Organic decrease in operating expenses, excluding severance, was 12.5% for the third quarter of 2009 and 10.2% year-to-date
Summary
-
Revenue
-
Third quarter 2009 revenue of
$1.43 billion , compared to$1.74 billion in the third quarter of 2008, with an organic revenue decrease of 14.2% compared to the prior period. -
Nine months 2009 revenue of
$4.23 billion , compared to$5.06 billion in 2008, with an organic revenue decrease of 11.8% compared to the prior period.
-
Third quarter 2009 revenue of
-
Operating Results
-
Operating income in the third quarter of 2009 was
$58.3 million , compared to operating income of$116.3 million in 2008. For the first nine months of 2009, operating income was$73.3 million , compared to operating income of$259.1 million in 2008. -
Severance charges recorded in the third quarter of 2009 were
$23.4 million , compared to$15.3 million in 2008. For the first nine months of 2009, severance charges recorded were$94.9 million , compared to$39.9 million in 2008. -
Operating margin was 4.1% and 1.7% for the three and nine months
ended
September 30, 2009 , respectively, compared to 6.7% and 5.1% for the three and nine months endedSeptember 30, 2008 , respectively.
-
Operating income in the third quarter of 2009 was
-
Net Results
-
Third quarter 2009 net income attributable to IPG was
$24.1 million and net income available to IPG common stockholders was$17.2 million , or$0.04 per basic and$0.03 per diluted share. This compares to net income attributable to IPG a year ago of$45.7 million and net income available to IPG common stockholders of$38.7 million , or$0.08 per basic and diluted share. -
Year-to-date 2009 net loss attributable to IPG was
$15.1 million and net loss available to IPG common stockholders was$35.8 million , or($0.08) per basic and diluted share. This compares to net income attributable to IPG a year ago of$78.0 million and net income available to IPG common stockholders of$56.7 million , or$0.12 per basic and diluted share.
-
Third quarter 2009 net income attributable to IPG was
“During the quarter, the economic downturn continued to weigh on our
results. Once again, we demonstrated the ability to effectively manage
costs in order to protect margins,” said
Operating Results
Revenue
Revenue of
For the first nine months of 2009, revenue was
Operating Expenses
During the third quarter of 2009, salaries and related expenses were
Over the past twelve months, the company incurred approximately
During the third quarter of 2009, office and general expenses were
Non-Operating and Tax
Net cash interest expense increased
Other income (expense), net was
The income tax provision in the third quarter of 2009 was
Balance Sheet
At
For more information concerning the company’s financial results, please refer to the accompanying slide presentation available on our website, www.interpublic.com.
About Interpublic
Interpublic is one of the world's leading organizations of advertising
agencies and marketing services companies. Major global brands include
Draftfcb, FutureBrand,
Cautionary Statement
This release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under Item 1A, Risk Factors, in our most recent annual report on Form 10-K. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:
- potential effects of a challenging economy, for example, on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition;
- our ability to attract new clients and retain existing clients;
- our ability to retain and attract key employees;
- risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy.
- potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;
- risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; and
- developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world.
Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent annual report on Form 10-K.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2009 AND 2008 (Amounts in Millions except Per Share Data) (UNAUDITED) |
|||||||||||||||
Three Months Ended September 30, | |||||||||||||||
2009 | 2008 |
Fav. (Unfav.) % Variance |
|||||||||||||
Revenue: | |||||||||||||||
United States | $ | 834.1 | $ | 963.8 | (13.5 | )% | |||||||||
International | 592.6 | 776.2 | (23.7 | )% | |||||||||||
Total Revenue | 1,426.7 | 1,740.0 | (18.0 | )% | |||||||||||
Operating Expenses: | |||||||||||||||
Salaries and Related Expenses | 943.5 | 1,093.5 | 13.7 | % | |||||||||||
Office and General Expenses | 425.4 | 526.3 | 19.2 | % | |||||||||||
Restructuring and Other Reorganization-Related (Reversals) Charges | (0.5 | ) | 3.9 | N/A | |||||||||||
Total Operating Expenses | 1,368.4 | 1,623.7 | 15.7 | % | |||||||||||
Operating Income | 58.3 | 116.3 | (49.9 | )% | |||||||||||
Operating Margin % | 4.1 | % | 6.7 | % | |||||||||||
Expenses and Other Income: | |||||||||||||||
Interest Expense | (37.8 | ) | (53.2 | ) | |||||||||||
Interest Income | 7.6 | 23.3 | |||||||||||||
Other Income (Expense), Net | 1.0 | (1.0 | ) | ||||||||||||
Total (Expenses) and Other Income | (29.2 | ) | (30.9 | ) | |||||||||||
Income before Income Taxes | 29.1 | 85.4 | |||||||||||||
Provision for Income Taxes | 3.7 | 35.5 | |||||||||||||
Income of Consolidated Companies | 25.4 | 49.9 | |||||||||||||
Equity in Net Income of Unconsolidated Affiliates | 0.5 | 0.5 | |||||||||||||
Net Income | 25.9 | 50.4 | |||||||||||||
Net Income Attributable to Noncontrolling Interests 1 | (1.8 | ) | (4.7 | ) | |||||||||||
Net Income Attributable to IPG 1 | 24.1 | 45.7 | |||||||||||||
Dividends on Preferred Stock | (6.9 | ) | (6.9 | ) | |||||||||||
Allocation to Participating Securities | - | (0.1 | ) | ||||||||||||
Net Income Available to IPG Common Stockholders 1 | $ | 17.2 | $ | 38.7 | |||||||||||
Earnings Per Share Available to IPG Common Stockholders –
Basic |
$ | 0.04 | $ | 0.08 | |||||||||||
Diluted | $ | 0.03 | $ | 0.08 | |||||||||||
Weighted-Average Number of Common Shares Outstanding – Basic |
470.5 | 462.8 | |||||||||||||
Diluted | 513.8 | 519.4 |
1 Effective
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2009 AND 2008 (Amounts in Millions except Per Share Data) (UNAUDITED) |
|||||||||||||||
Nine Months Ended September 30, | |||||||||||||||
2009 | 2008 |
Fav. (Unfav.) % Variance |
|||||||||||||
Revenue: | |||||||||||||||
United States | $ | 2,462.6 | $ | 2,803.8 | (12.2 | )% | |||||||||
International | 1,763.8 | 2,257.1 | (21.9 | )% | |||||||||||
Total Revenue | 4,226.4 | 5,060.9 | (16.5 | )% | |||||||||||
Operating Expenses: | |||||||||||||||
Salaries and Related Expenses | 2,908.4 | 3,261.5 | 10.8 | % | |||||||||||
Office and General Expenses | 1,245.4 | 1,529.1 | 18.6 | % | |||||||||||
Restructuring and Other Reorganization-Related (Reversals) Charges | (0.7 | ) | 11.2 | N/A | |||||||||||
Total Operating Expenses | 4,153.1 | 4,801.8 | 13.5 | % | |||||||||||
Operating Income | 73.3 | 259.1 | (71.7 | )% | |||||||||||
Operating Margin % | 1.7 | % | 5.1 | % | |||||||||||
Expenses and Other Income: | |||||||||||||||
Interest Expense | (117.7 | ) | (163.9 | ) | |||||||||||
Interest Income | 28.0 | 75.0 | |||||||||||||
Other (Expense) Income, Net | (17.4 | ) | 3.9 | ||||||||||||
Total (Expenses) and Other Income | (107.1 | ) | (85.0 | ) | |||||||||||
(Loss) Income before Income Taxes | (33.8 | ) | 174.1 | ||||||||||||
(Benefit of) Provision for Income Taxes | (18.0 | ) | 90.9 | ||||||||||||
(Loss) Income of Consolidated Companies | (15.8 | ) | 83.2 | ||||||||||||
Equity in Net (Loss) Income of Unconsolidated Affiliates | (0.5 | ) | 2.1 | ||||||||||||
Net (Loss) Income | (16.3 | ) | 85.3 | ||||||||||||
Net Loss (Income) Attributable to Noncontrolling Interests 1 | 1.2 | (7.3 | ) | ||||||||||||
Net (Loss) Income Attributable to IPG 1 | (15.1 | ) | 78.0 | ||||||||||||
Dividends on Preferred Stock | (20.7 | ) | (20.7 | ) | |||||||||||
Allocation to Participating Securities | - | (0.6 | ) | ||||||||||||
Net (Loss) Income Available to IPG Common Stockholders 1 | $ | (35.8 | ) | $ | 56.7 | ||||||||||
(Loss) Earnings Per Share Available to IPG Common Stockholders –
Basic and Diluted |
$ | (0.08 | ) | $ | 0.12 | ||||||||||
Weighted-Average Number of Common Shares Outstanding – Basic |
467.3 | 460.8 | |||||||||||||
Diluted | 467.3 | 499.9 |
1 Effective
Source: Interpublic
Interpublic
Philippe Krakowsky, 212-704-1328
or
Analysts,
Investors:
Jerry Leshne, 212-704-1439