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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current Report Pursuant to Section 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report Commission file number
July 27, 2000 1-6686
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THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1024020
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1271 Avenue of the Americas, New York, New York 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 399-8000
Item 5. Other Events.
A press release issued by The Interpublic Group of Companies, Inc.
("Interpublic") with respect to its results for the first half and second
quarter of 2000 is attached as Exhibits 99.1 incorporated herein by reference.
This document contains forward-looking statements. Statements that are not
historical facts, including statements about Interpublic's beliefs and
expectations, are forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore you should not place
undue reliance on them. Forward-looking statements speak only as of the date
they are made, and Interpublic undertakes no obligation to update publicly any
of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties.
Interpublic cautions you that 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, those associated with
the effect of national and regional economic conditions, the ability of
Interpublic to attract new clients and retain existing clients, the financial
success of the clients of Interpublic, and developments from changes in the
regulatory and legal environment for advertising companies around the world.
Exhibits.
99 Press Release dated July 26, 2000.
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.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
Date: July 27, 2000 By: /s/ Nicholas J. Camera
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Nicholas J. Camera
VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
Exhibit 99
FOR IMMEDIATE RELEASE
INTERPUBLIC GROUP REPORTS STRONG RESULTS FOR SECOND QUARTER 2000
--Net Income Up 15% to $171.9 Million --
-- EPS of $.56, Increases by 14% --
-- Worldwide Revenue Up 15%, with 13% Organic Growth --
--Operating Margin Increases to 20.7% --
--Revenue from Specialized Marketing and Communications Services Increases
to 47%of Worldwide Revenue --
[All discussions exclude the impact of restructuring and other merger related
costs taken in the first six months of 2000. The restructuring and its financial
impact are discussed in a separate section of this release.
Additionally, all prior data has been restated to reflect the aggregate effect
of NFO Worldwide, Inc. and several other acquisitions accounted for as poolings
of interests .]
New York, July 26, 2000 (NYSE:IPG) -- Philip H. Geier, Jr., Chairman of the
Board and Chief Executive Officer, reported that The Interpublic Group of
Companies, Inc. had net income for the second quarter of 2000 of $171.9 million,
an increase of 15% over the net income for the second quarter of 1999 of $150.0
million.
On a diluted basis, earnings per share for the second quarter of 2000 were
$0.56, versus $0.49 in the second quarter of 1999, an increase of 14%.
Worldwide revenue for the second quarter of 2000 was $1.4 billion, an increase
of $187 million or 15% over the same period in 1999. Revenue from domestic
operations increased 20%, and revenue from international operations increased
10% compared to the second quarter of 1999. Revenue from international
operations would have increased 16% excluding the effect of the strengthening of
the U.S. dollar. Exclusive of acquisitions, worldwide revenue on a constant
dollar basis increased 13% for the second quarter of 2000.
Income from operations for the second quarter of 2000 was $294 million, or 17%
over the same period in 1999. Amortization of goodwill was $21.8 million for the
second quarter of 2000 compared to $16.8 million for the second quarter of 1999.
Exclusive of acquisitions, foreign exchange fluctuations and amortization of
goodwill, income from operations increased 17% for the second quarter of 2000
compared to the second quarter of 1999.
Mr. Geier noted that the Company's financial condition continues to be
excellent. The Company's operating margin has increased to 20.7% of revenue,
compared to 20.4% for the second quarter of 1999. Strong revenue growth from new
business and continued cost containment efforts have resulted in this margin
improvement.
Net income for the first six months of 2000 was $230 million, an increase of 16%
over the net income for 1999. On a diluted basis, earnings per share was $0.75
in 2000 versus $0.66 in 1999, an increase of 14%.
Worldwide revenue for the first six months of 2000 was $2.6 billion, an increase
of 16% from the first six months of 1999. Revenue from domestic operations
increased 23%, and revenue from international operations increased 9.0%. Revenue
from international operations would have increased 14% excluding the effect of
the strengthening of the U.S. dollar. Exclusive of acquisitions, worldwide
revenue, on a constant dollar basis, increased 13% for the first six months of
2000.
Income from operations for the first six months of 2000 was $405 million, or 18%
over the same period in 1999. Amortization of goodwill was $43 million for the
first six months of 2000 compared to $31 million for the first six months of
1999. Exclusive of acquisitions, foreign exchange fluctuations and amortization
of goodwill, income from operations increased 18% for the first six months of
2000 compared to the first six months of 1999.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Restructuring and Other Merger Related Costs
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For the second quarter, the Company recognized a total of $52.8 million in
pre-tax restructuring and other merger related costs ($35.0 million after tax),
principally related to Lowe Lintas & Partners and the non-recurring NFO
transaction costs. As previously disclosed, the Company completed its
acquisition of NFO Worldwide Inc. on April 20, 2000.
Substantially all of the restructuring activities related to Lowe Lintas &
Partners Worldwide have been completed except for some real estate and other
actions which principally relate to Germany and which were taken after June 30,
2000. The Company recognized $38.4 million of pre-tax restructuring costs in the
second quarter of 2000. The Company expects the total pre-tax costs to complete
the restructuring of Lowe Lintas to be well within the range originally
forecasted.
Restructuring and other merger related costs in the second quarter of 2000
included non-recurring transaction costs (principally professional fees) related
to the recently completed merger with NFO.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Interpublic's agency systems gained net new business in the second quarter of
2000 of approximately $900 million compared with the second quarter of 1999 net
new business gains of $526 million, an increase of 71%. For the first six months
of 2000, net new business gains were approximately $1,602 million compared with
$1,127 million for the first six months of 1999, an increase of 42%.
For the second quarter of 2000, revenue from specialized marketing and
communications services comprised 47% of total worldwide revenue, compared to
44% in the second quarter of 1999. For the first six months of 2000, revenue
from specialized marketing and communication services comprised 47% of total
worldwide revenue, compared to 44% for the first six months of 1999, and is
expected to exceed 50% of total revenue for the last six months of 2000.
During the second quarter of 2000, in addition to NFO, the Company completed the
acquisition of substantial assets of the Communications Division of Caribiner
International, Inc. and several other smaller deals. With these recent
acquisitions, the Company now ranks in the top two among its peers in each of
its core disciplines and number one in the majority of these: advertising, media
buying, market research, relationship (direct) marketing, sales promotion,
public relations, sports and event marketing, healthcare marketing and
e-business consulting and communications.
The Interpublic Group of Companies, Inc. is one of the largest organizations of
advertising agencies and marketing service companies. Its companies include
McCann-Erickson WorldGroup, The Lowe Group, DraftWorldwide, Initiative Media
Worldwide, Octagon, Zentropy Partners, NFO Worldwide, The Allied Communications
Group and other related companies.
The shares of The Interpublic Group of Companies, Inc. are listed on the New
York Stock Exchange (IPG). For further information visit:
http://www.Interpublic.com
# # # #
Contact: Sean F. Orr Thomas J. Volpe
212/399-8093 212/399-8056
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
SECOND QUARTER REPORT 2000 AND 1999 (UNAUDITED)
(Amounts in Thousands Except Per Share Data)
Three Months Ended June 30
------------------------------------------ Post-Restr. Pre-Restr.
2000 Post- 2000 Pre- %Favorable %Favorable
Restructuring Restructuring 1999 (Unfavorable) (Unfavorable)
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Revenue
United States $ 749,792 $ 749,792 $ 624,080 20.1 20.1
International $ 668,400 $ 668,400 $ 607,033 10.1 10.1
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Total Revenue $1,418,192 $1,418,192 $1,231,113 15.2 15.2
Operating Costs $1,124,685 $1,124,685 $ 979,470 (14.8) (14.8)
Restructuring and other Merger
Related Costs $ 52,775 $ - $ - N/A N/A
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Income from Operations $ 240,732 $ 293,507 $ 251,643 (4.3) 16.6
Interest Expense $ (22,039) $ (22,039) $ (20,559) (7.2) (7.2)
Other Income, Net $ 29,105 $ 29,105 $ 29,115 - -
Income Before Provision
for Income Taxes $ 247,798 $ 300,573 $ 260,199 (4.8) 15.5
Provision for Income Taxes $ 105,065 $ 122,801 $ 103,989 (1.0) (18.1)
Net Equity Interests (a) $ (5,894) $ (5,894) $ (6,203) 5.0 5.0
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Net Income $ 136,839 $ 171,878 $ 150,007 (8.8) 14.6
Per Share Data:
Basic E.P.S. $ 0.46 $ 0.58 $ 0.51 (9.8) 13.7
Diluted E.P.S. (b) $ 0.45 $ 0.56 $ 0.49 (8.2) 14.3
Dividend per share
- Interpublic $ 0.095 $ 0.095 $ 0.085 11.8 11.8
Weighted Average Shares:
Basic 294,438 294,438 292,201
Diluted 317,236 317,236 311,456
Six Months Ended June 30
------------------------------------------ Post-Restr. Pre-Restr.
2000 Post- 2000 Pre- %Favorable %Favorable
Restructuring Restructuring 1999 (Unfavorable) (Unfavorable)
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Revenue
United States $1,421,750 $1,421,750 $1,157,860 22.8 22.8
International $1,194,653 $1,194,653 $1,095,687 9.0 9.0
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Total Revenue $2,616,403 $2,616,403 $2,253,547 16.1 16.1
Operating Costs $2,211,432 $2,211,432 $1,910,497 (15.8) (15.8)
Restructuring and other Merger
Related Costs $ 88,826 $ - $ - N/A N/A
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Income from Operations $ 316,145 $ 404,971 $ 343,050 (7.8) 18.1
Interest Expense $ (42,416) $ (42,416) $ (38,012) (11.6) (11.6)
Other Income, Net $ 45,901 $ 45,901 $ 41,837 9.7 9.7
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Income Before Provision
for Income Taxes $ 319,630 $ 408,456 $ 346,875 (7.9) 17.8
Provision for Income Taxes $ 135,947 $ 169,002 $ 139,567 2.6 (21.1)
Net Equity Interests (a) $ (9,551) $ (9,551) $ (8,589) (11.2) (11.2)
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Net Income $ 174,132 $ 229,903 $ 198,719 (12.4) 15.7
Per Share Data:
Basic E.P.S. $ 0.59 $ 0.78 $ 0.68 (13.2) 14.7
Diluted E.P.S. (c) $ 0.57 $ 0.75 $ 0.66 (13.6) 13.6
Dividend per share
-Interpublic $ 0.095 $ 0.095 $ 0.085 11.8 11.8
Weighted Average Shares:
Basic 294,168 294,168 291,366
Diluted 304,390 311,083 308,903
(a) Net equity interests is the net of equity in income of unconsolidated affiliates less income
attributable to minority interests of consolidated subsidiaries.
(b) 2000 and 1999 include the addback of restricted stock dividends and the assumed conversion of
the 1.80% and 1.87% Convertible Subordinated Notes.
(c) 2000 Post-Restructuring includes the addback of restricted stock dividends. 2000
Pre-Restructuring and 1999 include the addback of restricted stock dividends and the assumed
conversion of the 1.80% Convertible Subordinated Notes.
All prior data has been restated to reflect the aggregate effect of NFO Worldwide, Inc. and several
other acquisitions accounted for as poolings of interests.