-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VO0jL/nOmvUX8My+UUIgzweeKxwisHuMqdltoBnTRQaDHLSItkFjTF6GZ19/LWvm ch8/RSO0yXT7bIhb/eyg6w== 0000950123-04-013187.txt : 20041108 0000950123-04-013187.hdr.sgml : 20041108 20041108165205 ACCESSION NUMBER: 0000950123-04-013187 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041108 DATE AS OF CHANGE: 20041108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREY GLOBAL GROUP INC CENTRAL INDEX KEY: 0000043952 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 130802840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-07898 FILM NUMBER: 041126351 BUSINESS ADDRESS: STREET 1: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125462000 MAIL ADDRESS: STREET 1: 777 THIRD AVE STREET 2: 777 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: GREY ADVERTISING INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 y68513e8vk.txt FORM 8-K UNITED STATES 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): November 8, 2004 (November 5, 2004) GREY GLOBAL GROUP INC. (Exact name of registrant as specified in its charter) Delaware 0-7898 13-0802840 - -------------------------------- ------------ ------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 777 Third Avenue, New York, New York 10017 (Address of principal executive offices) (212) 546-2000 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13.e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On November 5, 2004, Grey Global Group Inc. issued a press release announcing its operating results for the quarter ending September 30, 2004. A copy of the release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Press Release of Grey Global Group Inc. dated November 5, 2004 (Signature page follows) 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. GREY GLOBAL GROUP INC. By: /s/ Steven G. Felsher ------------------------------ Name: Steven G. Felsher Title: Vice Chairman Dated: November 8, 2004 EX-99.1 2 y68513exv99w1.txt PRESS RELEASE Exhibit 99.1 ------------ FOR IMMEDIATE RELEASE Contact: Jan A. Sneed (212) 546-2422 Steven G. Felsher (212) 546-2440 GREY GLOBAL GROUP INC. REPORTS STRONG THIRD QUARTER RESULTS New York, New York - November 5, 2004--Grey Global Group Inc. (NASDAQ: GREY) today announced its results for the third quarter of 2004. RESULTS - ------- Revenue - ------- Revenue for the third quarter was $358.0 million, an increase of 10.3% ($33.5 million) from the same quarter in 2003. For the nine months ended September 30, 2004, revenue was up $123.8 million, an increase of 13.1%. Revenue improved at both the Company's non-North American ("international") and North American operations. The increase was due, in part, to the continuing impact of a weaker dollar; on a constant currency basis, revenue was up 6.2% for the quarter and 6.6% for the nine months ended September 30, 2004. Revenue for the North American operations increased by 3.4% for the quarter and 7.1% for the nine months, with exchange rate movements having only a marginal impact. International operations reported a revenue increase of 16.1% for the quarter; absent the effect of the exchange rate movements, international revenue would have been up 8.6%. For the nine months ended September 30, 2004, international revenue increased 18.0% (6.6% absent exchange rate increases). Income of Consolidated Companies before Taxes on Income ("pre-tax profit") - -------------------------------------------------------------------------- The Company reported pre-tax profit grew by 74.4% ($9.4 million) for the third quarter when compared to the corresponding quarter in 2003 and 69.4% ($24.8 million) for the nine months ended September 30, 2004. In the third quarter, the Company recognized $2.5 million of expenses in connection with the previously announced signing of an agreement to have the Company merge into WPP Group plc. and a loss of $1.8 million on the sale of its majority interest in APCO Worldwide Inc., part of the Company's public relations/affairs operations. Even after these charges, the Company's margins improved significantly. Comparisons to 2003 third quarter results are also affected by the absence of a $2.6 million reserve recorded last year in connection with the liquidation of a business in Europe. Net Income/EPS - -------------- Net income was $10.3 million for the third quarter of 2004 and $27.4 million for the nine months ended September 30, 2004 compared with $4.6 million and $14.4 million for the corresponding periods in 2003. Basic and diluted earnings per common share for the three months ended September 30, 2004 were $7.50 and $7.26, respectively, compared to $3.57 and $3.28 for the same quarter in 2003. Basic and diluted earnings were $20.05 and $19.44, respectively, for the nine months ended September 30, 2004 versus $10.30 and $9.45 in 2003. GREY/2004 Page Two * * * * * Grey Global Group ranks among the largest global communications companies in the world. Grey Global Group operates branded independent business units in many communications disciplines including general advertising, public relations/public affairs, direct marketing, internet communications, healthcare marketing, brand strategy and design, and on-line and off-line media services. ================================================================================ (Part of this announcement may contain forward-looking statements that involve risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed with the Securities and Exchange Commission, including but not limited to the last section of the Management's Discussion and Analysis entitled "Forward Looking Statements" contained in the Company's most recent Form 10-K and in other filings.) (Charts follow) GREY/2004 Page Three Grey Global Group Inc. and Consolidated Subsidiary Companies Condensed Consolidated Statements of Operations
- ------------------------------------------------------------------------------------------------------------- For the Three Months Ended September 30 ------------------------------ (in thousands, except share and per share data) 2004 2003 ------------------------------ Revenue $ 358,025 $ 324,487 Income of consolidated companies before taxes on income 21,910 12,560 Provision for taxes on income 10,652 6,405 Minority interest applicable to consolidated companies (1,191) (1,577) Equity in earnings of nonconsolidated affiliated companies 254 5 ----------------------------- Net income $ 10,321 $ 4,583 ============================= Weighted average number of common shares outstanding - Basic 1,375,916 1,284,261 ============================= - Diluted 1,422,245 1,408,330 ============================= Earnings per common share (Notes 1 and 2) - Basic $ 7.50 $ 3.57 ============================= - Diluted $ 7.26 $3.28 ============================= - ------------------------------------------------------------------------------------------------------------- For the Nine Months Ended September 30 ------------------------------ (in thousands, except share and per share data) 2004 2003 ------------------------------ Revenue $1,065,909 $ 942,075 Income of consolidated companies before taxes on income 60,634 35,801 Provision for taxes on income 30,014 17,793 Minority interest applicable to consolidated companies (3,990) (4,029) Equity in earnings of nonconsolidated affiliated companies 762 421 ----------------------------- Net income $ 27,392 $ 14,400 ============================= Weighted average number of common shares outstanding - Basic 1,366,452 1,273,596 ============================= - Diluted 1,409,429 1,399,596 ============================= Earnings per common share (Notes 1 and 2) - Basic $20.05 $10.30 ============================= - Diluted $19.44 $ 9.45 - --------------------------------------------------------------------------------------------------------------
1. Earnings used in the computation of basic and diluted earnings per share in 2003 were reduced by the increase in value of the Company's Preferred Stock; the Preferred Stock was redeemed on April 7, 2004 at a value determined as at December 31, 2003 and, accordingly, there has been no such reduction after December 31, 2003. 2. After giving effect to amounts attributable to the assumed exercise of dilutive stock options and the effect of certain share grants pursuant to the Company's stock incentive plans. GREY/2004 Page Four Grey Global Group Inc. and Consolidated Subsidiary Companies Exchange Rate Effects on Revenue
- ----------------------------------------------------------------------------------------------------------------- For the Three Months Ended September 30 2004 vs. 2003 ------------------------------------------------------------------------ Non-Exchange Rate Exchange Rate Total Growth Impacted Growth Impact - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- Revenue from: - ----------------------------------------------------------------------------------------------------------------- North American operations 3.4% 3.2% 0.2% - ----------------------------------------------------------------------------------------------------------------- International operations: - ----------------------------------------------------------------------------------------------------------------- Europe 18.2% 9.3% 8.9% - ----------------------------------------------------------------------------------------------------------------- Asia/Latin America 7.3% 5.8% 1.5% - ----------------------------------------------------------------------------------------------------------------- Total International operations 16.1% 8.6% 7.5% - ----------------------------------------------------------------------------------------------------------------- Total Revenue 10.3% 6.2% 4.1% - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- For the Nine Months Ended September 30 2004 vs. 2003 ------------------------------------------------------------------------ Non-Exchange Rate Exchange Rate Total Growth Impacted Growth Impact - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- Revenue from: - ----------------------------------------------------------------------------------------------------------------- North American operations 7.1% 6.6% 0.5% - ----------------------------------------------------------------------------------------------------------------- International operations: - ----------------------------------------------------------------------------------------------------------------- Europe 19.0% 6.0% 13.0% - ----------------------------------------------------------------------------------------------------------------- Asia/Latin America 13.4% 9.1% 4.3% - ----------------------------------------------------------------------------------------------------------------- Total International operations 18.0% 6.6% 11.4% - ----------------------------------------------------------------------------------------------------------------- Total Revenue 13.1% 6.6% 6.5% - -----------------------------------------------------------------------------------------------------------------
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