-----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, CubHSt/pTW81qvUa0gd4WIuLV1HgnHCox9bR7YKtUKXRT/j6bG4C4zsXNUrkBYGn o2EmuK1xEXgvLLOwREzP/g== 0000704051-99-000003.txt : 19990618 0000704051-99-000003.hdr.sgml : 19990618 ACCESSION NUMBER: 0000704051-99-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990603 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990604 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEGG MASON INC CENTRAL INDEX KEY: 0000704051 STANDARD INDUSTRIAL CLASSIFICATION: 6211 IRS NUMBER: 521200960 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08529 FILM NUMBER: 99640175 BUSINESS ADDRESS: STREET 1: 100 LIGHT ST CITY: BALTIMORE STATE: MD ZIP: 21202-1476 BUSINESS PHONE: 4105390000 MAIL ADDRESS: STREET 1: 100 LIGHT ST CITY: BALTIMORE STATE: MD ZIP: 21202-1476 8-K 1 8-K TEXT 1 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): June 3, 1999 LEGG MASON, INC. (Exact Name of Registrant as Specified in its Charter) Maryland 1-8529 52-1200960 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File No.) Identification No.) 100 Light Street, Baltimore, Maryland 21202 (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, Including Area Code: (410) 539-0000 Not Applicable (Former name or former address, if changed since last report) 2 Item 5. Other Events On June 3, 1999, Legg Mason, Inc. (the "Company") issued a press release regarding revisions to its fiscal 1999 earnings and stockholders' equity. 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 (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 June 3, 1999. 3 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: June 3, 1999 By: /s/ Robert F. Price Robert F. Price Senior Vice President 4 EXHIBIT INDEX Exhibit 99 Press Release of Legg Mason, Inc. dated June 3, 1999 EX-99 2 1 EXHIBIT 99 FOR IMMEDIATE RELEASE For further information: Barry Bilson - or - Timothy C. Scheve 410-539-0000 LEGG MASON REVISES FISCAL 1999 EARNINGS AND STOCKHOLDERS' EQUITY, WHICH REMAIN AT RECORD LEVELS Baltimore, MD - June 3, 1999 - Legg Mason, Inc. (NYSE: LM) announced today that, as a result of a change in rules relating to the accounting treatment of the Company's deferred compensation stock plan (the "Plan"), it is revising its earnings and stock-holders' equity for the quarter and fiscal year ended March 31, 1999 and is restating its earnings and stockholders' equity for the quarters ended September 30 and December 31, 1998. For the fiscal year ended March 31, 1999, the changes reduce net earnings from $95,545,000 to $89,334,000; diluted earnings by $0.07 per share, from $1.62 to $1.55 per share; and stockholders' equity from $590 million to $554 million. All remain the highest in the Company's history. The changes have been made to conform to an FASB Emerging Issues Task Force pronouncement (No. 97-14) which became effective on September 30, 1998 and which requires that increases or decreases in the value of the Company's stock held by a trust established in connection with the Plan be treated as non-cash decreases or increases in the Company's earnings. It also requires that the deferred compensation obligation be recorded on the Company's balance sheet as a liability and that stockholders' equity be reduced by the net amount of the liability. The pronouncement applies to the Plan even though the Company has fully funded its obligations under the Plan and related compensation arrangements. While the changes reduce reported earnings, they represent a non-cash item with no effect on operating cash flow. The Company has amended the Plan so that after the fiscal first quarter which ends on June 30, 1999, changes in the value of the stock held by the Plan trust will no longer affect the Company's earnings and stockholders' equity will be substantially restored. During the first two months of the current fiscal year, the Company has continued its record of growth in assets under management and has recorded strong revenues in its securities brokerage business. A summary of original and revised financial information is attached. 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. 2 Legg Mason, Inc. Statements of Earnings Quarter Ended March 31, 1999 (in 000's, except per share amounts)
Quarters ended As % Change Reported EITF 97-14 Restated Prior Year From Prior Mar. 99 Adjustment Mar. 99 Mar. 98 Year Revenues Investment advisory and related fees $111,106 $- $111,106 $85,002 30.7 Commissions 78,007 - 78,007 64,958 20.1 Principal transactions 26,482 - 26,482 23,869 10.9 Investment banking 18,878 - 18,878 23,672 (20.3) Interest 40,905 - 40,905 36,115 13.3 Other 13,768 - 13,768 12,729 8.2 289,146 - 289,146 246,345 17.4 Expenses Compensation and benefits 162,578 - 162,578 136,465 19.1 Occupancy and equipment rental 16,951 - 16,951 16,058 5.6 Communications 12,502 - 12,502 12,192 2.5 Floor brokerage and clearing fees 1,763 - 1,763 1,433 23.0 Interest 23,981 - 23,981 21,753 10.2 Non-cash deferred compensation adjustment - 3,110 3,110 - N/M Other 28,302 - 28,302 19,281 46.8 246,077 3,110 249,187 207,182 20.3 Earnings before income taxes 43,069 (3,110) 39,959 39,163 2.0 Income taxes 16,412 (1,244) 15,168 15,642 (3.0) Net earnings $26,657 $(1,866) $24,791 $23,521 5.4 Earnings per share Basic $0.47 $(0.02) $0.45 $0.43 4.7 Diluted $0.45 $(0.02) $0.43 $0.40 7.5 Shares outstanding Basic 56,189 (1,392) 54,797 54,926 (0.2) Diluted 59,355 (1,392) 57,963 58,728 (1.3) Book Value per Share $10.47 (0.39) $10.08 $9.08 11.0
3 Legg Mason, Inc. Statements of Earnings Fiscal Year Ended March 31, 1999 (in 000's, except per share amounts)
Fiscal year ended As % Change Reported EITF 97-14 Restated Prior Year From Prior Mar. 99 Adjustment Mar. 99 Mar. 98 Year Revenues Investment advisory and related fees $390,216 $- $390,216 $ 295,645 32.0 Commissions 279,136 - 279,136 241,284 15.7 Principal transactions 94,105 - 94,105 86,748 8.5 Investment banking 76,118 - 76,118 97,138 (21.6) Interest 160,292 - 160,292 127,268 25.9 Other 46,139 - 46,139 40,977 12.6 1,046,006 - 1,046,006 889,060 17.7 Expenses Compensation and benefits 584,830 - 584,830 511,413 14.4 Occupancy and equipment rental 64,289 - 64,289 56,740 13.3 Communications 47,963 - 47,963 42,726 12.3 Floor brokerage and clearing fees 6,677 - 6,677 5,464 22.2 Interest 94,910 - 94,910 73,706 28.8 Non-cash deferred compensation adjustment - 10,352 10,352 - N/M Other 88,210 - 88,210 70,632 24.9 886,879 10,352 897,231 760,681 18.0 Earnings before income taxes 159,127 (10,352) 148,775 128,379 15.9 Income taxes 63,582 (4,141) 59,441 52,258 13.7 Net earnings $95,545 $(6,211) $89,334 $76,121 17.4 Earnings per share Basic $1.72 $(0.08) $1.64 $1.40 17.1 Diluted $1.62 $(0.07) $1.55 $1.31 18.3 Shares outstanding Basic 55,664 (1,327) 54,337 54,431 (0.2) Diluted 58,984 (1,327) 57,657 58,007 (0.6) Book Value per Share $10.47 (0.39) $10.08 $9.08 11.0
4 Legg Mason, Inc. Consolidated Statements of Financial Condition (in thousands, except per share amounts)
MARCH 31, 1999 AS DISCUSSED RESTATED ASSETS Cash and cash equivalents $207,562 $208,142 Cash and securities segregated for regulatory purposes 1,374,255 1,374,255 Resale agreements 141,016 141,016 Receivable from customers 921,267 921,267 Securities borrowed 308,719 308,719 Securities inventory, at market value 143,998 143,998 Investment securities, at market value 17,230 17,230 Equipment and leasehold improvements, net 55,807 55,807 Intangible assets, net 56,127 56,127 Other 234,876 247,126 $3,460,857 $3,473,687 LIABILITIES Payable to customers $2,170,588 $2,170,588 Payable to brokers and dealers 10,430 10,430 Securities loaned 311,818 311,818 Short-term borrowings 49,262 49,262 Securities sold, but not yet purchased, at market value 11,822 11,822 Accrued compensation 115,480 115,480 Deferred compensation trust - 48,986 Other 101,448 101,448 Senior notes 99,676 99,676 $2,870,524 $2,919,510 STOCKHOLDERS' EQUITY Common stock 5,638 5,638 Additional paid-in capital 215,387 215,387 Deferred compensation & employee note receivable (5,362) (5,362) Employee stock trust - (18,475) Appreciation of employee stock trust, net - (11,470) Retained earnings 374,843 368,632 Accumulated other comprehensive income, net (173) (173) $590,333 $554,177 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,460,857 $3,473,687 Book Value per Share $10.47 $10.08
5 Legg Mason, Inc. Statements of Earnings Quarter Ended December 31, 1998 (in 000's, except per share amounts)
Quarters ended As % Change Reported EITF 97-14 Restated Prior Year From Prior Dec. 98 Adjustment Dec. 98 Dec. 97 Year Revenues Investment advisory and related fees $95,389 $- $95,389 $76,704 24.4 Commissions 70,212 - 70,212 60,847 15.4 Principal transactions 23,169 - 23,169 19,989 15.9 Investment banking 20,061 - 20,061 33,313 (39.8) Interest 39,243 - 39,243 33,776 16.2 Other 12,440 - 12,440 10,583 17.5 260,514 - 260,514 235,212 10.8 Expenses Compensation and benefits 146,967 - 146,967 142,231 3.3 Occupancy and equipment rental 16,498 - 16,498 14,401 14.6 Communications 10,868 - 10,868 10,369 4.8 Floor brokerage and clearing fees 1,652 - 1,652 1,346 22.7 Interest 23,324 - 23,324 19,348 20.5 Non-cash deferred compensation adjustment - 7,482 7,482 - N/M Other 22,759 - 22,759 18,907 20.4 222,068 7,482 229,550 206,602 11.1 Earnings before income taxes 38,446 (7,482) 30,964 28,610 8.2 Income taxes 15,622 (2,993) 12,629 11,574 9.1 Net earnings $22,824 $(4,489) $18,335 $17,036 7.6 Earnings per share Basic $0.41 $(0.07) $0.34 $0.31 9.7 Diluted $0.39 $(0.07) $0.32 $0.29 10.3 Shares outstanding Basic 55,841 (1,364) 54,477 54,596 (0.2) Diluted 58,863 (1,364) 57,499 58,402 (1.5) Book Value per Share $10.07 (0.34) $9.73 $8.72 11.6
6 Legg Mason, Inc. Consolidated Statements of Financial Condition (in thousands, except per share amounts)
DECEMBER 31, 1998 AS REPORTED RESTATED ASSETS Cash and cash equivalents $263,564 $264,017 Cash and securities segregated for regulatory purposes 1,259,438 1,259,438 Resale agreements 230,884 230,884 Receivable from customers 858,314 858,314 Securities borrowed 169,106 169,106 Securities inventory, at market value 126,904 126,904 Investment securities, at market value 27,590 27,590 Equipment and leasehold improvements, net 54,201 54,201 Intangible assets, net 57,508 57,508 Other 173,192 184,230 $3,220,701 $3,232,192 LIABILITIES Payable to customers $2,111,772 $2,111,772 Payable to brokers and dealers 8,022 8,022 Securities loaned 172,070 172,070 Short-term borrowings 55,581 55,581 Securities sold, but not yet purchased, at market value 6,646 6,646 Accrued compensation 107,808 107,808 Deferred compensation trust - 44,341 Other 93,264 93,264 Senior notes 99,664 99,664 $2,654,827 $2,699,168 STOCKHOLDERS' EQUITY Common stock 5,617 5,617 Additional paid-in capital 213,900 213,900 Employee stock transactions (5,631) (5,631) Employee stock trust - (16,773) Appreciation of employee stock trust, net - (11,732) Retained earnings 351,875 347,530 Accumulated other comprehensive income, net 113 113 $565,874 $533,024 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,220,701 $3,232,192 Book Value per Share $10.07 $9.73
7 Legg Mason, Inc. Statements of Earnings Quarter Ended September 30, 1998 (in 000's, except per share amounts)
Quarters ended As % Change Reported EITF 97-14 Restated Prior Year From Prior Sept. 98 Adjustment Sept. 98 Sept. 97 Year Revenues Investment advisory and related fees $93,318 $- $93,318 $ 71,222 31.0 Commissions 65,956 - 65,956 63,870 3.3 Principal transactions 22,044 - 22,044 20,840 5.8 Investment banking 16,244 - 16,244 25,232 (35.6) Interest 39,959 - 39,959 30,546 30.8 Other 10,082 - 10,082 9,213 9.4 247,603 - 247,603 220,923 12.1 Expenses Compensation and benefits 138,136 - 138,136 126,655 9.1 Occupancy and equipment rental 15,004 - 15,004 14,204 5.6 Communications 12,589 - 12,589 10,682 17.9 Floor brokerage and clearing fees 1,758 - 1,758 1,500 17.2 Interest 23,377 - 23,377 17,929 30.4 Non-cash deferred compensation adjustment - (240) (240) - N/M Other 20,066 - 20,066 17,089 17.4 210,930 (240) 210,690 188,059 12.0 Earnings before income taxes 36,673 240 36,913 32,864 12.3 Income taxes 14,973 96 15,069 13,559 11.1 Net earnings $21,700 $144 $21,844 $19,305 13.2 Earnings per share Basic $0.39 $- $0.39 $0.36 8.3 Diluted $0.37 $- $0.37 $0.33 12.1 Shares outstanding Basic 55,497 (59) 55,438 54,238 2.2 Diluted 58,861 - 58,861 57,901 1.7 Book Value per Share $9.76 (0.25) $9.51 $8.46 12.4
8 Legg Mason, Inc. Consolidated Statements of Financial Condition (in thousands, except per share amounts)
SEPTEMBER 30, 1998 AS REPORTED RESTATED ASSETS Cash and cash equivalents $238,628 $238,991 Cash and securities segregated for regulatory purposes 949,620 949,620 Resale agreements 217,487 217,487 Receivable from customers 855,906 855,906 Securities borrowed 274,164 274,164 Securities inventory, at market value 102,405 102,405 Investment securities, at market value 30,228 30,228 Equipment and leasehold improvements, net 53,482 53,482 Intangible assets, net 58,822 58,822 Other 152,326 160,369 $2,933,068 $2,941,474 LIABILITIES Payable to customers $1,731,642 $1,731,642 Payable to brokers and dealers 8,152 8,152 Securities loaned 289,449 289,449 Short-term borrowings 90,322 90,322 Securities sold, but not yet purchased, at market value 8,415 8,415 Accrued compensation 82,944 82,944 Deferred compensation trust - 35,107 Other 78,981 78,981 Senior notes 99,652 99,652 $2,389,557 $2,424,664 STOCKHOLDERS' EQUITY Common stock 5,566 5,566 Additional paid-in capital 205,389 205,389 Employee stock trust - (15,113) Appreciation of employee stock trust, net - (11,732) Retained earnings 332,668 332,812 Accumulated other comprehensive income, net (112) (112) $543,511 $516,810 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,933,068 $2,941,474 Book Value per Share $9.76 $9.51
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