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Interpublic Group of: New York, Ny (April 22, 2016) Interpublic Announces First Quarter Results

The following excerpt is from the company's SEC filing.

Strong organic revenue


and reported revenue

First quarter



$20.9 million

, compared to income of

$7.8 million

a year ago, in seasonally small

first quarter

Reported diluted earnings per share was

, and break-even as adjusted for below-the-line items

Company states it is well-positioned to achieve high end of 2016 organic revenue growth target of 3% - 4% and to expand full-year operating margin by 50 bps or better



revenue was

$1.74 billion

$1 .68 billion

in the

, with an organic revenue increase of

compared to the prior-year period. This was comprised of an organic

in the U.S. and


Operating Results

Operating margin was

for the

Net Results

results include a non-operating pre-tax loss of $16.3 million on the sales of businesses, in "Other (Expense) Income, net," which is chiefly non-cash. This amount includes losses on completed dispositions and the classification of certain assets as held for sale.

The income tax benefit in the quarter includes valuation allowance reversals of $12.2 million as a consequence of the classification of assets as held for sale, as well as a benefit of $7.5 million related to the adoption of the Financial Accounting Standards Board Accounting Standards Update 2016-09.

available to IPG common stockholders was

$5.4 million

, resulting in earnings of

per basic and diluted share. This compares to net

Interpublic Group

909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax

available to IPG common stockholders a year ago of

$1.8 million

and break-even earnings per basic and diluted share.

“We are pleased to report another quarter of very strong performance, driven by solid contributions from across the portfolio. Our results reflect growth with existing clients, as well as new business wins, and strength in all geographic regions, led by notable domestic performance,” said Michael I. Roth, Interpublic’s Chairman and CEO. “Our digital expertise - whether embedded within all of our agency networks or at our stand-alone specialist agencies - continues to make us a valued partner for clients as they respond to an increasingly complex media and marketing landscape. Another key differentiator for IPG is our long-standing commitment to integrated ‘open architecture’ solutions customized to client needs. First quarter profit performance demonstrates that we are focused on driving further margin expansion. We also remain committed to our robust capital return programs. While the first quarter is seasonally small for us, our results position us to deliver on the high end of our 2016 target of 3% - 4% organic revenue growth and to expand full-year operating margin by 50 basis points or better. The caliber of our people and our offerings, coupled with strong operating discipline, is a winning combination that will ensure we continue to deliver for clients and further enhance shareholder value.”

Revenue of


compared with the same period in

. During the quarter, the effect of foreign currency translation was


, the impact of net acquisitions was


and the resulting organic revenue

Operating Expenses

Total operating expenses increased

in the first quarter of 2016 from a year ago, compared with revenue growth of

Salaries and related expenses were

$1.27 billion

compared to the same period in

Staff cost ratio, which is total salaries and related expenses as a percentage of total revenue, was

in the same period in

, in the seasonally small first quarter, due to higher expenses for long-term performance-based compensation and severance.

, office and general expenses were

$450.2 million


, due to the impact of changes in foreign currency translation and decreased pass-through expenses. Office and general expenses were

of revenue in the

a year ago.

Non-Operating Results and Tax

Net interest expense of

$16.8 million

$3.1 million

$15.6 million

before income taxes of

$13.0 million

, compared to a

$1.4 million

$5.6 million

. The income tax benefit in the

was primarily driven by valuation allowance reversals of $12.2 million, as a consequence of the classification of certain assets as held for sale, in addition to a benefit of $7.5 million on the early adoption of the Financial Accounting Standards Board Accounting Standards Update 2016-09, which requires all excess tax benefits and tax deficiencies on employee share-based payment accounting to be recognized in earnings instead of as additional paid-in capital, on a prospective basis.

Balance Sheet

March 31, 2016

, cash, cash equivalents and marketable securities totaled

$680.3 million

$1.51 billion

December 31, 2015

$741.2 million

March 31, 2015

. Total debt was

$1.76 billion

Share Repurchase Program and Common Stock Dividend

, the company repurchased

2.5 million

shares of its common stock at an aggregate cost of

$53.7 million

and an average price of


per share, including fees.

, the company declared and paid a common stock cash dividend of

per share, for a total of

$59.9 million

For more information concerning the company's financial results, please refer to the accompanying slide presentation available on our website,

About Interpublic

Interpublic is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include BPN, CRAFT, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton Worldwide, MAGNA GLOBAL, McCann, Momentum, MRM//McCann, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit

Contact Information

Tom Cunningham


(212) 704-1326

Jerry Leshne

(Analysts, Investors)

(212) 704-1439

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,




(Amounts in Millions except Per Share Data)


Three months ended March 31,

Fav. (Unfav.)

% Variance


United States




Total Revenue



Operating Expenses:

Salaries and Related Expenses



Office and General Expenses

Total Operating Expenses



Operating Income

Operating Margin %

Expenses and Other Income:

Interest Expense

Interest Income

Other (Expense) Income, Net

Total (Expenses) and Other Income

Loss before Income Taxes

Benefit of Income Taxes

Income (Loss) of Consolidated Companies

Equity in Net Income of Unconsolidated Affiliates

Net Income (Loss)

Net Loss Attributable to Noncontrolling Interests

Net Income (Loss) Available to IPG Common Stockholders

Earnings (Loss) Per Share Available to IPG Common Stockholders:


Weighted-Average Number of Common Shares Outstanding:

Dividends Declared Per Common Share



Three months ended March 31, 2016

As Reported

Losses on Sales of Businesses

Valuation Allowance Reversals

Adoption of ASU 2016-09

Adjusted Results

(Loss) Income Before Income Taxes

Benefit of (Provision for) Income Taxes

Net Income Available to IPG Common Stockholders

Weighted-Average Number of Common Shares Outstanding - Basic

Add: Effect of Dilutive Securities

Restricted Stock, Stock Options and Other Equity Awards

Weighted-Average Number of Common Shares Outstanding - Diluted

Earnings Per Share Available to IPG Common Stockholders - Basic

Earnings Per Share Available to IPG Common Stockholders - Diluted

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Quarterly report [Sections 13 or 15(d)] - April 22, 2016

Other definitive proxy statements - April 8, 2016