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Sotheby's Reports Second Quarter 2015 Financial Results Second Quarter 2015 Adjusted Diluted Earnings Per Share* is $1.04 Sotheby's Board Increases Share Repurchase Program to $250 million — Will Repurchase $125 million in the Near Term

NEW YORK,-- Sotheby's (NYSE:BID) on 7 August reported financial results for the second quarter and six months ended 30 June 2015.

For the three and six months ended 30 June 2015, Sotheby's reported total revenues of $332.0 million and $487.7 million, respectively, a decrease of 1% in both periods as compared to the prior year. This slight decline is largely due to a change in the timing of the summer evening sale of Contemporary Art in London, which was held in the third quarter in 2015 after being held in the second quarter in 2014, as well as unfavorable movements in foreign currency exchange rates which contributed $12.4 million and $20.5 million to the overall decreases in total revenues for the second quarter and first half periods, respectively. Total revenues excluding the impact of foreign currency exchange rate changes* increased by $8.6 million (3%) and $15.5 million (3%), for the three and six month periods, respectively.

For the three and six months ended 30 June 2015, Adjusted Operating Income* of $125.5 million and $147.7 million, respectively, decreased by $23.5 million (16%) and $11.1 million (7%), respectively. The decline is due to the calendar shift of the summer evening sale of Contemporary Art in London, as well as a loss incurred on a painting acquired by Sotheby's earlier in the year and sold at auction in the second quarter. This painting was acquired along with another painting that was sold at auction for an offsetting profit which will be recognized later in the year when payment is received and title passes to the buyer. Also unfavorably influencing the comparison to the prior periods is the impact of provisions recorded in the second quarter as a result of recent developments, including a cancelled sale provision and costs associated with a client claim, both related to property sold in prior years.

Partially offsetting the unfavorable events in the second quarter of 2015 is an increase in private sale commissions as well as an improvement in auction commission margins. For the three and six months ended 30 June 2015, private sale commissions increased $5.4 million (32%) and $3.8 million (13%), respectively, due to an increase in the volume of high-value transactions completed during the second quarter. Also, for the three and six months ended 30 June 2015, Auction Commission Margin increased 0.3% (from 15.2% to 15.5%) and 0.4% (from 14.9% to 15.3%), respectively, primarily due to the change in the buyer's premium rate structure enacted in February, partially offset by a higher level of shared auction commissions and an unfavorable change in sales mix.

The second quarter and year to date periods also benefited from the continued growth of Sotheby's Financial Services loan portfolio. The loan portfolio of $774 million at 30 June 2015 increased $179.7 million (30%) when compared to the prior year, contributing revenue of $24.7 million, a $10.8 million (78%) increase over the first half of 2014.

Second quarter 2015 Adjusted Net Income* is $73.1 million and Adjusted Diluted Earnings Per Share* is $1.04, compared to $87.8 million and $1.26, respectively, a year ago. For the first half of 2015, Adjusted Net Income* is $80.5 million and Adjusted Diluted Earnings Per Share* is $1.15, compared to $84.9 million and $1.20, respectively, in last year's first half.

Including charges associated with the CEO and leadership transition, prior year shareholder activism and restructuring, operating income, net income attributable to Sotheby's and diluted earnings per share are $116.5 million, $67.6 million, and $0.96, respectively, for the second quarter of 2015, and $130.4 million, $77.6 million, and $1.11, respectively, for the second quarter of 2014. Including these charges, operating income, net income attributable to Sotheby's and diluted earnings per share are $134.9 million, $72.8 million, and $1.04, respectively, for the first half of 2015, and $134.5 million, $71.5 million, and $1.01, respectively, for the first half of 2014.

Sotheby's Board of Directors has approved an increase of $125 million to the Company's remaining share repurchase authorization of $125 million, resulting in a total share repurchase authorization of $250 million. The Board has concluded that this share repurchase program strikes a balance between preserving capital for growth, downside risk protection, and returning available capital to shareholders. Sotheby's intends to repurchase $125 million of its common stock from shareholders in the near term via an Accelerated Share Repurchase ("ASR") Program.The Company expects the balance of the share repurchase program will be executed in the next 12 - 18 months, via open market transactions and/or additional ASR Programs.

President and Chief Executive Officer Tad Smith said, "Our Company delivered strong sales to date in 2015 but some anomalies in the second quarter depressed the bottom line. We are moving forward with our strategic plan and look forward to reporting its results in due course."

Share Repurchase

The timing of repurchases and the actual amount purchased will depend on a variety of factors including the market price of the Company's common stock, general market and economic conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow the Company to purchase its shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by the Company's Board of Directors at any time.

Non-GAAP Financial Measures

* Total revenues excluding the impact of foreign currency exchange rate changes, Adjusted Operating Income, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are non-GAAP financial measures. See Appendix B for a reconciliation of these non-GAAP financial measures to the most comparable measures reported in accordance with GAAP.

Forward-Looking Statements

This release contains certain "forward-looking statements" (as such term is defined in the Securities and Exchange Act of 1934, as amended) relating to future events and the financial performance of the Company. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that the actual events or performances will differ materially from such predictions. Major factors, which the Company believes could cause the actual results to differ materially from the predicted results in the "forward-looking statements" include, but are not limited to, the overall strength of the international economy and financial markets, political conditions in various nations, competition with other auctioneers and art dealers, the amount of quality property being consigned to art auction houses and the marketability at auction of such property. Please refer to our most recently filed Form 10-Q (and/or 10-K) for a complete list of Risk Factors.

http://investor.shareholder.com/bid/secfiling.cfm?filingID=823094-15-44&CIK=823094

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