BARRA Reports Record Revenues
October 23, 1997 04:30 PM
BERKELEY, Calif., Oct. 23 /PRNewswire/ -- BARRA, Inc. BARZ today reported a 28 percent increase in revenues and a 23 percent increase in net income for the quarter ended September 30, 1997, as compared to the same quarter a year ago before one-time charges.
For the September 1997 quarter, the Company reported consolidated revenues of $31,234,193 and net income of $3,673,451 or 25 cents per share. This compares to revenues of $24,473,840 and net income, excluding merger costs and one-time charges, of $2,989,971 or 22 cents per share for the same quarter a year ago. Net income, including $1,756,189 of merger and other one-time charges for the 1996 Rogers, Casey & Associates, Inc. merger, was $1,936,258 or 14 cents per share for the September quarter a year ago. All earnings per share amounts have been restated to reflect the Company's recent 3-for-2 stock split.
"We have maintained profitable growth during a period of increased expenses for investments in new and existing businesses," said Andrew Rudd, BARRA's chairman and chief executive officer. "As a result of these investments we have released two new Windows-based U.S. fixed income products and a new equity transaction cost measurement model, and commenced a new investment data products business. We are very excited about this new business and these new products," he added.
Revenues from the analytics and consulting businesses were up 27 percent in aggregate over the same quarter a year ago. Included in the September 1997 quarter results for the first time were approximately $2.1 million of subscription and consulting fee revenues from the Company's newly acquired Global Advanced Technology Corporation (GAT) subsidiary. Excluding the impact of the new GAT revenues, subscription and consulting fee revenues were up 16 percent in aggregate over the same quarter a year ago. Revenues from annual subscriptions to analytics products were up approximately 27 percent in the U.S. and up approximately 21 percent in non-U.S. markets over the prior year. These increases continue to come from the new Windows-based equity and fixed income products introduced during the last 24 months but do not yet include any revenues from the new products released in October of this year. The subscription revenue increases were partially offset by decreases or lower growth rates for one-time and other non-recurring fees and the revenues from the pension sponsor and money manager consulting business.
Revenues from the Company's asset management businesses totaled $5,174,933 for the September 1997 quarter, compared to $3,574,541, for the same quarter a year ago. Included in the September 1997 quarter results were approximately $1.8 million of performance-based fees from accounts where investment performance exceeded agreed upon benchmarks. This represents an increase of approximately $500,000 in performance fees compared to the same quarter a year ago.
The investment management contracts for those clients of the Company's asset management subsidiary, Symphony Asset Management LLC, whose funds are managed on a performance fee basis, provide for the fees to be determined and paid primarily on the annual anniversary dates of the contracts. Symphony, therefore, only recognizes these fees as revenue on these determination dates. Symphony performance fees for the September 1997 quarter were for accounts representing approximately 5 percent of the current total of assets subject to performance fees. It is estimated that approximately 45 percent and 20 percent of the current total of performance-based funds under management will have performance fee determination dates in the quarters ended December 31, 1997 and March 31, 1998, respectively. The pattern of anniversaries can change from quarter to quarter because of the addition, termination and renegotiation of account agreements. There is also, of course, no assurance that the investment performance will continue at historical levels.
As of the beginning of the December 1997 quarter, Symphony had approximately $1.9 billion of assets under direct management. Of the funds under direct management, approximately $1.2 billion are managed under agreements that provide for performance fees in addition to a base management fee.
Electronic brokerage revenues consist primarily of royalties from the operation of the Portfolio System for Institutional Trading (POSIT). The POSIT portion of these revenues was up 4 percent from the same quarter a year ago, but down somewhat from the record levels of the June, 1997 quarter.
The Company's consolidated revenues for the six months ended September 30, 1997 were $58,340,655, up 23 percent from the same period a year ago. Net income for the first six months of this year, excluding one-time charges for the write-off of in-process research and development costs associated with the acquisition of GAT, was $7,325,444, or 52 cents per share. Including the one-time GAT charges of $9.9 million, the Company had a net loss of $2,588,556, or a loss of 20 cents per share. Revenues for the six months ended September 30, 1996 were $47,400,589. Net income for the six months, excluding merger and other one-time charges associated with the acquisition of RogersCasey, was $5,758,173, or 41 cents per share. Including the one-time RogersCasey charges of $1.8 million, the Company had net income of $4,704,460, or 34 cents per share for the six months ended September 30, 1996.
BARRA, founded in 1975, provides innovative analytical models, software, consulting and money management services that enable its clients worldwide to make superior investment and trading decisions. Based in Berkeley, Calif., BARRA also has offices in major financial centers throughout the world. Information on BARRA is also available on-line at barra.com.
Each statement contained in this news release containing any form of the word "estimate" is a forward-looking statement that may involve a number of risk factors and uncertainties. Among other factors that could cause actual results to differ materially are the following: the timing of performance fee determination dates for the Company's asset management business. Further information on potential factors that could affect the Company's financial results are included in the Company's Form 10-K for the 1997 fiscal year filed with the Securities and Exchange Commission (SEC). Please refer to the Company's SEC filings, copies of which are available from the Company without charge for further information. |
