Exhibit 99.1
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FOR IMMEDIATE RELEASE Contact:
Jan A. Sneed (212) 546-2422
Steven G. Felsher (212) 546-2440
GREY GLOBAL GROUP INC.
REPORTS FOURTH QUARTER AND FULL YEAR 2003 RESULTS
New York, New York - February 27, 2004--Grey Global Group Inc. (NASDAQ: GREY)
today announced its results for the fourth quarter and the full year 2003.
RESULTS
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Revenues
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The Company reported a 9.5% increase in fourth quarter commissions and fees
("revenues") when compared to the same quarter in 2002. Revenues for the full
year were up 9.0% versus 2002. Revenue growth in the fourth quarter and the full
year were attributable principally to improvement in the Company's North
American operations and the impact of a weaker dollar on non-North American
("international") revenues. On a constant currency basis, revenues for the
quarter and the year were up 3.0% and 2.0%, respectively.
Revenues for the North American operations increased by 11.9% for the quarter
and 5.5% for the full year, with exchange rate movements having only a marginal
impact on the results. International operations reported revenue increases of
7.5% and 12.0% for the quarter and the full year, respectively; absent the
effect of the exchange rate movements, international operations would have shown
revenues down 3.0% for the fourth quarter and .3% for the full year.
Net Income
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Net income for the fourth quarter of 2003 was $14.7 million, up 54.2% from the
results of the corresponding quarter in the previous year. For the full year,
net income was $29.1 million, an increase of 59.3% for the full year. Exchange
rate movements did not have a material impact on the reported net income.
Basic and diluted earnings per common share for the three months ended December
31, 2003 were $11.38 and $10.51, respectively, compared to $6.90 and $6.27 for
the same quarter in 2002. For the full year 2003, basic and diluted earnings per
common share were $21.76 and $20.03, respectively, compared to $13.28 and $12.08
for 2002.
Company Comment
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The challenging market environment which we have had in North America the last
few years seemed to abate as 2003 progressed and there are signs of improvement
in the future. In 2003, the Company experienced its third year of difficult
trading conditions in Europe. This was most noticeable in Scandinavia where the
Company incurred substantially greater operating and other losses in 2003.
Since the beginning of 2003, Grey Global Group companies won major new business
assignments around the world. Importantly, we continued growing with our major
global clients including Procter & Gamble, GlaxoSmithKline, British American
Tobacco, Novartis and Volkswagen.
MORE..................
GREY/2003 Company Comment
Page Two
A number of significant new assignments were secured by multiple business units
working collaboratively; these included the win of Kmart in the United States by
Grey Worldwide, our principal advertising agency network, MediaCom, G2
Worldwide, our brand strategy and design consultancy, Alliance, our
entertainment event specialist, and other units. Grey Worldwide and MediaCom
came together for the global launch of Nokia's n gage game platform. Visa's
business in much of the developing world was won by Grey Worldwide and G2
Worldwide. Grey Worldwide, G2 Worldwide, Grey Direct and Grey Interactive
together won a major assignment from Deutsche Telecomm for Internet services.
In addition, around the world, various Grey Global Group business units had new
business wins from such well-known marketers as Coca Cola, Monsanto, AOL,
Allianz and Johnson & Johnson.
* * * * *
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.
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(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-Q and in other filings.)
(Chart follows)
Grey Global Group Inc. and Consolidated Subsidiary Companies
Condensed Consolidated Statements of Operations
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For the Three Months
Ended December 31
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(in thousands, except share and per share data) 2003 2002
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Commissions and fees $ 365,191 $ 333,604
Income of consolidated companies before taxes on
income 30,325 21,955
Provision for taxes on income 17,197 11,251
Minority interest applicable to consolidated
companies 1,311 (759)
Equity in earnings of nonconsolidated
affiliated companies 238 (429)
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Net income $ 14,677 $ 9,516
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Weighted average number of common shares
outstanding
- Basic 1,289,238 1,243,324
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- Diluted 1,400,003 1,374,971
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Earnings per common share (Note 1)
- Basic $ 11.38 $ 6.90
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- Diluted $ 10.51 $ 6.27
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For the Twelve Months
Ended December 31
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(in thousands, except share and per share data) 2003 2002
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Commissions and fees $1,307,266 $1,199,708
Income of consolidated companies before taxes on
income 66,125 42,972
Provision for taxes on income 34,990 21,529
Minority interest applicable to consolidated
companies (2,718) (4,005)
Equity in earnings of nonconsolidated
affiliated companies 659 817
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Net income $ 29,076 $ 18,255
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Weighted average number of common shares
outstanding
- Basic 1,277,539 1,245,856
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- Diluted 1,395,199 1,380,698
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Earnings per common share (Note 1)
- Basic $ 21.76 $ 13.28
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- Diluted $ 20.03 $ 12.08
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1. After giving effect to amounts attributable to redeemable preferred stock
and for diluted net income per common share (i) to the assumed exercise of
dilutive stock options, (ii) to the shares issuable pursuant to the
Company's Senior Management Incentive Plan and (iii) to the assumed
conversion of the 8 1/2% Convertible Subordinated Debentures which were
converted at year end.
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