Exhibit 99.1
- ------------
STILWELL
FINANCIAL INC.
920 Main Street, 21st Floor
Kansas City, Missouri 64105-2008
NYSE Symbol: SV
NEWS RELEASE
Media Contact: Investor Contacts:
Peggy Landon (816-218-2455) Landon H. Rowland (816-218-2416)
Director of Investor and Chairman, President and
Public Relations Chief Executive Officer
Daniel P. Connealy (816-218-2412)
Vice President and Chief
Financial Officer
Stilwell Financial Reports First Quarter Results
Operating and EBITDA margins exceed prior year
KANSAS CITY, Mo (April 25, 2002) - Stilwell Financial Inc. (NYSE: SV)
reported first quarter 2002 net income of $97.2 million, or 42(cent) per diluted
share, compared to $111.4 million, or 48(cent) per diluted share, in first
quarter 2001. Stilwell's first quarter 2002 operating margin of 42.0 percent and
EBITDA margin of 54.1 percent exceeded comparable prior year margins.
Consolidated revenues declined 27 percent from prior year's first quarter as a
result of lower average assets under management.
Earnings and Statistics Table
First Quarter
-------------
2001 2002
---- ----
Reported Net Income (in millions) $ 111.4 $ 97.2
==================== ===================
Reported Diluted Earnings per share $ 0.48 $ 0.42
==================== ===================
Operating Margin 40.8% 42.0%
EBITDA (1) (in millions) $ 213.5 $ 177.6
EBITDA Margin 47.6% 54.1%
Average assets under management (in billions) $ 246.6 $ 188.8
Shareowner accounts (in millions) 6.3 5.7
(1) Earnings before interest, income taxes, depreciation and amortization
Stilwell, which includes Janus Capital Management LLC, Berger Financial
Group LLC, Nelson Money Managers Plc and approximately 33 percent of DST
Systems, Inc., reported $190.5 billion in assets under management as of March
31, 2002 compared to $192.2 billion as of December 31, 2001 and $205.9 billion
as of March 31, 2001. The decline in assets under management during the quarter
reflected net redemptions of $4.0 billion and market depreciation of $3.7
billion, partially offset by additional assets of approximately $6.0 billion
from Berger's acquisition of Enhanced Investment Technologies, Inc. (INTECH).
The net redemptions consisted of approximately $2.5 billion from money market
funds and approximately $1.5 billion from other products. Outflows from Janus'
retail funds were partially offset by net sales in the Janus Adviser Series,
Janus World Funds, Janus Aspen Series and Berger's value funds. Average assets
under management totaled $188.8 billion during first quarter 2002 compared to
$186.3 billion in fourth quarter 2001 and $246.6 billion in the prior year's
first quarter.
The lower level of average assets under management in first quarter 2002
versus 2001 resulted in a $120.2 million decline in revenues quarter-to-quarter
(to $328.3 million from $448.5 million). The lower revenues in first quarter
2002 resulted in a decrease in operating income to $138.0 million from $182.8
million in 2001. However, a 28 percent decline in operating expenses in first
quarter 2002 compared to 2001 (to $190.3 million from $265.7 million) exceeded
the percentage decline in revenues quarter-to-quarter, resulting in an improved
operating margin. The improved operating and EBITDA margins reflect the ongoing
efforts of Stilwell and its subsidiaries to maintain an efficient, flexible cost
structure.
Compensation expense declined as a result of reduced incentive compensation
and a decrease in the average number of employees quarter-to-quarter, partially
offset by severance costs associated with a work force reduction in Janus'
shareowner servicing staff of approximately 225 employees during first quarter
2002. Third party concession fees were lower due to a lower level of assets
under management through these distribution arrangements. Together, compensation
and third party concession fees represented approximately 37 percent of
revenues, which is consistent with 2001.
Marketing costs were approximately 50 percent lower in 2002 compared to
2001 as promotion efforts were scaled back to reflect the current operating,
market and performance environment. Depreciation and amortization decreased from
prior year due to lower amortization expense associated with goodwill and
non-amortizable identified intangible assets pursuant to the new accounting
guidelines as set forth in Statement of Financial Accounting Standards No. 141
"Business Combinations" (FAS 141) and Statement of Financial Accounting
Standards No. 142 "Goodwill and Intangible Assets" (FAS 142), as well as to
reduced capital expenditures over the last two years. If amortization of
goodwill and intangible assets were computed under FAS 141 and FAS 142 during
the three months ended March 31, 2001, Stilwell's amortization expense would
have been approximately $3.9 million lower, resulting in net income of
approximately $115.3 million, or 50(cent) per diluted share.
Equity in the net earnings of DST for the three months ended March 31, 2002
improved $1.6 million to $19.4 million. This improvement was largely
attributable to higher earnings in DST's financial services segment.
Consolidated DST revenues increased 15 percent, largely due to the inclusion of
revenue from EquiServe, in which DST acquired controlling ownership on March 30,
2001. Revenues also increased due to a higher number of shareowner accounts
serviced (totaling 78.4 million at March 31, 2002 versus 75.6 million at
December 31, 2001 and 73.5 million at March 31, 2001). DST's operating margin
declined quarter-to-quarter, primarily due to the inclusion of EquiServe during
2002.
Stilwell's interest expense increased by $8.4 million over prior year's
first quarter, primarily as a result of interest on Stilwell's $400 million
senior notes, and accreted interest and amortization of debt issue costs
associated with the zero-coupon convertible debt securities. Other income for
first quarter 2002 declined by $3.8 million from prior year largely as a result
of reduced interest income from lower average cash balances and interest rates.
The company's effective tax rate declined from 35.7 percent in first
quarter 2001 to 33.5 percent in the current year's first quarter. The lower
current year rate reflects the larger proportionate contribution to net income
from equity in net earnings of DST and reduced non-deductible amortization
expense in 2002 as noted above.
Landon H. Rowland, Stilwell's chairman, president and chief executive
officer, commented, "Our subsidiaries continue to stress better performance and
efficiency in operations. This ongoing commitment has produced margins that
translate into strong cash flow and, ultimately, improved shareholder value.
Each of our core operations is committed to the processes and business practices
that provide opportunities to add meaningful value for their shareholders and
our investors. With confidence in the management teams of Janus, Berger, Nelson
and DST, we look forward to improved performance and results in a challenging
economy and in the current markets."
Stilwell will present its first quarter 2002 earnings on April 25 at 3:00
p.m. EDT. All interested parties are invited to listen online at
www.stilwellfinancial.com or by calling (888) 664-0344, code "Stilwell 1st
Quarter Earnings Presentation," at least ten minutes prior to the 3:00 pm EDT
start of the presentation. The accompanying slides to the presentation are
expected to be available on the Stilwell Web site beginning the morning of April
25. A replay of the audio portion of the presentation will be available online
(and by telephone by calling (800) 642-1687, code #3703716) for one week after
the presentation.
About Stilwell Financial Inc.
Stilwell Financial Inc. is a diversified, global financial services company
with subsidiaries and affiliates operating in North America, Europe and Asia.
Stilwell owns approximately 92 percent of Janus Capital Management LLC,
approximately 90 percent of Berger Financial Group LLC, approximately 81 percent
of Nelson Money Managers Plc and approximately 33 percent of DST Systems, Inc.
(NYSE: DST).
This press release includes statements concerning potential future events
involving Stilwell Financial Inc. that could differ materially from the events
that actually occur. The differences could be caused by a number of factors
including those factors identified in Stilwell's Annual Report on Form 10-K for
the year ended December 31, 2001 on file with the Securities and Exchange
Commission (Commission file no. 001-15253). Stilwell will not update any
forward-looking statements made in this press release to reflect future events
or developments.
(Financial Information Attached)
###
STILWELL FINANCIAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(Unaudited)
Three months
ended March 31,
--------------------------------
2001 2002
-------------- --------------
Revenues:
Investment management fees $ 367.8 $ 270.5
Shareowner servicing fees 64.1 42.8
Other 16.6 15.0
-------------- --------------
Total 448.5 328.3
-------------- --------------
Operating expenses:
Compensation 99.3 70.8
Marketing and promotion 24.4 12.1
Third party concession fees 66.0 49.4
Depreciation and amortization 24.9 17.8
Professional services 12.6 7.8
Other 37.6 32.4
Severance, facility closing and other costs 0.9 -
-------------- --------------
Total 265.7 190.3
-------------- --------------
Operating Income 182.8 182.8
Equity in earnings of unconsolidated
affiliates 17.8 19.4
Interest expense (5.0) (13.4)
Other, net 6.8 3.0
-------------- --------------
Income before taxes and minority interest 202.4 147.0
Income tax provision 72.2 49.2
Minority interest in consolidated earnings 18.8 0.6
-------------- --------------
Net Income $ 111.4 $ 97.2
============== ==============
Per Share Data:
Weighted average Common shares
outstanding (in thousands) 219,042 222,243
Basic Earnings per share $ 0.51 $ 0.44
Weighted average Diluted Common shares
outstanding (in thousands) 224,666 224,590
Diluted Earnings per share $ 0.48 $ 0.42