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Omnicom Group Annual Report, Year Ended Dec 31, 1994

Filing Date
Filed March 29, 1995
Period End
December 31, 1994
Security
OMC
In the record · 2016–202610-K1110-Q338-K107

OMC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jul ’17Jul ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 29, 1995. Cited figures are marked; the original filing is the authoritative source.

Omnicom Group Inc. reported its 10-K for the fiscal year ended December 31, 1994.

Commissions and fees rose to $1,756,205 thousanda in 1994 from $1,516,475 thousand in 1993, and net income was $80,125 thousand, or $2.34 per primary share, after a cumulative effect of a change in accounting principle of $28,009 thousand (SFAS No. 112). Income before the accounting change was $108,134 thousand, or $3.15 per primary share, compared with $85,345 thousand in 1993. The company operates through three agency networks (BBDO Worldwide, DDB Needham Worldwide and TBWA International) plus its Diversified Agency Services division.

International operations generated 54% of 1994 billings, and the ten largest clients accounted for approximately 18% of 1994 billings. Total assets grew to $2,852,204 thousandb at year end from $2,289,863 thousand, largely reflecting acquisitions, higher receivables and higher payables. Accounts receivable rose $238.4 million and accounts payable rose $367.7 million.

Operating cash flow was $339,225 thousandc, and cash and cash equivalents ended the year at $228,251 thousand. The company had $370 million of committed credit lines, of which $32 million was used, and it issued DM 200 million Floating Rate Bonds in January 1995. Long-term debt fell to $187,338 thousand from $278,312 thousand after the 6.5% convertible debentures were converted into common stock.

The filing states that the company has no material pending legal proceedings beyond routine litigation. Management expects relatively favorable advertising growth in its major international markets, while noting that growth rates across its major markets are expected to vary in 1995. The quarterly dividend was $.31 per share, declared January 23, 1995.

02—Key points

Key Highlights

  1. Commissions and fees of $1,756,205 thousand in 1994, up from $1,516,475 thousand in 1993.
  2. Net income of $80,125 thousand ($2.34 per primary share) after a $28,009 thousand cumulative effect charge from adopting SFAS No. 112; income before the accounting change was $108,134 thousand ($3.15 per primary share).
  3. International operations generated 54% of 1994 billings, compared with 52% in 1993.
  4. Total assets rose to $2,852,204 thousand from $2,289,863 thousand, and shareholders' equity increased to $540,702 thousand from $402,186 thousand.
  5. Long-term debt declined to $187,338 thousand from $278,312 thousand after the 6.5% convertible debentures ($100 million) converted into common stock.
  6. Cash and cash equivalents increased to $228,251 thousand, and operating cash flow was $339,225 thousand.
  7. Quarterly dividend of $.31 per share declared January 23, 1995, following $1.24 in dividends declared per share in 1994.

03—Questions

Frequently Asked Questions

  1. How did Omnicom's revenue and earnings perform in 1994?

    Commissions and fees reached $1,756,205 thousand, up from $1,516,475 thousand in 1993. Income before the change in accounting principles was $108,134 thousand, or $3.15 per primary share, compared with $85,345 thousand in 1993. After a $28,009 thousand cumulative effect charge, net income was $80,125 thousand, or $2.34 per primary share.

  2. What drove the increase in revenue?

    Domestic commissions and fees rose 11.4%, of which 1.4% came from acquisitions net of divestitures and 10.0% from net new business gains and higher spending by existing clients. International revenues increased 20.3%, including an 8.7% contribution from acquisitions net of divestitures and a 2.3% benefit from the weaker U.S. dollar.

  3. How concentrated is the client base?

    The ten largest clients accounted for approximately 18% of 1994 billings, and the largest single client accounted for less than 5% of 1994 billings. The filing notes that most of the top ten clients had been clients for more than ten years.

  4. What is Omnicom's liquidity and debt position?

    The company had $370 million in committed credit lines at year end, of which $32 million was used. Long-term debt was $187,338 thousand at December 31, 1994. Management believes its lines of credit and cash flows are adequate for its short-term and long-term cash requirements.

  5. What did the filing say about the outlook?

    Management said current economic conditions in its major markets indicate varying growth rates in advertising expenditures in 1995, and it anticipates relatively favorable growth rates in its major international markets.

04—Continue

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