Published: May 22, 2001
NEW YORK CITY – Sotheby’s Holdings, Inc., the parent company of Sotheby’s worldwide auction, art-related financing and real estate activities, announced results for the first quarter ended March 31.
For the first quarter of 2001 the ompany reported total revenues of $57.5 million, compared to $54.8 for the same period a year ago. Net loss for the first quarter of 2001 was $22.5 million, or ($0.38) per diluted share, compared to net loss of $29.1 million, or ($0.49) per diluted share for 2000. Due to the seasonal nature of the art auction market, auction sales in the first quarter have historically represented approximately nine to 13 percent of total sales for the year and the first quarter has historically been a loss period for the company.
During the first quarter of 2001, the company recorded a pre-tax special charge of $0.8 million, or ($0.01) per diluted share, for legal and professional fees relating to the Department of Justice antitrust investigation and related matters. As the civil antitrust claims and criminal charges against the Company have been settled or dismissed, it is anticipated that special charges incurred in 2001 will be significantly less than those taken in 2000.
“Auction sales for the first quarter of 2001 totaled $216.7 million, an increase of $40.7 million compared to the first quarter of 2000,” said William F. Ruprecht, President and Chief Executive Officer of Sotheby’s Holdings, Inc. “This increase reflects the rescheduling of the London Impressionist and Contemporary Art sales from December 2000 to February 2001, as well as higher levels of single-owner sales. We have had several successful auctions in the first quarter, including the Scientific Library of Joseph Freilich which brought $10.7 million.”
First quarter 2001 operating revenues of $57.5 million increased by $2.7 million, or five percent, as a result of increased contributions from our auction business. This was partially offset by slightly decreased contributions from our Real Estate and Financial Services businesses. Including special charges, operating expenses decreased $11.3 million to $87.0 million, largely due to decreased Internet related expenses as a result of the company’s Restructuring Plan.
According to Ruprecht, “the civil antitrust claims and criminal charges, which loomed so heavily over the Company last year, have now been settled or dismissed. Sotheby’s led the auction houses with Impressionist & Modern sales last week, which brought $140.7 million despite unprecedented competitive pressure. We have announced the opening of Olympia, a new salesroom in West London, which will allow us to develop our position in the middle-markets. We have seen strong results in our salesrooms this spring, where the quality of the property that has been consigned to us testifies to the strength of Sotheby’s name, expertise and experience. Sothebys.com, working with a new management team and our refocused strategy, will bring expenses in line with revenues as a means to achieve profitability. The company is continuing to focus on cost cutting opportunities within all aspects of its businesses and, in particular, the live and Internet parts of its auction segment.”
Internet-related expenses for the first quarter 2001 were $7.8 million, representing a $11.4 million, or 59 percent decrease, from the same period a year ago. The impact of the Internet related operating loss was ($0.06) per diluted share, as compared to ($0.19) a year earlier. The company anticipates that Internet related expenditures will be in the range of $27.0 million in 2001, compared to $56.0 million in 2000, or a decrease of approximately $29.0 million (52 percent).
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