UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT  
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

May 12, 2006  

(Date of report)

 

May 8, 2006  

(Date of earliest event reported)

 

Sotheby's Holdings, Inc.  

(Exact name of registrant as specified in its charter)

 

Michigan
1-9750
38-2478409
(State or other
jurisdiction of
incorporation or
organization)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

 

38500 Woodward Avenue, Suite 100
Bloomfield Hills, Michigan
48303
(Address of principal executive offices)
(Zip Code)
   

(248) 646-2400  

(Registrant's telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 1.01 Entry into a Material Definitive Agreement.

 

Shareholder Approval of Amended and Restated Restricted Stock Plan

 

At the Company’s 2006 Annual Meeting of Shareholders on May 8, 2006, the shareholders of Sotheby’s Holdings, Inc., a Michigan corporation (the “Company”), approved the Company’s Amended and Restated Restricted Stock Plan (the “Restricted Stock Plan”). The Restricted Stock Plan provides for the issuance of restricted stock awards in the form of the Company’s Class A Limited Voting Common Stock to employees of the Company and its subsidiaries.

 

The principal features of the Restricted Stock Plan are summarized under the caption “Proposal 5-Approval of Amended and Restated Restricted Stock Plan” in the Company’s definitive Proxy Statement for such meeting, filed with the Securities and Exchange Commission on April 15, 2006 (the “2006 Proxy Statement”). The foregoing description and the 2006 Proxy Statement summary of the Plan are qualified in their entirety by reference to the Restricted Stock Plan itself, a copy of which has been previously filed with the Securities and Exchange Commission on May 9, 2006 as Exhibit 10.1 to the Company’s Registration Statement on Form S-8 and is hereby incorporated by reference in this Form 8-K as Exhibit 10.1.

 

Amendment of 1997 Stock Option Plan

 

On March 31, 2006, the Board of Directors of the Company approved an amendment to the Company’s 1997 Stock Option Plan, as amended (the “Stock Option Plan”), the effectiveness of which was contingent upon shareholder approval of the Restricted Stock Plan, which occurred on May 8, 2006. The Stock Option Plan amendment, among other things (i) reduces the number of shares of the Company’s Class A Limited Voting Common Stock reserved for issuance under the Stock Option Plan by 6,955,500 shares, from 14,900,000 to 7,944,500, of which 500,830 shares remain available for future grants, and (ii) modifies certain provisions of the Stock Option Plan in connection with the Company’s anticipated reincorporation in the State of Delaware. The foregoing description of this amendment is qualified in its entirety by reference to the amendment itself, a copy of which is filed as Exhibit 10.2 to this Form 8-K and is incorporated by reference herein.

 

Grant of Restricted Stock to Chief Executive Officer

 

On May 9, 2006, the Compensation Committee of the Board of Directors awarded 300,000 shares of restricted stock to William F. Ruprecht, its President and Chief Executive Officer. This award was made pursuant to the requirements of the employment arrangement between the Company and Mr. Ruprecht, the material terms of which are described in the Company’s 2006 Proxy Statement under the caption “Compensation of Executive Officers – Employment Agreements and Related Matters.” A copy of the Letter Agreement between the Company and Mr. Ruprecht and the related Terms of Employment was filed with the Securities and Exchange Commission on May 9, 2006 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q.

 

Item 2.02 Results of Operations and Financial Condition

 

On May 8, 2006, the Company issued a press release discussing its results of operations for the quarter ended March 31, 2006. This press release is furnished as Exhibit 99.1 to this Form 8-K.

 

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

 

Jeffrey H. Miro did not stand for reelection as a Director of the Company at the Company’s Annual Meeting of Shareholders on May 8, 2006 and, accordingly, retired from the Board of Directors on that date.

 

Item 8.01 Other Events.

 

As reported in the Company’s Form 10-Q for the period ended March 31, 2006, the Company has recently experienced a significant level of employee stock option exercises, when compared to prior periods. As a result, management expects weighted average diluted shares outstanding for the quarter ended June 30, 2006 to be in the range of 61 million to 61.5 million. Management anticipates continuing stock option exercises in the future. (See statement on Forward Looking Statements.)

 

 

 

 


Item 9.01 Financial Statements and Exhibits  

 

 

 

  (c) Exhibits    
     

 

10.1

Sotheby’s Holdings, Inc. Amended and Restated Restricted Stock Plan, incorporated  by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on May 9, 2006.

     
  10.2 Eighth Amendment to the Sotheby’s Holdings, Inc. 1997 Stock Option Plan, as amended, dated May 8, 2006   
     
  99.1 Sotheby’s Holdings, Inc. earnings press release for the quarter ended March 31, 2006

 

FORWARD LOOKING STATEMENTS

 

This Form 8-K contains certain forward looking statements; as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, relating to future events and the financial performance of the Company. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that the actual events or performance will differ materially from such predictions. Major factors which the Company believes could cause the actual results to differ materially from the predicted results in the forward looking statements include, but are not limited to, the factors listed in the Company ’ s Form 10-Q for the period ended March 31, 2006 under Item 1A, “Risk Factors,” which are not ranked in any particular order.

 

 

 


 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  SOTHEBY'S HOLDINGS, INC.
     

 

By:

/s/ Michael L. Gillis

     
   

Michael L. Gillis
Senior Vice President,
Controller and Chief
Accounting Officer

     
  Date: May 12, 2006

 

 


EXHIBIT 10.2

 

 

  EIGHTH AMENDMENT TO

SOTHEBY'S HOLDINGS, INC. 1997 STOCK OPTION PLAN

 

THIS EIGHTH AMENDMENT to the Sotheby's Holdings, Inc. 1997 Stock Option Plan ("Eighth Amendment"), dated the eighth day of May, 2006, is adopted by Sotheby's Holdings, Inc. (the "Corporation").

RECITALS:

A.                    The Sotheby's Holdings, Inc. 1997 Stock Option Plan was adopted by the Board of Directors of the Corporation on April 30, 1996 and approved by the shareholders of the Corporation at the Corporation's 1996 Annual Meeting of Shareholders on June 19, 1996. The Plan has been amended from time to time. Upon reincorporation of the Corporation in the State of Delaware by merger of the Corporation into a wholly-owned subsidiary of the Corporation organized under the laws of the State of Delaware on or after May 8, 2006, the Plan shall be known as the Sotheby’s 1997 Stock Option Plan (the “Plan”).

B.                   Pursuant to Section 8.1 of the Plan, the Corporation has the authority to amend the Plan. The Corporation desires to and does hereby amend the Plan, as hereinafter set forth, to reduce the number of shares of Common Stock with respect to which Options may be granted under the Plan from 14,900,000 shares to 7,944,500 shares and to make such other changes as the Corporation desires. As of April 1, 2006, 500,830 of the total 7,944,500 shares of Common Stock are available for future Option grants. The remaining 7,443,670 shares of Common Stock are already the subject of Options previously granted or exercised under the Plan

 

  NOW, THEREFORE, the Plan is hereby amended as follows:
     
  1. Section 2.1 is amended in its entirety by substituting the following:

 

 


 

 

   
“ 2.1       "Articles of Incorporation" means the Articles of Incorporation of the Corporation, or other similar document of any successor to the Corporation, as the same may be amended from time to time.”
     
  2. Section 2.5 of the Plan is deleted in its entirety.
     
  3. Section 2.8 is amended in its entirety by substituting the following:

 

 

“2.8      Common Stock means the Class A Limited Voting Common Stock of the Corporation. Upon the reincorporation of the Corporation in the State of Delaware, Common Stock means common stock of the Delaware corporation, as successor to the Corporation, par value $0.01 per share.”

 

 

4.

Section 2.10 is amended in its entirety by substituting the following:

 

“2.10     Corporation" means Sotheby's Holdings, Inc, a Michigan corporation, and any successor in interest to the business of the Corporation that has, by agreement, adopted the Plan.”

 

 

5.

Section 2.19 is amended in its entirety by substituting the following:

 

“2.19      Fair Market Value means the value of each share of Option Stock, determined for a particular date as follows:

 

(a)           if the Common Stock is listed or admitted for trading on any United States national securities exchange, the value of each share of Option Stock shall be the closing price per share of Common Stock on such exchange (or, if listed on more than one United States exchange, the principal said exchange) on the relevant Valuation Date hereunder;

 

(b)           if paragraph (a) is not applicable, the value of each share of Option Stock shall be the fair market value as determined by the Committee, in good faith and in accordance with uniform principles consistently applied, on the last day of the relevant Fiscal Year immediately preceding the relevant date hereunder, or such other date as the Committee shall select.

 

(c)           for purposes of determining taxation of Options granted under the UK Sub Plan, (or the exercise thereof), the definition of fair market value may be adjusted as required by the Shares Valuation Division of the UK Inland Revenue.

 

 

6.

Section 2.25 is amended in its entirety by substituting the following:

 

“2.25      Option Stock means those shares of Common Stock made the subject of any Option granted pursuant to the Plan.”

 

 

7.

Section 4.1 is amended in its entirety by substituting the following:

 

 

“4.1      Shares Subject to the Plan. The shares of Option Stock issuable under

 

 

2

 

 


 

the Plan shall be shares of the Corporation’s authorized but unissued or reacquired Common Stock. Subject to adjustment as provided in Section 8.3 hereof, the aggregate number of shares of Common Stock that may be issued by the Corporation upon the exercise of Options under the Plan is reduced from 14,900,000 to 7,944,500 shares. The aggregate number of shares of Common Stock with respect to which Options may be granted at any time shall not exceed the relevant number of shares of Common Stock remaining available for issuance under the Plan. After termination of the Plan, the number of shares of Common Stock reserved for purposes of the Plan from time to time shall be only such number of shares as are issuable under then outstanding Options.”

 

 

8.

Section 6.1 of the Plan is amended in its entirety by substituting the following:

 

“ 6.1       Power to Grant Options. The maximum aggregate number of shares of Common Stock with respect to which Options may be granted to any one Employee during a Fiscal Year shall be limited to 200,000 shares. For purposes of calculating the number of shares with respect to which Options have been granted to an Employee for any Fiscal Year, any shares subject to an Option that is granted and subsequently cancelled or surrendered during such Fiscal Year shall continue to be counted against the maximum number of shares which may be granted to such Employee pursuant to the Plan during such Fiscal Year. Notwithstanding the foregoing, to the extent an adjustment is made to the number of shares subject to an Option to reflect a change in the corporate capitalization of the Corporation, the additional shares, if any, subject to such Option shall not be counted against the maximum number of shares for which Options may be granted to the applicable Optionee. Subject to this maximum share limitation, the Committee may grant to such Employees as the Committee may select in accordance with Article 5 hereof, Options entitling the Optionee to purchase shares of Common Stock from the Corporation in such quantity, and on such terms and subject to such conditions not inconsistent with the terms of the Plan, as may be established by the Compensation Committee at the time of grant or pursuant to applicable resolution of the Compensation Committee.”

 

 

9.

Sections 8.3(c) and (d) are amended in their entirety by substituting the following:

 

“(c)         The shares with respect to which Options may be granted hereunder are shares of Common Stock of the Corporation as presently constituted, but if, and whenever, prior to the delivery by the Corporation of all of the shares which are subject to the Options or rights granted hereunder, the Corporation shall effect a subdivision or consolidation of shares or other capital readjustments, the payment of a stock dividend or other increase or reduction of the number of outstanding shares of Common Stock, without receiving compensation therefore in money, services or property, the number of shares subject to the Plan shall be proportionately adjusted and the number of shares with respect to which Options granted hereunder may thereafter be exercised shall:

 

(i)             in the event of an increase in the number of outstanding shares, be proportionately increased, and the cash

 

3

 

 


 

consideration (if any) payable per share shall be proportionately reduced; and

 

(ii)            in the event of a reduction in the number of outstanding shares, be proportionately reduced, and the cash consideration (if any) payable per share shall be proportionately increased.

 

(d)           If the Corporation merges with one or more corporations, or consolidates with one or more corporations and the Corporation shall be the surviving corporation, thereafter, upon any exercise of Options granted hereunder, the recipient shall, at no additional cost (other than the Exercise Price and any tax withholding amounts) be entitled to receive (subject to any required action by shareholders) in lieu of the number of shares as to which such Options shall then be exercisable the number and class of shares of stock or other securities to which the recipient would have been entitled pursuant to the terms of the agreement of merger or consolidation, if immediately prior to such merger or consolidation the recipient had been the holder of record of the number of shares of Common Stock of the Corporation equal to the number of shares as to which such Options shall be exercisable. A reorganization, merger or consolidation in which the Corporation is not the surviving corporation, or a liquidation or dissolution of the Corporation, shall automatically and without any further action cause any outstanding Options which have not yet become exercisable in accordance with Article 7 to terminate and be cancelled as of the effective date of such reorganization, merger or consolidation, or dissolution or liquidation of the Corporation, unless the agreement of reorganization, merger or consolidation otherwise provides.”

 

 

10.

Section 11.4 is amended in its entirety by substituting the following:

 

“11.4      Name of Plan. This Plan shall be known as the Sotheby’s Holdings, Inc. 1997 Stock Option Plan. Upon reincorporation of the Corporation in the State of Delaware, the Plan shall be known as the Sotheby’s 1997 Stock Option Plan.”

 

 

11.

Section 11.13 is amended in its entirety by substituting the following:

 

“11.13      Choice of Law. All determinations made and actions taken pursuant to the Plan shall be governed by the internal laws of the State of New York and construed in accordance therewith.”

 

 

12.

Section 12.1(b) is amended in its entirety by substituting the following:

 

“(b)          Company means Sotheby’s Holdings, Inc. Upon reincorporation of the Company in the State of Delaware, Company means Sotheby’s, a Delaware corporation.”

 

 

13.

Section 12.1(h) is amended in its entirety by substituting the following:

 

 

 

4

 

 


 

 

“(h) Shares mean shares of the Class A Limited Voting Common Stock in the Company, which satisfy the provisions of paragraphs 10 through 14 of Schedule 9. Upon reincorporation of the Company in the State of Delaware, Shares mean shares of common stock of the Delaware corporation, as successor to the Company, which shares also satisfy the provision of paragraphs 10 through 14 of Schedule 9.”

 

 

14.

The effective date of this Amendment is May 8, 2006.

 

IN WITNESS WHEREOF, this Amendment is hereby executed as of the day and year first above written.

 

  SOTHEBY'S HOLDINGS, INC.
       
  By: /s/ Susan Alexander            
       
  Its: Executive Vice President, Worldwide
Head of Human Resources 		 

 

 

5

 

 

 

 

 

 

EXHIBIT 99.1

 

 

 

News Release
Press Department:
Diana Phillips
Matthew Weigman
(212) 606-7176
Investor Relations:
Jennifer Park
(212) 894-1023

 

SOTHEBY’S HOLDINGS, INC. ANNOUNCES 2006 FIRST QUARTER RESULTS

 

•    First Quarter Revenues increase 30% to $96.0 million

•     First Quarter Operating Income from Continuing Operations improves to $1.8
million from an Operating Loss of ($8.6) million in the prior period

•     Sotheby’s sells the world’s second most expensive painting at auction, Pablo
Picasso’s Dora Maar au Chat, for $95.2 million

 

 

May 8, 2006, New York -- Sotheby’s Holdings, Inc. (NYSE: BID), the parent company of Sotheby’s worldwide auction, private sales and art-related financing activities, today announced results for the first quarter ended March 31, 2006.

 

For the quarter ended March 31, 2006, the Company reported revenues of $96.0 million, a $22.0 million, or 30%, increase over the prior first quarter, primarily due to higher auction commission revenues attributable to a 44% increase in Aggregate Auction Sales (aggregate hammer price of property sold at auction, including buyer’s premium), as well

 


 

 

as a 49% increase in private sale commissions. Also contributing to the improvement versus the prior year is a $2.2 million, or 184%, increase in Finance revenues primarily resulting from a higher level of client loans during the period. The Company’s loss from continuing operations for the first quarter was ($3.9) million, or ($0.07), per diluted share compared to ($9.7) million, or ($0.16), per diluted share for the prior period, a 60%, or $5.8 million improvement. This growth, which is largely due to the increase in revenues highlighted above, is partially offset by certain expense increases resulting from a variety of factors including: variable increases in performance based compensation and direct costs of sales, both directly related to the overall increase in revenues; the Company’s strategic investments in certain growth areas of the business, especially, Asian, Russian and Contemporary Art; investment in a number of new client service initiatives; unusually high costs for litigation accruals, client goodwill gestures and authenticity claims; and inflationary increases for such things as limited salary increases, travel, and facility related costs.

 

Because of the seasonal nature of the art auction market, Auction Sales in the first quarter have historically only represented approximately 9% - 13% of annual Auction Sales, and the first quarter has historically been a loss period for the Company. As a result, historically, first quarter results have not been indicative of expected full year results.

 

“As seen in these excellent first quarter results, 2006 has begun very strongly,” said Bill Ruprecht, President and Chief Executive Officer of Sotheby’s Holdings, Inc. “Numerous collecting categories across the globe are experiencing growth, with the most important contributors to the first quarter being London’s highest Impressionist and Modern Art and Contemporary Art sales in its history; historic highs for Old Master Paintings and very successful Asian sales in New York.”

 

“A healthy and vibrant art market is clearly continuing into the second quarter across a broad range of categories,” Mr. Ruprecht continued. “Most noteworthy thus far is the outstanding result for Picasso’s Dora Maar au Chat , which brought $95.2 million,

 

2

 


 

 

becoming the second highest price for a painting sold at auction. This masterpiece was sold in the Impressionist series of sales which brought $248.3 million, representing Sotheby’s highest total since 1990 and leading this market in New York. Also, half the lots in the evening sale sold for $1 million or more.”

 

Second Quarter Sales

In addition to last week’s outstanding sales of Impressionist and Modern Art in New York, other auctions have performed extremely well, particularly in the emerging markets. Last month, Sotheby’s Hong Kong held a successful series of sales, selling for the first time in the spacious Hong Kong Convention and Exhibition Center. The sales brought a total of $108.5 million, above the low estimate of $100.6* million. Numerous records were broken, including records for a Chinese oil painting, an Imperial Chinese work of art, a Qing textile and a pink diamond at auction. Also, the Chinese Contemporary Art sale realized $17.0 million, the highest total ever at Sotheby’s for such a sale.

 

Also in April, in New York, Sotheby’s held an exceptional combined Russian Paintings and Works of Art sale. The sale totaled $54.4 million, surpassing its pre-sale high estimate of $46.3* million and bringing the highest total ever for a sale of Russian Art worldwide. Highlighting the sale was Nikolai Roerich’s Lao-tze , which sold for $2.2 million, more than seven times the high estimate of $300,000* and a record for the artist at auction. Other auction records were established for Yakovlev, Bogdanov-Belsky, Anisfeld, Vereschchagin and Bogolyubov and nine lots were sold for more than $1 million each.

Upcoming Sales

Our spring sales of Contemporary Art begin on Wednesday in New York. The evening sale will feature Roy Lichtenstein’s rare and iconic pop painting Sinking Sun which stands at the center of Lichtenstein’s highly acclaimed comic strip paintings for which the artist received international fame in the early 1960s. The painting is estimated to realize $18/$22 million*. Another highlight is a classic work by Willem de Kooning, Untitled

 

3

 


 

 

XVI from 1975. For some time, de Kooning focused on sculpture and drawing, but in 1975 he ended this long period of abstinence from painting and produced twenty large-scale canvases of explosive, vibrant color executed in lush, sensuous paint strokes. This particular canvas, Untitled XVI , is estimated to sell for $6.5/8.5* million. The entire sale is estimated to realize $125.7 to $170.5* million.

 

On May 24 th in New York, John Singer Sargent’s Cashmere Shawl highlights Sotheby’s American paintings sale . This painting belongs to a series of highly celebrated works produced during Sargent’s summer retreats to the Italian Alps and is estimated to bring $3/$5* million. Other notable works include paintings by Normal Rockwell, Childe Hassam and Andrew Wyeth in a sale that is expected to realize $42 to $63* million.

 

On May 31 st , Sotheby’s London is scheduled to hold its spring Russian Art sale which features paintings by Ivan Konstantinovich Aivazovsky, Konstantin Korovin and Isaac Ilich Levitan as well as exemplary Russian Imperial porcelain and Faberge works. The sale is expected to bring $28 to $40* million.

 

Among the highlights of our spring Impressionist and Modern Art sales in London this June is a major Modigliani portrait, Jeanne Hébuterne (au chapeau) which is estimated to bring $15/$21* million, an Impressionist masterpiece by Renoir, Femmes dans un jardin which is estimated to bring $7/$10* million, important fauve works by Vlaminck and Dufy, and a group of Impressionist and Post-Impressionist paintings from a private English collection.

 

On Flag Day, June 14 th , in New York, Sotheby’s is selling four battle flags that were captured during the American Revolution that have returned to America after 225 years. Taken as trophies of battle by one of Britain’s most notorious commanders, Lieutenant Colonel Banastre Tarleton, during conflicts in Bedford, New York in 1779 and at Waxsaws on the North Carolina/South Carolina border in 1780, the flags are estimated to sell for $4 to $10* million.

 

4

 


 

 

 

In July in London, we are offering for sale what is arguably the most important book in English literature, the First Folio edition of Shakespeare’s plays. Published seven years after Shakespeare's death, this seminal volume contains a total of 36 plays, 18 of which had never previously been printed and – were it not for their appearance here – might otherwise have been lost to posterity. Some 750 copies were printed and about a third of these survive, mostly incomplete. The folio is expected to achieve $4/$6* million.

 

* Estimates do not include buyer’s premium.

 

About Sotheby’s Holdings, Inc.

Sotheby’s Holdings, Inc. is the parent company of Sotheby’s worldwide auction businesses, art-related financing and private sales activities. The Company operates in 34 countries, with principal salesrooms located in New York and London. The Company also regularly conducts auctions in 13 other salesrooms around the world, including Australia, Hong Kong, France, Italy, the Netherlands, Switzerland and Singapore. Sotheby’s Holdings, Inc. is listed on the New York Stock Exchange under the symbol BID.

 

Forward-looking Statements

This release contains certain “forward-looking statements” (as such term is defined in the Securities and Exchange Act of 1934, as amended) relating to future events and the financial performance of the Company. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that the actual events or performances will differ materially from such predictions. Major factors, which the Company believes could cause the actual results to differ materially from the predicted results in the “forward-looking statements” include, but are not limited to, the overall strength of the international economy and financial markets, political conditions in various nations, competition with other auctioneers and art dealers, the amount of quality property being consigned to art auction houses and the marketability at auction of such property.

 

Financial Tables Follow

All Sotheby’s Press Releases and SEC filings are available on our web site at www.sothebys.com. In addition, summary of first quarter 2006 highlights and most recent investor presentation are also available at http://www.shareholder.com/bid/releasesE.cfm .

 

Sotheby’s Holdings, Inc.’s earnings conference call will take place on Tuesday, May 9, 2006, at 9:00 AM EST. Domestic callers should dial: 800-866-5043 and international callers should dial: 303-262-2193. The call reservation number is 11060257. The conference replay will be available for two weeks after the call at 800-405-2236 or 303-590-3000. Enter passcode 11060257#.

To listen to the conference call via web cast, please go to www.actioncast.acttel.com and enter the passcode 33771 when prompted. You will need Windows Media Player or Real Player to access the call. Please download either of these programs before the call begins at 9:00 AM on May 9 th . The web cast will be available for replay for two weeks after the call.

 

 

 

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APPENDIX A

 

 

SOTHEBY’S HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENTS

(UNAUDITED)

(Thousands of dollars, except per share data)

 

       
Three Months Ended
 

 

 

 

 

March 31,

 

 

 

March 31,

 

 

 

 

 

 

2006

 

 

 

 

2005

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Auction and related revenues

 

 

 

$

91,724

 

 

 

$

72,175

 

Finance revenues

 

 

 

 

3,432

 

 

 

 

1,208

 

License fee revenues

 

 

 

 

470

 

 

 

 

176

 

Other revenues

 

 

 

 

378

 

 

 

 

468

 

Total revenues

 

 

 

 

96,004

 

 

 

 

74,027

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Direct costs of services

 

 

 

 

12,882

 

 

 

 

10,229

 

Salaries and related costs

 

 

 

 

43,970

 

 

 

 

39,519

 

General and administrative expenses

 

 

 

 

32,029

 

 

 

 

27,184

 

Depreciation and amortization expense

 

 

 

 

5,370

 

 

 

 

5,646

 

Total expenses

 

 

 

 

94,251

 

 

 

 

82,578

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

1,753

 

 

 

 

(8,551

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

519

 

 

 

 

1,609

 

Interest expense

 

 

 

 

(8,530

)

 

 

 

(8,142

)

Other income

 

 

 

 

246

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before taxes

 

 

 

 

(6,012

)

 

 

 

(15,079

)

Equity in earnings of investees, net of taxes

 

 

 

 

107

 

 

 

 

349

 

Income tax benefit

 

 

 

 

(2,002

)

 

 

 

(4,987

)

Loss from continuing operations

 

 

 

 

(3,903

)

 

 

 

(9,743

)

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from discontinued operations before taxes

 

 

 

 

(115

)

 

 

 

44

 

Income tax (benefit) expense

 

 

 

 

(41

)

 

 

 

22

 

(Loss) income from discontinued operations

 

 

 

 

(74

)

 

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

($3,977

)

 

 

 

($9,721

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share:

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

 

 

 

($0.07

)

 

 

 

($0.16

)

(Loss) earnings from discontinued operations

 

 

 

 

(0.00

)

 

 

 

0.00

 

Basic and diluted loss per share

 

 

 

 

($0.07

)

 

 

 

($0.16

)

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding

 

 

 

 

57,119

 

 

 

 

62,594