UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2003
Commission File Number 1-9750
Sotheby’s Holdings, Inc.
(Exact name of registrant as specified in its charter)
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Michigan |
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38-2478409 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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38500 Woodward Avenue, Suite 100 |
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48304 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (248) 646-2400 |
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o
As of November 10, 2003, there were outstanding 45,048,339 shares of Class A Limited Voting Common Stock, par value $0.10 per share, and 16,646,150 shares of Class B Common Stock, par value $0.10 per share, of the Registrant. Each share of Class B Common Stock is freely convertible into one share of Class A Limited Voting Common Stock.
TABLE OF CONTENTS
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Consolidated Balance Sheets at September 30, 2003, December 31, 2002 and September 30, 2002 |
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Exhibit 31.1 |
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Exhibit 31.2 |
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Exhibit 32.1 |
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Exhibit 32.2 |
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Exhibit 99.1 |
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Exhibit 99.2 |
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2
SOTHEBY’S HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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For the Three Months |
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For the Nine Months |
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2003 |
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2002 |
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2003 |
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2002 |
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(Thousands of dollars, except per share data) |
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Revenues: |
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Auction and related revenues |
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$ |
29,006 |
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$ |
36,130 |
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$ |
174,719 |
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$ |
184,270 |
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Other revenues |
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13,271 |
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12,230 |
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34,213 |
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36,569 |
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Total revenues |
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42,277 |
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48,360 |
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208,932 |
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220,839 |
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Expenses: |
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Direct costs of services |
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5,767 |
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7,107 |
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29,856 |
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35,604 |
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Salaries and related costs |
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34,496 |
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34,893 |
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109,209 |
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108,945 |
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General and administrative expenses |
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25,594 |
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24,749 |
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74,126 |
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72,049 |
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Depreciation and amortization expense |
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6,883 |
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6,091 |
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20,478 |
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17,823 |
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Retention costs |
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1,807 |
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5,761 |
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8,150 |
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18,311 |
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Net restructuring charges |
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(308 |
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(98 |
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5,033 |
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(1,533 |
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Special charges |
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1,195 |
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20,872 |
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2,571 |
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19,153 |
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Total expenses |
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75,434 |
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99,375 |
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249,423 |
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270,352 |
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Operating loss |
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(33,157 |
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(51,015 |
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(40,491 |
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(49,513 |
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Interest income |
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356 |
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24 |
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1,984 |
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1,934 |
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Interest expense |
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(8,986 |
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(5,379 |
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(24,007 |
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(17,079 |
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Other income |
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219 |
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513 |
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606 |
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597 |
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Loss before taxes |
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(41,568 |
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(55,857 |
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(61,908 |
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(64,061 |
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Income tax benefit |
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(14,133 |
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(12,882 |
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(21,049 |
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(15,836 |
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Net loss |
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$ |
(27,435 |
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(42,975 |
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(40,859 |
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(48,225 |
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Basic and diluted loss per share |
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$ |
(0.45 |
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(0.70 |
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(0.66 |
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(0.78 |
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Basic and diluted weighted average shares outstanding (in millions) |
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61.6 |
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61.5 |
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61.6 |
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61.5 |
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See accompanying Notes to Consolidated Financial Statements
3
SOTHEBY’S HOLDINGS, INC.
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September 30, |
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December 31, |
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September 30, |
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(UNAUDITED) |
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(UNAUDITED) |
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(Thousands of dollars) |
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ASSETS: |
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Current Assets: |
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Cash and cash equivalents |
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$ |
6,616 |
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$ |
48,655 |
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$ |
17,471 |
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Restricted cash |
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2,997 |
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13,637 |
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3,800 |
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Accounts receivable, net of allowance for doubtful accounts of $7,013, $8,073 and $8,346 |
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120,374 |
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276,729 |
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193,047 |
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Notes receivable and consignor advances, net of allowance for credit losses of $1,565, $1,573 and $1,321 |
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45,260 |
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