-- Net Income of $155 Million, or $1.07 per Diluted Share for the Third Quarter --
-- Assets Under Management of $998 Billion--
Baltimore, Maryland – January 30, 2008 – Legg Mason, Inc. (NYSE: LM) today reported its operating results for the third fiscal quarter and nine months ended December 31, 2007. For the quarter, revenues were $1.19 billion, up 5% from $1.13 billion in the third quarter of fiscal 2007. Net income for the quarter was $154.6 million, or $1.07 per diluted share, representing an 11% and 12% decline, respectively, from $174.6 million, or $1.21 per diluted share, in the third quarter of fiscal 2007. The decline in net income included a previously announced charge of approximately $23 million ($0.16 per diluted share), after giving effect to related compensation adjustments and taxes, resulting from support for Asset Backed Commercial Paper ("ABCP") investments held by certain of the Company's liquidity funds. Cash income for the quarter (please refer to page 5) was $1.42 per diluted share, down 10% from the third quarter of fiscal 2007.
Assets Under Management (“AUM”) decreased to $998.5 billion, down 1% from $1.012 trillion at September 30, 2007, but representing an increase of 6% from $944.8 billion at December 31, 2006.
For the fiscal year to date, revenues were $3.6 billion, up 11% from the comparable period in fiscal 2007. Net income was $523.1 million, or $3.62 per diluted share, both representing a 10% increase from the comparable period. Cash income for the fiscal year to date was $4.68 per diluted share, up 8% from the corresponding nine months of fiscal 2007.
Announcement of New President and CEO
On January 28, 2008, the Board of Directors of Legg Mason, Inc. elected Mark R. Fetting President, Chief Executive Officer and member of the Board of Directors. Raymond A. “Chip” Mason, the Company’s founder and long-time Chairman, President and Chief Executive Officer, will continue to serve as non-executive Chairman.
Harold L. Adams, an independent director who chaired the Board of Directors’ Search Committee, said, “Following a very comprehensive due diligence process, the Board is unanimous in its conviction that Mark’s extensive industry experience, superb leadership skills, keen intellect and business acumen make him the ideal steward to lead Legg Mason into the future.
“As we congratulate Mark, the Board also wishes to greatly acknowledge the extraordinary leadership of Chip Mason, whose integrity and vision has so influenced Legg Mason’s success over the past 38 years. We look forward to his continued counsel as a member of the Board.”
Comments on Results in the Third Quarter of Fiscal Year 2008
Mr. Mason commented, “This past quarter was among the most volatile periods the market has experienced. The decline in the equity markets was harsh and caused substantial investor worry. Throughout the quarter, concerns about the dollar, a potential recession and the financial sector at large were widely felt around the world. The bond markets continued to show significant strain, with little reaction to government stimulation. Other than Treasury bonds, many markets were sluggish, or had limited bidding capacity.