NEW YORK, Feb. 28, 2013 (GLOBE NEWSWIRE) -- Sotheby's (NYSE:BID) today reported financial results for the fourth quarter and full year ended December 31, 2012.
For the full year 2012, Sotheby's reported total revenues of $768.5 million, a $63.3 million (8%) decline from the prior year. This decrease is largely attributable to a $79.4 million (11%) drop in auction commission revenues resulting from a 10% reduction in net auction sales, as 2011 included a record level of sales from single owner collections. The decline in auction commission revenues is partially offset by a $6.8 million (10%) improvement in private sale commission revenues and a $5.7 million (47%) increase in finance revenues.
Sotheby's reported net income of $108.3 million, or $1.57 per diluted share, in 2012, a $63.1 million (37%) decrease from 2011 partially due to the aforementioned reduction in revenues. In late 2012, Sotheby's refinanced its long-term bonds by ten years, to 2022, and, as a result, incurred a $15.0 million pre-tax bond redemption loss ($8.3 million after taxes, or $0.12 per diluted share) that negatively impacted the comparison to the prior year. This long-term refinancing will reduce Sotheby's financing costs by approximately $5 million per year, beginning in 2014. In addition, in December, Sotheby's extended and improved its credit facility, further improving its liquidity and lowering its cost of funds. The comparison of 2012 net income to the prior year is also unfavorably impacted by a non-recurring $13.6 million tax benefit recognized in 2011 due to the reversal of a valuation allowance against certain of Sotheby's deferred tax assets."Consolidated sales * in 2012 were a robust $5.4 billion as healthy bidding continued around the world for great works of art," said Bill Ruprecht, Chairman, President and Chief Executive Officer. "Our operating results reflect some significant successes, a stiff comparison to one of the best years in Sotheby's history a year ago, and a very competitive climate for high-end consignments. Overall, I remain confident in the marketplace." Private sales *, an increasingly important part of Sotheby's business, totaled a record $906.5 million, an 11% increase. And as of the end of 2012, the Company's finance segment loan portfolio balance was $425.1 million, almost double the prior year balance of $223.0 million, and near peak levels. "Sotheby's ended the year with a very strong balance sheet and we are continuing to invest in our business," said Ruprecht. "As a result, 2012 was a year of meaningful progress in the development of our client-focused strategy. We have totally reengineered our post-sale client services in our key sales centers of London and New York and made an array of enhancements to facilitate and personalize the client experience. Sotheby's is a global pioneer in broadening the art market and offering the highest levels of client service – and we dramatically demonstrated that across the business in 2012.