In Q2 2009, Interpublic saw a cash decrease of $347 million, the company reported to the SEC. Revenues declined 20 percent to $1.5 billion; net income sank 70 percent to $21 million.
But it is on the cashflow statements -- the disclosures that measure actual movements of the agency network's cash, as opposed to the credit notes and bills-payable that the company owns -- where IPG bleeds red ink. Here are the changes in cash held by IPG for the last four quarters:
- Q2 2009: -$347 million.
- Q1 2009: -$466 million.
- Q4 2008: +$92.3 million
- Q3 2008: -$325 million
"June was a bit of a surprise for us. ... We were surprised how much it was down," Interpublic Chief Financial Officer Frank Mergenthaler told analysts and investors on a conference call this morning.To add to the gloom, IPG said it intended to lay off more staff in the next quarter:
We expect additional workforce reductions in the third quarter, which will result in higher severance expense as compared to the prior-year period. We expect that these workforce reductions will contribute to further declines in base salaries and benefits through the remainder of the year.Despite the miserable news, IPG paid out $61,000 in bonuses:
During the six months ended June 30, 2009 the Compensation Committee granted awards under the Cash Plan with a total value of $26.8 and we recognized $1.4 in salaries and related expense...The executives receiving them were not named.
During the six months ended June 30, 2009 the Compensation Committee granted new performance cash awards under the 2006 PIP and the 2009 PIP with a total target value of $31.6, and we recognized $1.6 in salaries and related expense...
Image: CEO Michael Roth.
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