Sotheby's Reports First Quarter 2014 Financial Results

Sotheby's Reports First Quarter 2014 Financial Results

  *40% Increase in First Quarter 2014 Net Auction Sales
  *Agency Revenues Increase 31% to $123.1 million in the First Quarter
  *First Quarter Operating Income of $4.1 million Compared to Previous Period
    Operating Loss of ($21.3) million
  *$16.2 million Improvement in First Quarter Net Loss to ($6.1) million, or
    ($0.09) per Share

NEW YORK, May 7, 2014 (GLOBE NEWSWIRE) -- Sotheby's (NYSE:BID) today reported
financial results for the first quarter ended 31 March 2014.

Fueled by continued strength in the global art market and a record February
sales series in London, Sotheby's achieved a $211 million (40%) increase in
Net Auction sales in the first quarter 2014 and a resulting $26.1 million
(33%) increase in auction commission revenues.

As a result, for the three months ended 31 March 2014, the Company reported
loss before taxes of ($5.7) million, which represents a $26 million
improvement compared to the prior year.

For the first quarter, consolidated sales^1 increased 32%, to $1 billion.

"These outstanding first quarter 2014 results pick up where we ended 2013,
when we were the fastest growing global auction company," said Bill Ruprecht,
Sotheby's Chairman, President and Chief Executive Officer. "They demonstrate
that the art market remains robust, clients from all corners of the world
aspire to engage and transact with Sotheby's because they are benefitting from
our unrivalled expertise and market knowledge, and we are executing well on
our promise of cost control in 2014.

"What we're seeing is a market that continues to deliver. In the coming weeks
we have a number of exciting and important works on offer in our salesrooms,
including our Contemporary Art sales in New York, which carry their highest
pre-sale total estimates in Sotheby's history," added Mr. Ruprecht.

Agency revenues increased 31% to $123.1 million in the quarter. Auction
commission margin decreased from 15.0% to 14.3%, primarily due to the margins
achieved with certain high value consignments in the London Impressionist
sale.These consignments produced strong dollar profitability and were the
cornerstone of the February Impressionist, Modern and Contemporary Sales which
totaled $524.5 million, Sotheby's highest ever for the two week series in

Sotheby's reported total expenses increased $29.7 million (24%) to $152.7
million, due to a $23.8 million increase in cost of Principal revenues
attributable to transactions completed in the current period, as well as
special charges of $5.7 million related to shareholder activism and the
resulting proxy contest with Third Point LLC. Excluding these costs, adjusted
expenses^2 totaled $122.5 million, or flat, when compared to the prior year
period, despite the significant increase in revenues.

Late last year, Management completed an initial review of its cost structure
and identified opportunities for cost savings in 2014 of approximately $22
million^3 across various categories of expenses, including professional fees
and other general and administrative expenses, auction direct costs, and
marketing expenses. Management is continuing to review its resource
allocations across the business and anticipates realizing additional
opportunities to further improve Sotheby's cost structure.

For the first quarter of 2014, Sotheby's net loss was ($6.1) million, or
($0.09) per share, representing a $16.2 million improvement over the net loss
of ($22.3) million, or ($0.33) per share in the prior year, as the stronger
operating results were partially offset by a $3.1 million income tax charge to
reduce the value of certain deferred tax assets to reflect the enactment of
the New York State 2014 – 2015 Budget Act, which is expected to reduce the
amount of taxable income apportioned to New York State thereby reducing
Sotheby's state effective income tax rate beginning in 2015.

The worldwide art auction market has two principal selling seasons, which
generally occur in the second and fourth quarters of the year. In the
aggregate, second and fourth quarter Net Auction Sales represented 83% and 84%
of total Net Auction Sales in 2013 and 2012, respectively, with auction
commission revenues comprising approximately 81% of Sotheby's total revenues
in those years. Accordingly, Sotheby's financial results are seasonal, with
peak revenues and operating income generally occurring in those quarters.
Consequently, first and third quarter results have historically reflected
lower revenues when compared to the second and fourth quarters and, typically,
net losses due to the fixed nature of many of Sotheby's operating expenses.
Management believes that investors should focus on results for six and twelve
month periods, which better reflect the business cycle of the art auction

Second Quarter 2014 Sales

Last month in Hong Kong, Sotheby's five day sales series brought outstanding
results totaling $438 million, a 56% increase on the prior year and above the
pre-sale high estimate. The Meiyintang Chenghua "Chicken Cup" sold for $36
million, a world record at auction for Chinese Porcelain and one of three
works of art Sotheby's sold during the sales series for HKD$100 million or
more. Sotheby's also established auction records for fifteen artists,
including Zhang Xiaogang, Yoshitomo Nara and S. Sudjojono, which also
represented a world auction record for any Southeast Asian Art. Our sales of
Fine Chinese Paintings, Wines and Watches all performed with exceptional
sell-through rates.

Sotheby's April sale of Magnificent Jewels in New York brought $44 million,
well within the pre-sale estimate of $37 million-$49 million. Highlighting
the sale was a 15.23 carat Magnificent Fancy Intense Orangy Pink Diamond and
Diamond Ring which sold for $6.1 million and a 28.18 carat Exceptional Kashmir
Sapphire and Diamond Ring which sold for $5.1 million and established the
world auction record price per carat for any sapphire.

Upcoming Sales

Beginning this evening in New York, we present our Impressionist & Modern Art
sales which carry a total pre-sale estimate of $264-$383 million.
Highlighting the sales are fourteen works by Pablo Picasso that span seven
decades, led by Tête de Marie-Thérèse from 1932, a radiant example of his
paintings depicting his beloved mistress of the early 1930s (pre-sale est.
$15-$20 million). Other noteworthy works are an iconic sculpture by
Giacometti, featuring his legendary La Place (pre-sale est. $12-$18 million),
classic Impressionist canvases by Claude Monet from Giverny, Normandy and
Rouen including Le pont japonais (pre-sale est. $12-$18 million), previously
unrecorded works by Joan Miró emerging from a vault for the first time in half
a century, and bold paintings by Matisse, Picasso and Léger from a private
American collection including Matisse's La Séance du matin (pre-sale est.
$20-$30 million).

Next week in New York, Sotheby's is excited to offer a number of extraordinary
works in our Contemporary Art sales, which have a combined pre-sale estimate
of $410-$578 million. The leading lot of the sales is Jeff Koons' most
accomplished and major work of recent years: an immaculate, gleaming,
seven-foot tall statue of the cartoon character and American pop culture icon
Popeye (pre-sale est. in the region of $25 million). Also highlighting the
Contemporary Art sales are Jean-Michel Basquiat's Undiscovered Genius of the
Mississippi Delta (pre-sale est. $21-$30 million) – a large canvas across a
frieze of five panels which records the historical struggles permeating
Basquiat's African-American roots and a unique group of Six Self Portraits by
Andy Warhol that are among the final and greatest works the artist ever
created (pre-sale est. $25-$35 million).

Sotheby's is pleased to offer the sale of The Sender Collection, a pioneering
assemblage of Contemporary Art that brings together many of the most
influential artists of the past several decades. Noted for its breadth and
scope – nearly 400 works by 139 different artists – the collection will be
presented over the course of the next 18 months in both London and New York
and is estimated to bring in excess of $70 million. Approximately 100 lots
will be offered in our New York Contemporary Art sales led by some of the
finest examples of works by Dan Flavin, Keith Haring, Rosemarie Trockel, and
Sarah Lucas to appear on the market.

Also next week, we look forward to our Magnificent Jewels sale in Geneva on 13
May, presenting an impressive selection of signed and period jewels from
private collections, some with noble provenance. The array of important
diamonds in the sale includes the 'Graff Vivid Yellow', an exceptional 100.09
carat daffodil yellow diamond ring and the Victory Diamond, named in honour of
the Allied victory in World War II. Coloured stones include an important
121.00 carat Burmese sapphire and an exquisite 12.46 carat Burmese ruby.
Collectors of jewels from the 20^th century will be captivated by the
Belperron jewels from the collection of Mme Picha-Eisenstein, a close friend
of the celebrated designer Suzanne Belperron. The sale carries a total
pre-sale estimate of $93-$142 million.

^1Defined as the sum of Aggregate Auction Sales, Private Sales and Principal
revenues.Aggregate Auction Sales represent the hammer price of property sold
at auction plus buyer's premium and Private Sales represent the total purchase
price of property sold in private sales brokered by Sotheby's.

^2 Non GAAP financial measure.See Appendix for details.

^3 Assumes $5 million savings in direct cost of auction services based on a
similar level of net auction sales as 2013.

Note: Estimates do not include buyer's premium and prices achieved include the
hammer price plus buyer's premium.

All Sotheby's Press Releases and SEC filings are available on our web site at outline of the conference call will be available at 

Sotheby's will host a conference call at 9:00 AM EDT on 7 May 2014, to discuss
its first quarter 2014 financial results.Please dial 888-371-8897 and for
callers outside the United States, Puerto Rico and Canada, please dial
1-970-315-0479, approximately 15 minutes before the scheduled start of the
call.The call reservation number is 34398852.

The conference call will also be accessible via webcast on the Investor
Relations section of the Sotheby's web site at

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 success of our risk reduction and margin improvement efforts, the
amount of quality property being consigned to art auction houses and the
marketability at auction of such property.Please refer to our most recently
filed Form 10-Q (and/or 10-K) for a complete list of Risk Factors.

Financial Tables Follow




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Sotheby's has been uniting collectors with world-class works of art since
1744. Sotheby's became the first international auction house when it expanded
from London to New York (1955), the first to conduct sales in Hong Kong
(1973), India (1992) and France (2001), and the first international fine art
auction house in China (2012). Today, Sotheby's presents auctions in eight
different salesrooms, including New York, London, Hong Kong and Paris, and
Sotheby's BidNow program allows visitors to view all auctions live online and
place bids in real-time from anywhere in the world. Sotheby's offers
collectors the resources of Sotheby's Financial Services, the world's only
full-service art financing company, as well as private sale opportunities in
more than 70 categories, including S|2, the gallery arm of Sotheby's
Contemporary Art department, as well as Sotheby's Diamonds and Sotheby's Wine.
Sotheby's has a global network of 90 offices in 40 countries and is the oldest
company listed on the New York Stock Exchange (BID).

                      Images are available upon request

 All catalogues are available online at or through Sotheby's
                             Catalogue iPad App.

(Thousands of dollars, except per share data)

                                                       Three Months Ended
                                                       March 31,  March 31,
                                                       2014       2013
Agency                                                  $123,128 $94,175
Principal                                               26,001     1,083
Finance                                                 5,682      4,933
License fees                                            1,697     1,186
Other                                                   303        368
Total revenues                                          156,811    101,745
Agency direct costs                                     10,437    8,449
Cost of Principal revenues                              24,502    700
Cost of Finance revenues                                710       --
Marketing                                               3,133     4,687
Salaries and related                                    65,756    60,695
General and administrative                              37,332    44,011
Depreciation and amortization                           5,147     4,516
Special charges                                         5,703     --
Total expenses                                          152,720    123,058
Operating income (loss)                                 4,091      (21,313)
Interest income                                         416       386
Interest expense                                        (8,783)   (12,515)
Other (expense) income                                  (1,442)   1,699
Loss before taxes                                       (5,718)    (31,743)
Equity in earnings of investees, net of taxes           154       2
Income tax expense (benefit)                            331       (9,396)
Net loss                                                $(5,895) $(22,345)
Less: Net income attributable to noncontrolling         (219)      --
Net loss attributable to Sotheby's                      $(6,114) $(22,345)
Basic and diluted loss per share - Sotheby's common     $(0.09)  $(0.33)
Weighted average basic and diluted shares outstanding   69,143    67,951
Cash dividends per common share                         $4.44    $--


GAAP refers to generally accepted accounting principles in the United States
of America. Included in Sotheby's earnings release are measures presented in
accordance with GAAP and also on a non-GAAP basis. In its earnings release,
Sotheby's presents Adjusted Expenses, which represents total expenses
excluding the cost of Principal revenues and special charges. Adjusted
Expenses is a supplemental financial measure that is not required by or
presented in accordance with GAAP.

Adjusted Expenses is used by management to analyze Sotheby's cost structure,
especially in reporting periods when the cost of Principal revenues is
significant. Management believes that Adjusted Expenses is a useful measure
that can be used by investors and analysts toassess Sotheby's cost structure
when compared to prior periods and on a forward-looking basis. Adjusted
Expenses should not be considered an alternative to total expenses reported in
accordance with GAAP. The following is a reconciliation of total expenses to
Adjusted Expenses for the three months ended March 31, 2014 and 2013.

Three Months Ended  2014           2013          $ Change         % Change
March 31,
Total expenses      $152,720     $123,058    $(29,662)      -24%
Subtract: Cost of   24,502        700          (23,802)        *
Principal revenues
Subtract: Special   5,703         --          (5,703)         N/A
Adjusted Expenses   $122,515     $122,358    $(157)         0%

* Represents change in excess of 100%

CONTACT: New York | Andrew Gully | Jennifer Park |
         +1 212 606 7176
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