2006 Agency Business Report: Schwartz Communications

Steve Schwartz, president and CEO

Steve Schwartz, president and CEO

What is your current headcount, and how has it changed from this time last year?
Schwartz's currently has more than 200 employees.

End of 2005 Total Headcount = 175
End of 2004 Total Headcount = 147
Growth Rate in 2005 = 19%

What was the percentage of staff turnover?
Turnover was very low relative to the industry at 29% overall annually for 2005, compared to an industry average which we understand to be more than double this amount. It should be noted also that at the Vice President level and above the turnover was less than 5% in 2005.

Did you make any senior hires in 2005 (VP and higher)?
Ari S. Milstein, CPA joined the Schwartz management team as CFO. Ari has over 17 years of professional experience in finance and accounting with a variety of high-growth businesses, including professional service, software/technology and multi-location organizations. In his career, Ari has helped raise more than $100 million in capital from IPOs, venture financing, equipment leasing and bank lines of credit. He is a graduate of the University of New Hampshire and received his MBA from Bentley College. Prior to Schwartz, Ari served as Chief Financial Officer for Adlex, Inc.

Of particular significance is that the Schwartz management team, encompassing the 20 most senior people in the agency, now averages ten years service at Schwartz, an unheard-of level of stability and consistency in the agency business.

What senior staff have departed the firm?
Bronwin Boyd-Sanders, VP

Other senior management changes
No additional senior management changes

Have you made any acquisitions in the past year, or merged with another agency?

How many offices do you have globally?
North America
Two offices; Headquarters in Waltham, Mass. and office in San Francisco, Calif.

What offices opened in 2005 or early 2006? (State when)

What offices closed in 2005 or early 2006? (State when)

Is there a particular region, US and globally, that is growing right now?
Geographically, all aspects of our national practice are growing at a steady rate.

Is there a particular region, US and globally, that's shrinking?

How many practice areas do you have?
With a deep reservoir of technology and healthcare knowledge, Schwartz has 11 practice areas focused on specialty disciplines.

Which ones are new?
None of the practice areas are new in 2005.

Of those, which ones are part of the core strategy of the agency?
All of the practice areas are an integral component of Schwartz's core strategy.

Which practice areas have been phased out in the past year?

What practice areas showed the most growth?

Which practice areas showed the least growth?

What is the distribution of accounts across practice areas?Unavailable

What key account wins did you have in 2005? (Please exclude non-US business)?
Our clients consist of many of the nation's most exciting technology companies. Notable among the clients added in 2005 were Cochlear Americas, Nobel BioCare, Nuance Communications, Subimo, Misys, StemCells Inc., OpTier, Northstar Neuroscience, Nanosphere and Secure Software.

Did you expand any existing accounts into new domestic or international markets?
Yes, many of our existing clients expanded during 2005.

Did any dormant clients start to spend with you again?
Yes. Salary.com and PepperCoin are two clients that started to spend with Schwartz again.

What proportion of your clients are on a retainer?
Approximately 98% of our clients are on a fixed fee monthly retainer, which is Schwartz's standard model.

Has this changed over the past year?
No. For the most part, less than a half-dozen clients have been on an hourly rate arrangement. Both Schwartz and our clients see terrific benefits of predictability in the monthly fixed retainer model.

What was your 2005 US revenue (as entered into the separately submitted Rankings Form)?
2005 US Revenues were $22,184,187.

What was the % change over 2004 US revenue?
In 2005, US Revenues increased more than 21% over 2004.

What was your 2005 global revenue (as entered into the separately submitted Rankings Form)?
2005 Global Revenues were the same as US Revenues, or $22,184,187.

What was the % change over 2004 global revenue?
In 2005, Global Revenues increased the same as US Revenues, or >21% over 2004.

Did you experience top-line or bottom-line growth in the past year?
Schwartz experienced both top-line growth (as mentioned above) as well as bottom-line growth.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
In 2005, Schwartz experienced impressive growth in terms of revenues, profitability, and number of employees. Performance exceeded expectations since Schwartz grew much faster than the industry rates as a whole in each of the above categories.

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