Phillips International, Inc.

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Date published	2021-08-16
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Summary	Phillips International, Inc., provides investment information to subscribers through newsletters, fax and email services, and web sites. The company's Phillips Investment Resources division offers investment advice from a range of financial editors, who publish their own respective newsletters and provide their services through web sites or e-mail services to customers.
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Phillips International, Inc.
Name	Phillips International, Inc.
Founded	1974-01
Founded	1974-01, as Phillips Publishing Company
Founder	Thomas L. Phillips \|
CEO (2008-01)	Thomas L. Phillips
Executive VP, CFO (2008-01)	Thomas C. Burne
President, Phillips Investment Resources (2008-01)	John J. Coyle
Corporate VP (2008-01)	John W. Farley
Address	Potomac, Maryland, USA
Locations	Rockville, Maryland, USA Washington, DC, USA
Known for	Conservative, right-wind disinformation source.
Industry	Publishing
NAICS	511210: Software Publishers 516110: Internet Publishing and Broadcasting (old?) 519130: Internet Publishing and Broadcasting and Web Search Portals (current)
Sales	2005: $245 million (est.)
Principal divisions	Phillips Investment Resources
Principal competitors	Bankrate Inc. The Kiplinger Washington Editors, Inc.
Key dates	1974: company founded by Thomas L. Phillips, as Phillips Publishing Company 1992: company reorganizes into two separate subsidiaries (under Phillips Publishing International, Inc. umbrella): Phillips Publishing, Inc. Phillips Business Information, Inc. 1993: company launches Eagle Publishing, Inc. 1999: company changes name to Phillips International, Inc. 2000: VS&A Communications Partners II LP (note ties to Brian Mulroney acquires Phillips Business Information company sells Phillips Health division to two New York-based investment firms
Website	Phillips.com (archive.org, 2008-01-31 last active snapshot Site acquired, reactivated 2012-12 by venerable London, U.K. auctioneers Phillips, reappearing (archive.org) ca. 2013-02-05.
Sources	Encyclopedia.com Bloomberg.com

Background-1

Company History

When Thomas L. "Tom" Phillips seized the opportunity to launch Phillips Publishing in 1974 with a $1,000 investment, he was confident the new company would be a success. After all, he had experience in newsletter publishing and a dedication to improving the lives of his customers with the information and solutions he provided through his publications. But Tom never dreamed that his new publishing enterprise would achieve the success that it has over the years.

On January 1, 1974, Tom Phillips founded Phillips Publishing in the converted garage of his home in Chevy Chase, Md., with three employees and two newsletters.

Tom Phillips began Phillips Publishing with a vision: to provide specialized information in an age of specialization. While most of the world was running in the direction of mass media, Tom Phillips realized that people were "drowning in information but starved for knowledge." That's why he established the company as a newsletter business, because newsletters are an ideal medium to provide people with focused "actionable information" and solutions to improve their lives. That was a smart move because over the past 30 years the company has become one of the leading newsletter publishers in the world, as well as a major diversified information provider through its broad array of print and electronic products and Internet initiatives.

Through Tom Phillips' vision and leadership, the company has focused on dynamic, fast-growing markets where there is a constant need for information, insight and analysis. Phillips strives to be the number one provider of information and advice in the consumer investment marketplace it serves.

The holding company, Phillips Publishing International, Inc., was created in July 1991. The following year, the original Phillips Publishing, Inc., was reorganized into two separate subsidiaries: Phillips Publishing, Inc., providing consumers with solutions to improve their health and wealth; and Phillips Business Information, Inc., offering market-focused communication solutions for business-to-business customers.

In September 1991, the company acquired Hart Publications, Inc., one of the premier publishers in the worldwide oil and gas industry. In October 1998, Hart Publications, Inc. was integrated into Phillips Business Information, Inc. (PBI) to create a unified business-to-business publishing powerhouse.

In January 1993, Phillips launched Eagle Publishing, Inc., the only full-service provider of public-policy publications with a conservative, free-enterprise focus. Due to the unique nature of the political marketplace and the different product lines it offers, Eagle became an independent company, separate from Phillips International, Inc., in the summer of 1999.

In the fall of 1993, Tom Phillips brought the whole Phillips team together for a weekend at Disney World to celebrate 20 consecutive years of success for Phillips International. Ten years later, the entire Phillips team was treated to a Disney cruise in honor of the company's 30th anniversary and three decades of success.

In July 1999, the holding company, Phillips Publishing International, Inc., changed its name to Phillips International, Inc. In October 1999, the consumer division, Phillips Publishing, Inc., split into two parts - Phillips Health and Phillips Investment Resources - to give each unit a tighter focus and to provide better service to customers.

In October 2000, Phillips Business Information (PBI) was acquired by VS&A; Communications Partners III, LP, the private equity affiliate of New York-based media merchant bank Veronis Suhler [Veronis Suhler Stevenson]. In addition, Hart Publications, a division of PBI, was acquired by Chemical Week Associates, a VS&A; Communications Partners II, LP portfolio company.

In August 2004, Phillips Health LLC was acquired by two prominent New York-based private equity investment firms: ACI Capital Co., Inc., and American Securities Capital Partners, LLC.

Today [2008-01], Phillips International comprises Phillips Investment Resources, LLC, offering investment products and services to customers. Phillips employees continually rededicate themselves to provide the highest quality information and services to our customers and to be recognized as the #1 leader in the investment marketplace.

Company Growth

Throughout its history, Phillips International, Inc. has grown steadily. Phillips generated close to $300,000 in sales the first year, beginning an unbroken record of sales increases year after year. The company reached the $100 million milestone in 1993. In June 1996, Phillips International, Inc. passed the $1 billion mark in lifetime sales dating back to January 1, 1974, when the company opened its doors for business.

That well-planned and executed growth has been accomplished in three ways. First, thanks to a team of business professionals unmatched by our competitors, Phillips has achieved rapid growth of existing products. Second, by identifying new and emerging markets, Phillips is able to grow through the launch of new products. Third, the company often acquires products or companies that enable us to provide additional services to our customers.

Another key to the company's growth is our annual planning process. The Phillips team spends several weeks in an in-depth review of our markets and products. Then, budgets for each product are formulated using sophisticated budget models. At annual planning meetings, key managers present their business plans to the corporate leadership in working sessions. The company's annual plan is finalized to serve as a blueprint for profitable growth in the new year.

Phillips International products now reach subscribers and customers across the United States and around the globe. Our reach grows each day as more people turn to us for the specialized information and solutions we provide. Each new customer becomes an influential part of the Phillips family, helping to shape the company's direction by communicating the changing needs and desires of the marketplace.

To better serve our customers, the company continues to add talented, energetic and entrepreneurial individuals to our team. We look upon every one of our employees as business builders who respond to the needs and desires of our customers and who serve as the catalyst for our continuing success. In turn, our rapid growth provides great opportunities for each member of our team to advance both personally and professionally.

The company is committed to helping our customers make informed decisions on investment topics. We grow because we stay focused on our key objective of enabling our subscribers to improve their quality of life through the information and solutions we offer. Our goal always is to have an impact and make a difference in their lives, and to benefit them for being part of an extended Phillips International family.

Tom Phillips always likes to say that "we work hard and play hard at Phillips." He and the key leadership have worked to create a team environment where people enjoy working together and everyone shares in the company's success. The result is an atmosphere that is both stimulating and rewarding for all Phillips employees. The Phillips team looks forward to exciting, new milestones.

Key Persons [2008-01]

Thomas L. Phillips

Thomas L. Phillips is Chairman of Phillips International. In January of 1974, he launched the company with two newsletters, three employees and a $1,000 investment. From that entrepreneurial start-up, the company has grown into a leading independent newsletter publisher and one of the largest periodical publishers in the world.

Tom Phillips earned a BA in Political Science from Dartmouth College and an MA in Journalism from The American University. He then held positions with two large national advertising agencies and a Washington, D.C., publishing firm.

Tom Phillips was one of the founding members of the Newsletter Publishers Association in 1977. He served as NPA President in the early 1980's, and in 1989 was honored as NPA "Publisher of the Year." Five years later, Tom was elected as the first member of the Newsletter Publishers Hall of Fame.

As Tom Phillips said when named Publisher of the Year, he believes people are the main key to the company's success. It was his idea to take all Phillips employees and their families - 1,300 in all - to Walt Disney World in the fall of 1993 to celebrate the company's 20th anniversary and first $100 million sales year. It was a grand celebration bringing together Phillips colleagues from across the globe. Ten years later, Tom took the entire Phillips team on a Disney cruise in honor of the company's 30th anniversary.

Tom Phillips is a former member of the Young Presidents' Organization and a current member of the World Presidents' Organization. He helped to launch two successful banks in the Maryland suburbs. He is a member of The Republican National Committee's Regents Program.

Tom Phillips has always been a vigorous supporter of youth. He was active on the Parents Council of Georgetown's School of Business, and is former chairman of The Board of Visitors of The Institute on Political Journalism. Tom serves as Chairman of the Board of Governors for the National Journalism Center. He also serves on the Board of Junior Achievement of Metropolitan Washington and the Board of the National Capital Area Council of the Boy Scouts of America.

Thomas C. Burne

Mr. Thomas C. Burne received a BA in Civil Engineering and Economics from Brown University and an MBA in Finance from Columbia University. Previously, Mr. Burne was Executive Vice President, Chief Operating Officer of Redco Foods, Inc. in Windsor, Conn., and served as Executive Vice President and Chief Financial Officer for Gilbert and Bennett Manufacturing. He also held senior financial positions with Childcraft Education Corporation, PepsiCo., Inc. and Trans World Airlines. Mr. Burne was a member of the Board of Directors for Redco Foods, Inc. and for the U.S. Tea Association, and is a member of the Financial Executive Institute. He joined Phillips in 1996.

John J. Coyle

Mr. Coyle received his BS in Accounting from Providence College. Prior to joining Phillips, he was General Manager for Congressional Quarterly, Inc. Previously, Mr. Coyle served as Senior Director of Mead Data Central (Lexis/Nexis). He has been with Phillips since 1995.

John W. Farley

Mr. Farley is responsible for corporate communications, government relations and corporate contributions. He joined the company 23 years ago as Executive Editor for business-to-business newsletters and later served as Group Publisher for The Defense Group. Previously, he served as Chief of Staff for Florida Congressman Charles E. Bennett. Mr. Farley also worked as a reporter for the Jacksonville Journal newspaper in Florida. He earned a Master degree in Journalism from Northwestern University and a B.S. in International Affairs from Georgetown University.

Background-2

Phillips International, Inc., provides investment information to subscribers through newsletters, fax and email services, and web sites. The company's Phillips Investment Resources division offers investment advice from a range of financial editors, who publish their own respective newsletters and provide their services through web sites or e-mail services to customers.

Company Origins

In January 1974 Thomas L. "Tom" Phillips began Phillips Publishing in the converted garage of his home in Chevy Chase, Maryland, with three employees, two newsletters, and $1,000. Prior to his foray into the publishing business, Phillips had earned a B.A. in political science from Dartmouth College and an M.A. in journalism from The American University. He then gained experience in the publishing world after being employed at two large national advertising agencies and a Washington, D.C., publishing firm. With this experience behind him, Phillips launched his business with a contrarian view in mind. Instead of focusing on mass media, he ran in the opposite direction, realizing that the public was being overwhelmed with information but starved for knowledge and advice. As a result, he founded the company as an independent newsletter business that could provide subscribers with actionable information or advice. His newsletter venture became an immediate success, earning nearly $300,000 in sales in the first year, beginning an unbroken record of sales increases for each succeeding year.

Company Growth, Expansion, & Reorganization: 1990–2000

In subsequent years, Phillips International greatly expanded the newsletter business by focusing on fast growing markets where there was a need for insight and analysis. In July 1991, the company formed Phillips Publishing International, Inc., as a holding company. In the same year, the company acquired Hart Publications, Inc., a leading publisher in the global oil and gas industry. In 1992, the original Phillips Publishing was reorganized into two subsidiaries, including Phillips Publishing, Inc., which focused on improving subscribers' health and financial wealth, and Phillips Business Information, Inc., which provided market-focused analysis and advice for business-to-business customers. The following year, in September 1993, Phillips formed Eagle Publishing, Inc., as a separate subsidiary to publish public policy periodicals with a conservative, free enterprise focus and to oversee the Conservative Book Club. In December 1993, Eagle Publishing acquired Regnery Gateway, a publisher of conservative books. Regnery president Alfred Regnery agreed to the acquisition to spur the firm's growth. He saw synergistic opportunities in the deal, including having Phillips's newsletter and magazine writers and editors produce books for the book division, and promoting titles through Eagle's conservative weekly newspaper, Human Events. Phillips's resources were also seen to help reduce Regnery's dependence on the trade market for survival. As part of the acquisitions agreement, Al Regnery joined Phillips to continue to direct the book division, which was to be known as Regnery Publishing Inc.

In March 1996, Phillips Publishing announced a ten-year deal with Fabian Investment Resources of Huntington Beach, California, requiring Phillips to provide marketing and direct mail assistance and Fabian to contribute investment opinions and new products to the joint venture. Under the agreement, each would own an unspecified amount in Fabian Investment Resources. Phillips Publishing, which earned $186 million in 1995 sales, had become something of a star maker with more than 1 million subscribers through its investment, health, and business-to-business publications. Phillips's other investment titles included The Independent Advisor for Vanguard investors, Mark Skousen's Forecasts & Strategies, Richard Young's Intelligence Report, John Dessauer's Investor's World, and the celebrated The Garzarelli Outlook. In May 1996, a family dispute among descendants of the Gulf Publishing Company founder Ray Lofton Dudley led one faction of the family to buy out the other side's interest, fending off a hostile take over bid by Phillips Publishing International. Members of the Dudley side of the family agreed to sell their stake in the company to Gulf Publishing for an estimated $3.6 million. The move ended Phillips's attempt to augment its ten oil and gas periodicals with the rival 80-year-old company.

In 1997, Elaine Garzarelli, one of Wall Street's star market strategists, began feuding with Phillips Publishing, the publisher of her investment newsletter and a slew of mutual fund reports. Phillips said that the Garzarelli Outlook had lost about 30,000 subscribers from its peak of approximately 82,000 in late 1996, a claim that Garzarelli disputed. Garzarelli said her newsletter had only lost 15,000 subscribers and that Phillips shared blame for the decline by hyping her sell signal in its direct-mail advertisements. Nonetheless, whatever the precise number of lost subscribers, it was clear that Garzarelli's newsletter was bleeding customers primarily due to her ill-timed bet in 1996 that the market was nearing a correction. As press reports indicated that the future of Garzarelli Outlook was doomed, Phillips Publishing signed controversial stock picker and mutual fund manager Louis Navellier to write the Navellier Blue Chip Growth Letter under its company banner. Navallier had made news when the board of trustees of one of the mutual funds he managed accused him of providing incomplete information about the ownership of his investment company and tried unsuccessfully to oust him. The Garzarelli-Phillips feud, however, came at a difficult time for the newsletter business after the Security and Exchange Commission (SEC) began to take a closer look at the booming industry, especially the growth of mutual fund newsletters that were tailored to the small investor. According to a 1985 Supreme Court free speech ruling, the SEC could only indirectly regulate financial newsletters. But the Court's decision still permitted the agency to monitor the business. As result, the SEC had taken action against several newsletters for making misleading claims and failing to disclose conflicts of interest concerning newsletter writers who also had investment businesses. As a major player in the mutual fund newsletter business, Phillips also came under SEC scrutiny, but the company claimed that it held itself to the highest ethical standards.

At the end of 1997, Phillips Publishing International agreed to provide access to its 70 high profile business and financial news sources through InfoMation Publishing Corporation's web-based Echo service, which operated to monitor and deliver new and focused news and information to businesses. Echo innovative system worked by continually updating information and reducing the growing problem of information overload by delivering only crucial data. By utilizing this system, Phillips joined other Echo partners, such as the Financial Times Corporate Alert data feed, NewsAlert, Quote.com, and Telecommunications Reports International.

Company Perspectives

At Phillips International, Inc., our team takes pride in helping our customers improve their lives through innovative products, services and unique solutions we provide. We constantly strive to be the number one provider of information and advice in the consumer investment marketplace by enabling our customers to achieve their personal goals.

In March 1998, founder and president Tom Phillips made what he termed as an intensely personal decision by retaining Goldman Sachs & Co. to find a buyer for the firm, which had 1997 sales of $307 million, up from $261 million the previous year. Phillips said he planned to hold onto one of the company's four subsidiaries, Eagle Publishing, Inc., publisher of conservative public policy publications that he intended to run as a personally owned company. The other three subsidiaries included Phillips Publishing Inc., a leading provider of health and investment periodicals; Phillips Business Information, a producer of newsletters, magazines, conferences, seminars, CD ROMS, online services and directories for businesses; and Hart Publications, Inc, the leading publisher of energy related magazines, newsletters, directories, and information products to the global energy industry. In order for Phillips Publishing International to reach sales of $500 million and beyond and become a major Fortune 500 company, Phillips believed it needed to be bought out by a major corporation with the capital to take it to the next level. Nonetheless, after six months of exploring future directions for the company, he announced in September that the company would stay independent. At the time, Phillips Publishing International had offices across the United States and the United Kingdom with 1,200 employees and more than 100 magazines, newsletters, directories, and other products serving both the business and consumer markets. The company also ran a rapidly growing vitamin and nutritional supplement subsidiary. In making the decision, Tom Phillips said that remaining private would allow the firm to chart its own destiny by building a stronger, more profitable business, enabling it to go public in the future and gain access to capital markets. To position itself for an Initial Public Offering (IPO), in October 1998 the company combined its three business-to-business subsidiaries—Phillips Business Information, Inc., Knowledge Industry Publications, Inc., and Hart Publications, Inc.—into an expanded market-focused Phillips Business Information, Inc. The move to combine the three subsidiaries formed a publishing powerhouse with more than $100 million in annual sales.

Restructuring: 2000 and Beyond

On July 1, 1999, after more than six months of planning, Eagle Publishing Inc. separated from Phillips to become an independent company with Jeffery J. Carneal remaining as president. Eagle founder, chairman, and majority owner Tom Phillips continued in his role as chairman of both Phillips Publishing International and Eagle. Since the firm's founding in 1993, Eagle had become a multi-faceted publisher of trade books, consumer book clubs, a conservative weekly newspaper, newsletters, and list management. The company's product lines included Regnery Publishing, Human Events, Evans-Novak Political Report, Conservative Book Club, Christian Book Club, and Movie and Entertainment Book Club. Both Carneal and Tom Phillips believed the separation was the best way for both firms to pursue their respective marketplaces. However, some observers noted that when the effort to sell Phillips Publishing International failed to win any suitors, the company decided to dump risky ventures and aggressive growth strategies to maximize profits for an initial public offering by 2001.

In August 1999, the firm continued its reorganization by changing its name to Phillips International Inc. Founder Tom Phillips said the name change reflected the company's 25-year evolution from strictly a print publisher to a major diversified corporation offering a wide variety of products and services to consumers and businesses. The company's major subsidiaries at the time included Phillips Publishing Inc., publisher of consumer newsletter and other products; Doctors Preferred Inc., a provider of vitamins and nutritional supplements; and Phillips Business Information Inc., which offered products and services to business-to-business customers. In October 1999, however, Phillips Publishing Inc., the consumer division, split into two parts, including Phillips Health and Phillips Investment Resources to enhance service to customers.

On March 30, 2000, after months of negotiations, Phillips signed a contract to sell its health information publishing and nutritional products business to Your Health Inc., a privately held company based in New York. Although the terms of the agreement were not disclosed, the deal provided that Your Health Inc. deposit $10 million into an escrow account within three days. When the deposit was not made on time, Your Health agreed to make a non-refundable $2 million payment directly to Phillips and put $8 million into the escrow account the next day. Although Phillips received $1.5 million, the $8 million was never deposited. On April 13, company Chairman Tom Phillips terminated the agreement, citing breech of contract by Your Health Inc., and filed a federal lawsuit seeking $500,000 that was promised but never delivered by Your Health Inc. The Phillips' suit also sought judicial confirmation that the breech of contract severed all obligations to provide any of its proprietary intellectual property to Your Health Inc. After terminating the deal, Tom Phillips said that the Phillips Health Group was no longer up for sale and would continue to grow as part of Phillips International.

In October 2000, however, the company signed a definitive agreement to sell Phillips Business Information, Inc. to VS&A Communications Partners II LP, the private equity affiliate of New York-based media merchant bank Veronis Suhler. The subsidiary's major magazines and newsletters included Via Satellite, Communications Technology, Rotor & Wing, and Defense Daily. Moreover, Hart Publications, a division of Phillips Business Information and a specialist in publishing for the global energy industry, was sold to Chemical Week Associates, a portfolio company of VS&A Communications Partners II LP. After spinning off these assets in deal worth about $100 million, Phillips International planned to continue its consumer investment and health publishing businesses, which were anticipated to generate more than $250 million in revenue in 2000 and which had more than 1.5 million subscribers to its consumer newsletters and online services. In the same month that it sold its business-to-business media division, Phillips International bolstered its investment services by acquiring Louis Navellier's MPT Review, then rated by the Hubert Financial Digest as the number one investment advisory service.

In August 2004, Phillips International signed an agreement to sell most of the assets of its Phillips Health division to two New York-based private equity investment firms, ACI Capital Co. and American Securities Capital Partners LLC. The Phillips Health division with annual revenues of approximately $180 million provided health and wellness newsletters to subscribers from specialists in alternative medicine. Also included in the deal was the division's Doctors Preferred unit, a direct-marketer of branded nutritional supplements.

After selling off most of its divisions, Phillips International became primarily a publisher of investment information through newsletters, e-mail services, and web sites. Its one remaining division consisted of Phillips Investment Resources, which provided investment advice from a range of financial editors, who each issued their own newsletter, as well as web site or e-mail services to subscribers.