-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HOF0RNWAwgmRdkgl52dPODGnCc3cOmMv6GhzLqiro/iyQPj4sdiGEgjcvRXDxnAr AAtedAsysD36z8FRJwghPg== 0000898430-98-001730.txt : 19980507 0000898430-98-001730.hdr.sgml : 19980507 ACCESSION NUMBER: 0000898430-98-001730 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980501 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980506 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CB COMMERCIAL REAL ESTATE SERVICES GROUP INC CENTRAL INDEX KEY: 0000852203 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521616016 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12231 FILM NUMBER: 98611136 BUSINESS ADDRESS: STREET 1: 533 S FREMONT AVE CITY: LOS ANGELES STATE: CA ZIP: 90071-1798 BUSINESS PHONE: 2136133123 MAIL ADDRESS: STREET 1: 533 S FREMONT AVE CITY: LOS ANGELES STATE: CA ZIP: 90071-1798 FORMER COMPANY: FORMER CONFORMED NAME: CB COMMERCIAL HOLDINGS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CB ACQUISITION CORP DATE OF NAME CHANGE: 19890731 8-K 1 FORM 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 1, 1998 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 001-12231 52-1616016 (STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER OF INCORPORATION) IDENTIFICATION NO.)
533 SOUTH FREMONT AVENUE, LOS ANGELES, CALIFORNIA 90071 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (213) 613-3123 N/A (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 5. OTHER EVENTS. On May 1, 1998, CB Commercial Real Estate Services Group, Inc. issued a press release announcing that during the week of May 4, 1998 it plans to file with the Securities and Exchange Commission a prospectus supplement to its omnibus shelf registration statement in conjunction with a proposed offering of $200 million aggregate principal amount of Senior Subordinated Notes. The press release is filed as an exhibit hereto. On May 5, 1998, CB Commercial Real Estate Services Group, Inc. issued a press release announcing its results of operations for the quarter ended March 31, 1998. The press release is filed as an exhibit hereto. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (b) CB Commercial Real Estate Services Group, Inc. Unaudited Pro Forma Financial Statements for the year ended December 31, 1997. (c) The following is furnished as exhibits to this report: 99.1 Press release dated May 1, 1998 issued by CB Commercial Real Estate Services Group, Inc. 99.2 Press release dated May 5, 1998 issued by CB Commercial Real Estate Services Group, Inc. 2 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. UNAUDITED PRO FORMA FINANCIAL STATEMENTS The accompanying pro forma financial statements give effect to the following: (a) inclusion of the operations of Koll Real Estate Services, Inc. ("Koll"), for unaudited pro forma statement of operations purposes, for the first eight months of the year to reflect the acquisition of Koll by CB Commercial Real Estate Services Group, Inc. (the "Company") as if the acquisition had occurred on January 1, 1997, and (b) the purchase of the Company's outstanding preferred stock which occurred in the first quarter of 1998, as if it had occurred on December 31, 1997 for unaudited pro forma balance sheet purposes and as if it had occurred on January 1, 1997 for unaudited pro forma statement of operations purposes. The historical financial information of the Company was derived from the audited financial statements for the year ended December 31, 1997 included in the Company's 1997 Annual Report on Form 10-K. The historical financial information for Koll was derived from Koll's unaudited, internally prepared financial statements for the eight- month period ended August 31, 1997. The pro forma adjustments are based upon currently available information and upon certain assumptions that management believes are reasonable. There can be no assurance that the actual effects will not differ significantly from the pro forma adjustments reflected in the pro forma financial statements. The pro forma financial statements are not necessarily indicative of future statement of financial position, results of operations or results that might have been achieved if the transactions had been consummated as of the dates indicated above. 3 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. UNAUDITED PROFORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN 000'S, EXCEPT PER SHARE DATA)
CB COMMERCIAL KOLL EIGHT HISTORICAL MONTHS YEAR ENDED ENDED CB DECEMBER AUGUST 31, PRO FORMA PRO FORMA COMMERCIAL 31, 1997 1997 ADJUSTMENTS SUBTOTAL ADJUSTMENTS PRO FORMA ---------- ---------- ----------- -------- ----------- ---------- Revenues................ $ 730,224 $ 87,687 $817,911 $ 817,911 Commissions, fees and other incentives....... 365,705 17,656 383,361 383,361 Operating, administrative and other.................. 274,447 67,290 341,737 341,737 Merger related and other non-recurring charges................. 12,924 19,771 32,695 32,695 Depreciation and amortization........... 18,060 8,023 (4,500)(a) 26,253 26,253 1,464 (b) 2,910 (c) 208 (d) 88 (e) ---------- -------- ------ -------- ------- ---------- Operating income (loss). 59,088 (25,053) 170 33,865 -- 33,865 Interest income......... 2,598 96 2,694 2,694 Interest expense........ 15,780 2,335 18,115 6,192 (g) 24,307 Minority interest....... 651 651 651 ---------- -------- ------ -------- ------- ---------- Income (loss) before equity income (loss) and provision (benefit) for income taxes....... 45,906 (27,943) 170 17,793 (6,192) 11,601 Equity income (loss).... -- (63) (63) (63) ---------- -------- ------ -------- ------- ---------- Income (loss) before provision for income taxes.................. 45,906 (28,006) 170 17,730 (6,192) 11,538 Provision (benefit) for income taxes........... 20,558 (8,443) (428)(f) 11,687 (2,477)(h) 9,210 ---------- -------- ------ -------- ------- ---------- Income (loss) from continuing operations.. $ 25,348 $(19,563) $ (258) $ 6,043 $(3,715) $ 2,328 ========== ======== ====== ======== ======= ========== Income applicable to common shareholders.... $ 21,348 $ 2,328(j) ========== ========== Per share data: Basic earnings per share................. $ 1.40 $ 0.12(j) ========== ========== Weighted average shares................ 15,237,914 18,634,811(i) ========== ========== Diluted earnings per share................. $ 1.33 $ 0.12(j) ========== ========== Weighted average shares................ 15,996,929 19,556,070(i) ========== ==========
- ------- Notes: (a) Represents reversal of Koll's historical amortization expense. (b) Represents amortization expense for management agreements assuming a useful life of 10 years. (c) Represents amortization expense for the Koll goodwill resulting from the transaction using a 30 year estimated useful life. (d) Represents amortization expense for covenants not to compete. (e) Represents amortization expense on Koll's investments to amortize the difference between the purchase price allocated to these investments and their underlying net book value. (f) Represents the net tax effect of the Koll pro forma adjustments. (g) Represents interest on the borrowings for the preferred stock buyback using a 8.0% interest rate. (h) Represents tax benefit on pro forma entry at 40%. (i) Weighted average shares include incremental shares issued in connection with the Koll transaction from the beginning of the year. (j) Pro forma earnings per share ("EPS") gives effect to the purchase of all of the Company's preferred stock. Accordingly no reduction has been made to income available to common stockholders for the annual dividend on such preferred stock. In addition, pro forma EPS does not reflect the one-time reduction of EPS by approximately $1.70, in connection with such purchase, which amount represents the excess of the purchase price over the carrying value of the preferred stock. 4 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. UNAUDITED PROFORMA BALANCE SHEET AS OF DECEMBER 31, 1997 (DOLLARS IN 000'S)
CB COMMERCIAL HISTORICAL AS OF CB DECEMBER 31, PRO FORMA COMMERCIAL 1997 ADJUSTMENTS PRO FORMA ------------ ----------- ---------- ASSETS Cash..................................... $ 47,181 $ 47,181 Receivables.............................. 77,734 77,734 A/R from affiliates...................... -- -- Deferred taxes........................... 2,890 2,890 Prepaid expenses......................... 9,819 9,819 Other.................................... 12,789 12,789 --------- -------- --------- Total current assets................... 150,413 -- 150,413 Property, plant and equipment............ 50,309 50,309 Goodwill................................. 196,358 196,358 Investments and advances................. -- -- Other intangible assets.................. 43,026 43,026 Inventoried property..................... 7,355 7,355 Deferred taxes........................... 34,967 34,967 Other assets............................. 22,763 22,763 --------- -------- --------- Total assets........................... $ 505,191 $ -- $ 505,191 ========= ======== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Compensation and employee benefits....... $ 56,389 $ 56,389 Accounts payable & accrued liabilities... 61,345 61,345 Reserve for bonus and profit sharing..... 33,538 33,538 Current maturities of long term debt..... 4,949 4,949 Current portion of capital lease obligations............................. 1,655 1,655 Notes payable to bank.................... -- -- --------- -------- --------- Total current liabilities.............. 157,876 -- 157,876 Senior term loans........................ 136,551 77,400 (a) 213,951 Inventoried property loan................ 7,470 7,470 Deferred income taxes.................... -- -- Other long term debt..................... 2,083 2,083 Other long term liabilities.............. 35,768 (5,000)(a) 30,768 --------- -------- --------- Total liabilities...................... 339,748 72,400 412,148 Minority interest........................ 7,672 7,672 STOCKHOLDERS' EQUITY Preferred stock.......................... 40 (40)(a) -- Common stock............................. 188 188 Additional paid-in capital............... 333,981 (72,360)(a) 261,621 Notes receivable from sale of stock...... (5,956) (5,956) Retained earnings (deficit).............. (170,208) (170,208) Foreign currency translation (loss) gain. (274) (274) --------- -------- --------- Total stockholders' equity............. 157,771 (72,400) 85,371 --------- -------- --------- Total liabilities and stockholders' equity................................ $ 505,191 $ -- $ 505,191 ========= ======== =========
- -------- Notes: (a) Reflects the purchase of all of the Company's outstanding preferred stock. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. /s/ Debra Morris Date: May 5, 1998 By: _________________________________ Debra Morris Chief Accounting Officer 6 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------- ---------------------- 99.1 Press release dated May 1, 1998 issued by CB Commercial Real Estate Services Group, Inc. 99.2 Press release dated May 5, 1998 issued by CB Commercial Real Estate
Services Group, Inc. 7 EX-99.1 2 PRESS RELEASE DATED MAY 1, 1998 EXHIBIT 99.1 NEWS CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. 533 South Fremont Avenue Los Angeles, CA 90071 (213) 613-3123 TRADED: NYSE:CBG AT THE FINANCIAL RELATIONS AT THE COMPANY BOARD Cary Brazeman Karen Taylor Stephanie Mishra Corporate Communications General Information Investor/Analyst Contact (213) 613-3227 (310) 442-0599 (415) 986-1591
FOR IMMEDIATE RELEASE MAY 1, 1998 CB COMMERCIAL ANNOUNCES PROPOSED PUBLIC OFFERING Los Angeles, CA, May 1, 1998--CB Commercial Real Estate Services Group, Inc. (NYSE:CBG) today announced that next week it plans to file with the Securities and Exchange Commission a prospectus supplement to the company's omnibus shelf registration statement in conjunction with a proposed offering of $200 million aggregate principal amount of Senior Subordinated Notes due 2008. The underwriters for the offering are Merrill Lynch & Co., BancAmerica Robertson Stephens and Nationsbanc Montgomery Securities. The company intends to consummate this new financing in May 1998. CB Commercial, headquartered in Los Angeles with over 8,000 employees worldwide, serves real estate owners, investors and occupiers through over 200 principal offices in 29 countries. Services include property sales and leasing, investment property acquisitions and dispositions, property management, corporate advisory services and facilities management, development advisory, mortgage banking, investment management, capital markets, appraisal/valuation and market research. When available, copies of the prospectus and prospectus supplement may be obtained from either Merrill Lynch & Co., 250 Vesey Street, New York, NY 10281, (212) 449-1000, BancAmerica Robertson Stephens, 231 South LaSalle Street, 18th Floor, Chicago, IL 60697, (312) 828-7406, or Nationsbanc Montgomery Securities, 600 Montgomery Street, San Francisco, CA 94111, (415) 627-2000. This release may contain forward-looking statements as well as historical information. Forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, may involve known or unknown risks, uncertainties and other factors that may cause the company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this release. Such forward-looking statements speak only as of the date of this release. The company expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in company expectations or results or any change in events. For more information on CB Richard Ellis (via facsimile and at no cost), simply call 1-800-PRO-INFO and dial client code "CBG." If you are calling from outside the United States, please dial 908-544-2850. # # # EX-99.2 3 PRESS RELEASE DATED MAY 5, 1998 EXHIBIT 99.2 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. 533 South Fremont Avenue Los Angeles, CA 90071 TRADED: NYSE:CBG AT THE FINANCIAL AT THE COMPANY RELATIONS BOARD Cary Brazeman Karen Taylor Stephanie Mishra Corporate Communications General Information Investor/Analyst Contact (213) 613-3227 (310) 442-0599 (415) 986-1591
- ------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE MAY 5, 1998 CB COMMERCIAL REPORTS FIRST QUARTER RESULTS 30.6% REVENUE AND 23.9% EBITDA GAINS LOS ANGELES, CA, MAY 5, 1998--CB Commercial Real Estate Services Group, Inc. (NYSE:CBG), the world's leading real estate services provider, today announced first quarter consolidated revenue gains of 30.6% and 23.9% growth in earnings before interest, income taxes, depreciation and amortization ("EBITDA"). For the quarter, adjusted diluted earnings per share increased 11.1% to $0.10 per share. Jim Didion, Chairman and Chief Executive Officer, commented, "Our strong quarterly performance is a reflection of continued strong internal growth combined with the full financial impact of the Koll acquisition in the first quarter compared to last year." Didion continued, "The fundamentals of our business--the strong and increasingly global economy, continued outsourcing of corporate real estate service needs and the ongoing consolidation among real estate services providers--create reason for continued optimism." Didion added, "We are very excited about our combination with REI, which has made us the only global real estate services operation with a commonly owned network, integrated management and consistent service capabilities across all business lines and geographic locations. More than ever before, we are now able to uniquely and creatively serve multinational client needs. Our potential growth from new business as a result of this competitive positioning and becoming the preferred service provider to these types of clients is immense. From our perspective, we continue to see an increasing number of clients, especially multinational companies, outsourcing more and more of their non-core business activities, including their real estate operations, strategic planning, and facilities management and transaction management requirements. We are well poised to capitalize on those growth opportunities and believe we will see the favorable results in our performance going forward." Consolidated Results For the quarter ended March 31, 1998, consolidated revenues increased 30.6% to $175.1 million from $134.1 million in the 1997 first quarter. The 1998 results include the full contribution from Koll Real Estate Services ("Koll"). EBITDA increased 23.9% to $12.5 million compared with $10.1 million in 1997. The company reported net income applicable to common shareholders (before the adjustment for the effects of the deemed dividend associated with accounting for the repurchase of its preferred stock) of $2.0 million, or $0.10 per share, versus net income applicable to common shareholders of $1.3 million, or $0.09 per share in the comparable year ago quarter. The net loss applicable to common shareholders after the impact of the accounting treatment of the preferred stock repurchase was $(30.3) million, or $(1.60) per share in the first quarter, compared to net income of $1.3 million, or $0.09 per share during the 1997 first quarter. CB Commercial News Release May 5, 1998 Page 2 The company noted that the deemed dividend of $32.3 million represented the portion of the price of the January 1998 repurchase of all 4.0 million of its existing convertible preferred shares in excess of carrying value. Those shares were originally issued in conjunction with the company's acquisition by management in 1989. Additionally, the company reported the final purchase price for the equity of REI was approximately $103.0 million based on the company's stock price and the exchange rate at closing. Additional one-time charges of up to $5 million associated with the REI acquisition and integration, and a possible write-down in the carrying value of two owned buildings to fair market value are anticipated to impact next quarter's results, according to Didion. Market Factors The U.S. economy remains strong and real estate markets across the country have continued to perform well. In the office space sector, the national vacancy rate dropped to 9.5% from 11.6% for the first quarter. Demand for office space fueled the declining rate, with about 15 million square feet absorbed during the quarter, according to Torto Wheaton Research, the company's Boston-based real estate econometric analysis and forecasting firm. The outlook for 1998 continues to be favorable, with strong economic activity giving rise to space demand coupled with limited new supply. Segment Results Each business segment continued to realize strong revenue growth during the quarter, and steady gains in EBITDA, with the exception of Corporate Services due to its continuing infrastructure investments. The strong revenue growth reflects the ongoing success of their respective growth strategies and the numerous benefits each realizes from CB Commercial's vertical integration strategy. Commented Didion, "Our brokerage business continues to generate strong deal flow and cash flow. The brokerage operation, which serves as our core business, provides a strong market position and competitive strength to our other business groups." Didion said, "We continue to make considerable advances towards our longer-term objectives and are very pleased with our performance in each business area." Relative Gains For the quarter ended March 31, 1998, CB Commercial produced revenue increases of 12.9% in Brokerage Services, which grew to $93.0 million; 111.9% in Corporate Services, which increased to $12.5 million; 106.8% in Management Services, which advanced to $22.5 million; and 35.1% in Financial Services, which reached $47.2 million. Brokerage Services (53.1% of revenues; grew 12.9%) The company's core business, Brokerage Services (commercial property sales and leasing), contributed 53.1% to consolidated revenues for the quarter. The company reported 12.9% higher brokerage revenues compared to the first quarter of last year as lower vacancy rates in much of the U.S. continued to push rents and sales prices higher. EBITDA advanced 8.3% for the quarter. EBITDA margins narrowed slightly to 7.5% in the quarter from 7.8% in the comparable year ago quarter. Said Brett White, President of Brokerage Services, "The first quarter was strong for Brokerage Services as we continued to prosper from a healthy commercial real estate market. Our presence in every major national market positions us to receive a tremendous amount of the third party service provider business. We continue to see our market share and market preeminence solidify in virtually every major market around the country." CB Commercial News Release May 5, 1998 Page 3 Corporate Services (7.1% of revenues; grew 111.9%) This segment provides transaction management, advisory services, and facilities management on a regional, national and international basis, and constitutes a "one-stop" shop for major corporate and institutional clients. Revenues increased 111.9% to account for 7.1% of total revenues. A top three player in the facilities management part of this segment, CB Commercial now manages approximately 80 million square feet and serves over 125 major multinational and national corporate clients. EBITDA for the quarter declined by $(0.8) million to a loss due to the investment made in infrastructure to support new business expected to come on-line in part as a result of the REI acquisition. Gary Beban, President of Corporate Services, said, "Our continued investments position us to capitalize on the increasing opportunities in this area. As the only service provider able to offer a consistent global capability to corporate clients worldwide, we are already seeing a number of opportunities to take this business worldwide--the CB Richard Ellis combination has sustainable competitive advantages in serving the outsourcing needs of major global corporations." Management Services (12.8% of revenues; grew 106.8%) Providing a comprehensive range of property management services, the company manages more than 200 million square feet for hundreds of clients. Revenue increased 106.8% to $22.5 million, versus $10.9 million in the previous first quarter, to constitute 12.8% of total revenues. EBITDA for the quarter advanced 158.3% to $2.0 million. According to Jana Turner, President of Management Services, "Results for this segment are beginning to reflect the benefits of our integration of our CB and Koll operations, with margins picking up as we start to realize some of the benefits of consolidation." Financial Services (27.0% of revenues; grew 35.1%) A market leader in the delivery of financial services and products to Wall Street, institutional, corporate and offshore investors, the company's Financial Services group realized strong growth during the quarter across nearly all service areas. Services include investment property acquisitions and sales, mortgage banking through L.J. Melody & Company, valuation/appraisal, asset management through Westmark Realty Advisors and real estate market research. Key products include hard-asset funds, loan funds, and mutual funds. Revenue from the Financial Services segment contributed 27.0% to consolidated quarterly revenues and increased 35.1% during the current quarter compared to the 1997 first quarter. EBITDA increased 52.8% for the quarter versus last year's first quarter. Ray Wirta, President of Financial Services, stated, "Overall, our performance in Financial Services was strong, reflecting the real estate markets nationally and our expanding market presence." Forward-Looking Statements This release may contain forward-looking statements as well as historical information. Forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this release. Such forward-looking statements speak only as of the date of this release. The company expressly disclaims any obligation to update CB Commercial News Release May 5, 1998 Page 4 or revise any forward-looking statements found herein to reflect any changes in company expectations or results or any change in events. CB Commercial Real Estate Services Group, Inc. (NYSE:CBG), doing business as CB Richard Ellis, is the world's leading real estate services company. Headquartered in Los Angeles with over 8,000 employees worldwide, the company serves real estate owners, investors and occupiers through over 200 principal offices in 29 countries. Services include property sales and leasing, investment property acquisitions and dispositions, property management, corporate advisory services and facilities management, development advisory, mortgage banking, investment management, capital markets, appraisal/valuation and market research. CB Commercial had 1997 revenues in excess of $730 million; REI reported 1997 revenues of approximately $119 million. * * * For more information on CB Richard Ellis (via facsimile and at no cost), simply call 1-800-PRO-INFO and dial client code "CBG." If you are calling from outside the United States, please dial 908-544-2850. CB Commercial News Release May 5, 1998 Page 5 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 WITH COMPARATIVE FIGURES FOR THE SIMILAR PERIOD IN 1997 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED)
QUARTER ENDED MARCH 31, ------------------------------------------------ 1998 1997 DIFFERENCE % CHANGE ----------- ----------- ---------- -------- CONSOLIDATED Revenue...................... $ 175,144 $ 134,064 $ 41,080 30.6 % Costs and expenses: Commissions, fees and other incentives................ 83,714 67,607 16,107 23.8 % Operating, administrative and other................. 78,958 56,390 22,568 40.0 % Depreciation and amortization.............. 5,322 3,121 2,201 70.5 % ----------- ----------- ---------- ------- Operating income............. 7,150 6,946 204 2.9 % Interest income.............. 727 632 95 15.0 % Interest expense............. 4,321 3,745 576 15.4 % ----------- ----------- ---------- ------- Income before provision for income tax.................. 3,556 3,833 (277) (7.2)% Provision for income tax..... 1,591 1,560 31 2.0 % ----------- ----------- ---------- ------- Net income................... $ 1,965 $ 2,273 $ (308) (13.6)% Dividend on preferred stock.. $ 32,273 (1) $ 1,000 $ 31,273 n/a ----------- ----------- ---------- ------- Net income (loss) applicable to common stockholders................ $ (30,308) $ 1,273 $ (31,581) (2480.8)% =========== =========== ========== ======= Basic earnings (loss) per share....................... $ (1.60) $ 0.10 $ (1.70) (1700.0)% =========== =========== ========== ======= Number of shares used in computing basic earnings (loss) per share... 18,892,735 13,306,135 5,586,600 42.0 % =========== =========== ========== ======= Diluted earnings (loss) per share....................... $ (1.60) $ 0.09 $ (1.69) (1877.8)% =========== =========== ========== ======= Number of shares used in computing diluted earnings (loss) per share....................... 18,892,735 13,909,536 4,983,199 35.8 % =========== =========== ========== ======= Adjusted diluted earnings per share (2)................... $ 0.10 $ 0.09 $ 0.01 11.1 % =========== =========== ========== ======= Number of shares used in computing adjusted earnings per share (2)...... 19,814,487 13,909,536 5,904,951 42.5 % =========== =========== ========== ======= EBITDA....................... $ 12,472 $ 10,067 $ 2,405 23.9 % =========== =========== ========== =======
- -------- (1) Deemed dividend associated with the repurchase of preferred stock. (2) Excludes the effect of deemed dividend associated with the repurchase of preferred stock. CB Commercial News Release May 5, 1998 Page 6 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. OPERATING RESULTS BY BUSINESS SEGMENT FOR THE THREE MONTHS ENDED MARCH 31, 1998 WITH COMPARATIVE FIGURES FOR THE SIMILAR PERIOD IN 1997 (DOLLARS IN THOUSANDS) (UNAUDITED)
QUARTER ENDED MARCH 31, -------------------------------------- 1998 1997 DIFFERENCE % CHANGE ------- ------- ---------- -------- BROKERAGE SERVICES Revenue................................ $92,969 $82,339 $10,630 12.9 % Costs and expenses: Commissions, fees and other incentives.......................... 51,933 45,713 6,220 13.6 % Operating, administrative and other.. 34,061 30,188 3,873 12.8 % Depreciation and amortization........ 1,502 1,493 9 0.6 % ------- ------- ------- ------- Operating income....................... $ 5,473 $ 4,945 $ 528 10.7 % ======= ======= ======= ======= EBITDA................................. $ 6,975 $ 6,438 $ 537 8.3 % ======= ======= ======= ======= EBITDA Margin.......................... 7.5 % 7.8% ======= ======= EBITDA as a percent of consolidated EBITDA................................ 55.9 % 64.0% ======= ======= CORPORATE SERVICES Revenue................................ $12,480 $ 5,890 $ 6,590 111.9 % Costs and expenses: Commissions, fees and other incentives.......................... 4,925 3,275 1,650 50.4 % Operating, administrative and other.. 8,267 2,517 5,750 228.4 % Depreciation and amortization........ 506 67 439 655.2 % ------- ------- ------- ------- Operating income (loss)................ $(1,218) $ 31 $(1,249) (4029.0)% ======= ======= ======= ======= EBITDA................................. $ (712) $ 98 $ (810) (826.5)% ======= ======= ======= ======= EBITDA Margin.......................... (5.7)% 1.7% ======= ======= EBITDA as a percent of consolidated EBITDA................................ (5.7)% 1.0% ======= ======= MANAGEMENT SERVICES Revenue................................ $22,461 $10,862 $11,599 106.8 % Costs and expenses: Commissions, fees and other incentives.......................... 6,402 4,612 1,790 38.8 % Operating, administrative and other.. 14,070 5,480 8,590 156.8 % Depreciation and amortization........ 1,201 153 1,048 685.0 % ------- ------- ------- ------- Operating income....................... $ 788 $ 617 $ 171 27.7 % ======= ======= ======= ======= EBITDA................................. $ 1,989 $ 770 $ 1,219 158.3 % ======= ======= ======= ======= EBITDA Margin.......................... 8.9 % 7.1% ======= ======= EBITDA as a percent of consolidated EBITDA................................ 16.0 % 7.6% ======= ======= FINANCIAL SERVICES Revenue................................ $47,234 $34,973 $12,261 35.1 % Costs and expenses: Commissions, fees and other incentives.......................... 20,454 14,007 6,447 46.0 % Operating, administrative and other.. 22,560 18,205 4,355 23.9 % Depreciation and amortization........ 2,113 1,408 705 50.1 % ------- ------- ------- ------- Operating income....................... $ 2,107 $ 1,353 $ 754 55.7 % ======= ======= ======= ======= EBITDA................................. $ 4,220 $ 2,761 $ 1,459 52.8 % ======= ======= ======= ======= EBITDA Margin.......................... 8.9 % 7.9% ======= ======= EBITDA as a percent of consolidated EBITDA................................ 33.8 % 27.4% ======= =======
CB Commercial News Release May 5, 1998 Page 7 CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31, 1998 1997(1) ----------- ------------ (UNAUDITED) ASSETS Cash and cash equivalents.............................. $ 19,550 $ 47,181 Other current assets................................... 90,246 100,518 Property and equipment, net............................ 52,501 50,309 Goodwill and other intangible assets, net.............. 243,725 239,384 Other assets, net...................................... 71,717 65,117 --------- --------- Total assets......................................... $ 477,739 $ 502,509 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt................... $ 4,043 $ 4,679 Other current liabilities.............................. 88,653 150,346 Long-term debt, less current maturities................ 254,421 146,273 Other long-term liabilities............................ 30,068 35,768 --------- --------- Total liabilities.................................... $ 377,185 $ 337,066 Minority Interest...................................... 4,655 7,672 Stockholders' Equity Contributed capital.................................... $ 264,449 $ 328,253 Accumulated deficit.................................... (168,550) (170,482) --------- --------- Total stockholders' equity........................... 95,899 157,771 --------- --------- Total liabilities and stockholders' equity........... $ 477,739 $ 502,509 ========= =========
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