CB Richard Ellis Reports 1998 Fourth Quarter and Year End Results.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Feb. 17, 1999-- -- Achieves Goal of $1 Billion in Revenues with Substantial Profitability -- 42% revenue and 41% EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Gains for the Year -- $1.68 Adjusted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Exceeds Consensus Expectations -- Recovery in Commercial Mortgage Backed Securities Market Seen; Stronger Presence of Pension Funds and Insurance Companies in Executing Real Estate Transactions Support 1999 Growth CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. (NYSE NYSE See: New York Stock Exchange :CBG CBG corticosteroid-binding globulin. ), the world leader in commercial real estate services, today reported full year consolidated revenues of $1.0 billion, a 42% gain over 1997, along with EBITDA, before nonrecurring charges Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". , of $127.2 million, a 41% increase over the prior year. Full year EPS, before nonrecurring charges, was $1.68 versus $1.83 in 1997 on a 12% increase in fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares. For the fourth quarter, the company reported revenues of $330.3 million, a 27% gain along with EBITDA of $48.0 million, a 9% increase from the fourth quarter of 1997. For the fourth quarter, EPS was $0.65. Chairman and Chief Executive Officer Jim Didion Noun 1. Didion - United States writer (born in 1934) Joan Didion stated: "We are quite pleased that we achieved our stated goal of breaking the $1 billion mark in revenues for the year, and combined record revenues with substantial profitability, despite a more difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . "For the year, each of our business segments produced gains in both revenues and cash flow and our EPS exceeded analyst expectations. With growth in the fourth quarter impacted by the turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as in the capital markets, which significantly reduced the volume of commercial real estate sales during the quarter, we nevertheless continued to benefit from our global market presence by leveraging our ability to deliver comprehensive real estate services into new business. "The company is among the strongest in the industry in terms of performance, market position and financial strength. Let me also highlight that despite the troubled capital markets, our mortgage banking operations produced record results. "Moreover, the growth experienced in the fourth quarter relative to last year was in line with our view that our results would be negatively affected by a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in investment property transactions and the repercussions repercussions npl → répercussions fpl repercussions npl → Auswirkungen pl of the capital markets volatility on mortgage originations and liquidity generally." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Didion, in anticipation of strong full year results in early planning, the company had increased its spending run rate to accelerate acquisition integration and the implementation of selected growth initiatives. "With the unexpected volatility in the capital markets in the second and third quarters negatively impacting revenues, the planned increases in expenses and investments negatively impacted profitability. Since we view the capital markets liquidity issues as a short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. phenomenon, the company will accept lower profitability in the near term to continue to build its platform effectively. Didion continued: "Building upon our strong 1998 performance, we expect to benefit in 1999 from improved industry conditions. The market for commercial mortgage backed securities has recovered from the late 1998 collapse, and insurance companies have received fresh allocations of capital committed to real estate financing. "This increase in available capital should have a positive impact on commercial real estate sales later in the year. We will capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. these market improvements by achieving greater efficiencies from our recent acquisitions, building on our industry leading position and focusing on internal expansion as the main driver of the company's growth in 1999." Didion noted comparable results for the full year and quarter were affected by contributions from acquisitions completed since early 1997. Koll KOLL is a commercial-free radio station located in Lonoke, Arkansas, broadcasting to the Little Rock, Arkansas area on 106.3 FM. KOLL airs a Kids format branded as "Nick 106.3". Real Estate Services, which was purchased in August 1997, contributed for all of 1998, compared to one quarter of 1997, while REI Ltd., contributing for nine months of 1998 and Hillier Hillier is a surname, and may refer to:
The company reported higher debt levels at December December: see month. 31, 1998 related primarily to the recent acquisitions and the purchase of the remaining interests of the company's Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. and Canadian businesses Canadian Business is the longest-publishing business magazine in Canada. It was founded in 1928 as The Commerce of the Nation, the organ of the Canadian Chamber of Commerce. The magazine was renamed Canadian Business in 1933. . Now that CB Richard Ellis has slowed the pace of acquisitions, the company intends to use its cash flow to reduce its debt levels. Stock Buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. Completed The company stated that the buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program initiated on October October: see month. 16 was completed at December 31. The company purchased approximately 488,900 shares of common stock during that time at a total cost of approximately $8.9 million. As of December 31, 1998, the company had 21.1 million shares of common stock outstanding, including common stock repurchased Stock repurchase A firm's repurchase of outstanding shares of its common stock. and held in treasury. As noted in the announcement of the stock buyback program, the company intends to reissue re·is·sue v. re·is·sued, re·is·su·ing, re·is·sues v.tr. To issue again, especially to make available again. v.intr. To come forth again. n. 1. these shares in an Equity Incentive Program for future key executives during 1999. Consolidated Results For the quarter ended December 31, 1998, consolidated revenues grew 27% to $330.3 million from $260.7 million in the fourth quarter of 1997. EBITDA increased 9% to $48.0 million compared with $43.9 million in the prior year period. CB Richard Ellis reported net income applicable to common shareholders of $13.6 million versus $18.2 million reported in the fourth quarter of 1997. Fully diluted EPS for the quarter was $0.65 compared to $0.86 earned in the prior year quarter. For the year ended December 31, 1998, consolidated revenues increased 42% to $1.0 billion, up from $730.2 million in 1997. EBITDA, excluding merger-related and other nonrecurring charges, rose 41% to $127.2 million from $90.1 million in the prior year. The deemed dividend associated with accounting for the January January: see month. 1998 repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of the company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. resulted in a net loss applicable to common shareholders of $7.7 million for the year, or $(0.38) per diluted share, versus income of $20.4 million, or $1.28 per diluted share, for 1997. Net income applicable to common shareholders excluding merger related and other one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges and prior to the deemed dividend was $34.6 million, or $1.68 per diluted share, compared to $33.6 million, or $1.83 per diluted share, in the prior year. Additionally, the company incurred anticipated one-time charges in the second quarter of 1998 totaling $16.6 million related to the REI acquisition and a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the company's headquarters building that impacted full year results. Merger-related and other nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. one-time charges for full year 1997 totaled $12.9 million and were related to the Koll acquisition and concurrent refinancing Refinancing An extension and/or increase in amount of existing debt. . The company did not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. any nonrecurring charges in either fourth quarter period. Continuing Strength in Market Fundamentals Office market fundamentals remained strong through the end of 1998, primarily due to difficult capital markets, restrained real estate lending and a dramatic slowing in new speculative development. Vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. rates, as reported by CB Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a Ellis/Torto Wheaton Wheaton. 1 City (1990 pop. 51,464), seat of Du Page co., NE Ill., a residential suburb of Chicago; inc. 1859. It is a religious center and the headquarters of the Theosophical Society of America. Many evangelical organizations are also based there. Research, the Boston-based real estate econometric e·con·o·met·rics n. (used with a sing. verb) Application of mathematical and statistical techniques to economics in the study of problems, the analysis of data, and the development and testing of theories and models. firm, are 8.5% for downtown markets, 9.1% for suburban markets and 9.0% nationwide. The downtown rate is down from the fourth quarter of 1997, while the suburban rate is up from the same period. The suburban rate's rise is due to moderate new supply entering a number of areas. Most reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the strong market is the 70 million square feet of net absorption for 1998. This is 5 million square feet better than 1997 and demonstrates the underlying strength of the economy. The U.S. economy continues to be insulated in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. from those areas of the world with economic woes. The U.S. economy has stable growth, with low inflation and interest rates and an encouraging real estate supply/demand balance. Segment Results "All of our business segments reported strong gains in revenue and EBITDA when compared to the prior year, driven by both internal growth and acquisitions," stated Didion. "For the fourth quarter, however, downturns in the capital and real estate markets negatively affected certain of our business segments. "While our recent acquisitions and internal growth fueled impressive increases in revenue and EBITDA at the Brokerage, Corporate and Assets Services units, our Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. unit felt more acutely the impact of the sudden lack of liquidity and financing available to buyers of and investors in commercial real estate," Didion concluded. As previously noted, the company views the capital market disruptions Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). as short-term in nature and is continuing its investment in the development of its service base. Relative Changes For the quarter ended December 31, 1998, CB Richard Ellis generated revenue gains of 23% in Brokerage Services, which rose to $174.3 million; 90% in Corporate Services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. , which climbed to $28.6 million; 38% in Asset Services, which grew to $40.7 million; and 16% in Financial Services, which advanced to $86.7 million. Brokerage Services (53% of revenues; grew 23%) Brokerage Services, the company's core business of commercial property sales and leasing, contributed 53% of the fourth quarter's consolidated revenues. Brokerage revenues rose 23% to $174.3 million, up from $141.6 million in the fourth quarter of 1997, attributable to appreciation in rents, property sales levels and the contributions from Hillier Parker and REI. For the quarter, EBITDA increased 21%, from $23.8 million to $28.8 million. According to Brett White Brett White (born April 8 1982 in Cooma, New South Wales) is an Australian professional rugby league footballer. He plays for the Melbourne Storm in the National Rugby League. , President, Brokerage Services, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. : "We achieved strong growth in both revenue and cash flow in this more challenging quarter, which is a testament to the growing appeal of our broader product offering and our team based approach to client service, which yielded impressive results, evidenced by notable gains in revenue per producer and transactions per producer. "We believe that buyers and sellers of real estate will continue to seek larger, multi-disciplined service providers, and that CB Richard Ellis is uniquely positioned to capture additional market share." White further highlighted the financial performance of the division, stating: "Our EBITDA margin, while constant from last year, was impacted by our investment in staffing and marketing programs. We increased these investments in response to robust market demand in the first half of 1998, but have tempered our non-essential expenditures to meet the changing market environment of late 1998." White commented on the conditions in the global real estate markets, stating: "The domestic supply and demand balance in the commercial real estate market remained favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. and the lasting economic expansion sustained appreciation in rental rates and property prices. In addition, leasing activity continued unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. during the quarter. "Our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. made significant contributions to the division's results and market conditions in Europe were particularly strong." Corporate Services (9% of revenues; grew 90%) Corporate Services provides transaction and facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. , as well as advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to major corporate clients in the U.S. and globally. Quarterly revenues climbed 90% to $28.6 million and represented 9% of total revenues. Koll and REI made significant contributions to the revenue growth, as did a wider acceptance of real estate management outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. . The company now manages approximately 110 million square feet of corporate facilities, a 21% increase over December 31, 1997. EBITDA increased by 39% to $2.6 million for the quarter, with a decrease in margins due to the continued investment in the division's domestic and international infrastructure. The company reported that its client base continues to grow, counting more than 100 major multinational and national corporations as clients. According to Gary Beban Gary Joseph Beban (born August 5, 1946 in Redwood City, California) is a former American football player. Son of an Italian-born mother and a first generation Croatian-American father, Beban won the 1967 Heisman Trophy, the most prestigious award in college football, and the , Senior Executive Managing Director, Global Corporate Advisory Services: "The quarter's solid results reflect the continued shift to outsourcing of corporate real estate services as firms strive to maximize their use of capital and achieve greater efficiencies in their real estate operations. "Our revenue growth reflects both an increase in business from existing clients seeking larger outsourcing relationships, and new clients that have embraced the outsourcing philosophy. We are particularly enthusiastic about the move towards an integrated, international approach to corporate real estate management practices. "Evidence of this move is the expansion in our international properties under contract, which increased from the start-up Start-up The earliest stage of a new business venture. phase at the beginning of the year to over 1.5 million square feet at the end of 1998." Asset Services (12% of revenues; grew 38%) Asset Services helps clients to build property values through a full range of property management and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , and manages hundreds of millions of square feet of property globally for hundreds of clients. Revenue for the quarter rose 38% to $40.7 million, compared to $29.4 million in the prior year period, and represents 12% of total revenues. EBITDA climbed by 75% to $5.9 million. Included in the current quarter results were contributions from Koll, Mathews Click and Hillier Parker; whereas the 1997 fourth quarter included results only from Koll. Jana Turner, President, Asset Services, North America, commented: "Our operations continue to see the benefits from our recent acquisitions and expansion into new service lines. Overall, we are very pleased with the quarter's results, especially in light of market events. "Indeed, we are benefiting from a number of changes in the capital and real estate markets as investment advisors Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and and other traditional investors of real estate replace REITs as the dominant players in the acquisition market, and seek our real estate services. "In addition, we continued to grow our contractual, on-going fee based business, where the company's strong brand name, global reach and scope of services attract real estate owners and investors who are seeking large, well known service providers." Financial Services (26% of revenues; grew 16%) Financial Services provides a wide range of products and services to property owners, including Wall Street firms and institutional, corporate and offshore investors. The growth at the mortgage banking and valuations units was offset by revenue declines at the investment property unit. As previously stated, the mortgage banking unit achieved record results, as did the valuation group. The Financial Services segment accounted for 26% of consolidated fourth quarter revenues, or $86.7 million, a 16% increase versus the fourth quarter of 1997. EBITDA of $10.7 million was 28% lower than in the comparable year ago quarter due to the decline in investment property sales. Ray Wirta, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of the company and Chairman, North America, stated: "I am pleased with the performance of the entire Financial Services division, despite the impact of the rapid and dramatic changes in the capital markets. The primary impact was in the investment property unit, where we made the strategic decision to maintain our infrastructure and staffing levels during the temporary market disturbance DISTURBANCE, torts. A wrong done to an incorporeal hereditament, by hindering or disquieting the owner in the enjoyment of it. Finch. L. 187; 3 Bl. Com. 235; 1 Swift's Dig. 522; Com. Dig. Action upon the case for a disturbance, Pleader, 3 I 6; 1 Serg. & Rawle, 298. . "While this reduced the division's cash flow during the quarter, our decision has been since validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. as financing flexibility has begun to return to the real estate markets, creating a record backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. for investment property transactions as we began 1999. "In addition, the uncertainty associated with the recent market declines benefited the division as both buyers and sellers migrated towards advisors, such as CB Richard Ellis, with a track record of success and the ability to enhance the likelihood of transaction completion. During 1998, in fact, we increased our market share and will, for the third consecutive year, be ranked by a leading real estate industry publication as the number one investment property sales firm in the nation." CB Richard Ellis is the world's leading real estate services company. With headquarters in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and nearly 10,000 employees worldwide, the company serves real estate owners, investors and occupiers through over 230 principal offices in 30 countries. Services include property sales and leasing, property management, corporate advisory services and facilities management, mortgage banking, investment management, capital markets, appraisal/valuation, and research and consulting. CB Commercial and REI Limited merged in April 1998 to form CB Richard Ellis and acquired Hillier Parker in July 1998 to form the first commonly owned and managed global real estate service firm. For more information on CB Richard Ellis Services, Inc. (via facsimile and at no cost), call 800/PRO-INFO and dial client code "CBG". If calling from outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , dial 1-732-544-2850. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release may contain forward-looking statements as well as historical information. Forward-looking statements, which are included in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 or revise any forward-looking statements found herein to reflect any changes in company expectations or results or any change in events. -0-
CB RICHARD ELLIS SERVICES, INC
OPERATING RESULTS
For the Twelve Months Ended Dec. 31, 1998
with Comparative Figures for the Similar Period in 1997
(Dollars in thousands except per share data)
Twelve Months Ended Dec. 31,
Consolidated 1998 1997 Difference % Change
Revenue $ 1,034,503 $ 730,224 $ 304,279 41.7%
Costs and expenses:
Commissions,
fees and other
incentives 447,333 364,403 82,930 22.8%
Operating,
administrative
and other 459,924 275,749 184,175 66.8%
Merger-related
and other
nonrecurring charges 16,585 12,924 3,661 28.3%
Depreciation
and amortization 32,185 18,060 14,125 78.2%
Operating income 78,476 59,088 19,388 32.8%
Interest income 3,054 2,598 456 17.6%
Interest expense 31,047 15,780 15,267 96.7%
Income before
provision for
income tax 50,483 45,906 4,577 10.0%
Provision for
income tax 25,926 20,558 5,368 26.1%
Net income before
extraordinary items 24,557 25,348 (791) (3.1)%
Extraordinary items -- 951 (951) (100.0)%
Net income $ 24,557 $ 24,397 $ 160 0.7%
Dividend on
preferred stock $ 32,273(a) $ 4,000 $ 28,273 706.8%
Net income (loss)
applicable to
common stockholders $ (7,716) $ 20,397 $ (28,113) (137.8)%
Basic earnings
(loss) per share $ (0.38) $ 1.34 $ (1.72) (128.4)%
Number of shares
used in computing
basic earnings
per share 20,136,117 15,237,914 4,898,203 32.1%
Diluted earnings
(loss) per share $ (0.38) $ 1.28 $ (1.66) (129.7)%
Number of shares
used in computing
diluted earnings
per share 20,136,117 15,996,929 4,139,188 25.9%
Adjusted diluted
earnings
per share(b) $ 1.68 $ 1.83 $ (0.15) (8.2)%
Number of shares
used in computing
adjusted diluted
earnings per
share(b) 20,543,293 18,396,929 2,146,364 11.7%
EBITDA excluding
merger-related and
other nonrecurring
charges $ 127,246 $ 90,072 $ 37,174 41.3%
(a) Deemed dividend associated with the repurchase of preferred
stock.
(b) Excludes the effect of deemed dividend associated with the
repurchase of preferred stock and merger-related and other
nonrecurring charges, net of tax effect.
CB RICHARD ELLIS SERVICES, INC
OPERATING RESULTS BY BUSINESS SEGMENT
For the Twelve Months Ended Dec.31, 1998
with Comparative Figures for the Similar Period in 1997
(Dollars in thousands)
Twelve Months Ended Dec. 31,
1998 1997 Difference % Change
Brokerage Services
Revenue $ 546,361 $ 423,485 $ 122,876 29.0%
Costs and expenses:
Commissions, fees
and other
incentives 284,935 237,697 47,238 19.9%
Operating,
administrative
and other 188,698 133,661 55,037 41.2%
Depreciation
and amortization 10,820 8,200 2,620 32.0%
Operating income $ 61,908 $ 43,927 $ 17,981 40.9%
EBITDA $ 72,728 $ 52,127 $ 20,601 39.5%
EBITDA Margin 13.3% 12.3% -- --
EBITDA as a percent
of consolidated
EBITDA 57.2% 57.9% -- --
Corporate Services
Revenue $ 78,671 $ 37,608 $ 41,063 109.2%
Costs and expenses:
Commissions, fees
and other
incentives 27,921 17,596 10,325 58.7%
Operating,
administrative
and other 46,800 17,526 29,274 167.0%
Depreciation and
amortization 2,491 898 1,593 177.4%
Operating income $ 1,459 $ 1,588 $ (129) (8.1)%
EBITDA $ 3,950 $ 2,486 $ 1,464 58.9%
EBITDA Margin 5.0% 6.6% -- --
EBITDA as a percent
of consolidated
EBITDA 3.1% 2.8% -- --
Asset Services
Revenue $ 126,322 $ 67,442 $ 58,880 87.3%
Costs and expenses:
Commissions, fees
and other
incentives 27,046 21,852 5,194 23.8%
Operating,
administrative
and other 84,175 39,003 45,172 115.8%
Depreciation and
amortization 5,870 2,040 3,830 187.7%
Operating income $ 9,231 $ 4,547 $ 4,684 103.0%
EBITDA $ 15,101 $ 6,587 $ 8,514 129.3%
EBITDA Margin 12.0% 9.8% -- --
EBITDA as a percent
of consolidated
EBITDA 11.9% 7.3% -- --
Financial Services
Revenue $ 283,149 $ 201,689 $ 81,460 40.4%
Costs and expenses:
Commissions, fees
and other
incentives 107,431 87,258 20,173 23.1%
Operating,
administrative
and other 140,251 85,559 54,692 63.9%
Depreciation and
amortization 13,004 6,922 6,082 87.9%
Operating income $ 22,463 $ 21,950 $ 513 2.3%
EBITDA $ 35,467 $ 28,872 $ 6,595 22.8%
EBITDA Margin 12.5% 14.3% -- --
EBITDA as a percent
of consolidated
EBITDA 27.9% 32.1% -- --
Merger-related and
other nonrecurring
charges $ 16,585 $ 12,924 $ 3,661 --
CB RICHARD ELLIS SERVICES, INC
OPERATING RESULTS
For the Three Months Ended December 31, 1998
with Comparative Figures for the Similar Period in 1997
(Dollars in thousands except per share data)
Quarter Ended Dec. 31,
Consolidated 1998 1997 Difference % Change
Revenue $ 330,289 $ 260,682 $ 69,607 26.7%
Costs and expenses:
Commissions, fees
and other
incentives 136,692 126,687 10,005 7.9%
Operating,
administrative and
other 145,594 90,107 55,487 61.6%
Depreciation and
amortization 10,099 5,788 4,311 74.5%
Operating income 37,904 38,100 (196) (0.5)%
Interest income 1,086 639 447 70.0%
Interest expense 9,688 3,773 5,915 156.8%
Income before
provision
for income tax 29,302 34,966 (5,664) (16.2)%
Provision
for income tax 15,669 15,772 (103) (0.7)%
Net income $ 13,633 $ 19,194 $ (5,561) (29.0)%
Dividend on
preferred stock $ -- $ 1,000 $ (1,000) (100.0)%
Net income applicable
to common
stockholders $ 13,633 $ 18,194 $ (4,561) (25.1)%
Basic earnings
per share $ 0.66 $ 0.97 $ (0.31) (32.0)%
Number of shares
used in computing
basic earnings
per share 20,784,026 18,762,328 2,021,698 10.8%
Diluted earnings
per share $ 0.65 $ 0.86 $ (0.21) (24.4)%
Number of shares
used in computing
diluted earnings
per share 20,869,612 22,320,451 (1,450,839) (6.5)%
EBITDA $ 48,003 $ 43,888 $ 4,115 9.4%
CB RICHARD ELLIS SERVICES, INC
OPERATING RESULTS BY BUSINESS SEGMENT
For the Three Months Ended Dec. 31, 1998
with Comparative Figures for the Similar Period in 1997
(Dollars in thousands)
Quarter Ended Dec. 31,
1998 1997 Difference % Change
Brokerage Services
Revenue $174,347 $141,627 $ 32,720 23.1%
Costs and expenses:
Commissions,
fees and other
incentives 88,706 79,720 8,986 11.3%
Operating,
administrative
and other 56,820 38,122 18,698 49.0%
Depreciation and
amortization 3,566 1,652 1,914 115.9%
Operating income $ 25,255 $ 22,133 $ 3,122 14.1%
EBITDA $ 28,821 $ 23,785 $ 5,036 21.2%
EBITDA Margin 16.5% 16.8% -- --
EBITDA as a percent
of consolidated EBITDA 60.0% 54.2% -- --
Corporate Services
Revenue $ 28,567 $ 15,054 $ 13,513 89.8%
Costs and expenses:
Commissions,
fees and other
incentives 9,852 5,701 4,151 72.8%
Operating,
administrative
and other 16,103 7,479 8,624 115.3%
Depreciation and
amortization 748 593 155 26.1%
Operating income $ 1,864 $ 1,281 $ 583 45.5%
EBITDA $ 2,612 $ 1,874 $ 738 39.4%
EBITDA Margin 9.1% 12.4% -- --
EBITDA as a percent
of consolidated EBITDA 5.4% 4.3% -- --
Asset Services
Revenue $ 40,681 $ 29,425 $ 11,256 38.3%
Costs and expenses:
Commissions,
fees and other
incentives 7,745 8,094 (349) (4.3)%
Operating,
administrative
and other 27,024 17,951 9,073 50.5%
Depreciation and
amortization 1,392 1,054 338 32.1%
Operating income $ 4,520 $ 2,326 $ 2,194 94.3%
EBITDA $ 5,912 $ 3,380 $ 2,532 74.9%
EBITDA Margin 14.5% 11.5% -- --
EBITDA as a percent
of consolidated EBITDA 12.3% 7.7% -- --
Financial Services
Revenue $ 86,694 $ 74,576 $ 12,118 16.2%
Costs and expenses:
Commissions,
fees and other
incentives 30,389 33,172 (2,783) (8.4)%
Operating,
administrative
and other 45,647 26,555 19,092 71.9%
Depreciation and
amortization 4,393 2,489 1,904 76.5%
Operating income $ 6,265 $ 12,360 $ (6,095) (49.3)%
EBITDA $ 10,658 $ 14,849 $ (4,191) (28.2)%
EBITDA Margin 12.3% 19.9% -- --
EBITDA as a percent
of consolidated EBITDA 22.2% 33.8% -- --
CB RICHARD ELLIS SERVICES, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Dec. 31,
1998 1997
ASSETS
Cash and cash equivalents $ 19,551 $ 47,181
Other current assets 161,178 98,109
Property and equipment, net 58,366 50,309
Goodwill and other intangible assets, net 500,720 239,384
Other assets, net 113,085 65,117
Total assets $ 852,900 $ 500,100
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturites of long-term debt $ 11,425 $ 4,679
Other current liabilities 214,489 147,937
Long-term debt, less current maturities 373,691 146,273
Other long-term liabilities 56,578 35,768
Total liabilities 656,183 334,657
Minority Interest 5,875 7,672
Stockholders' Equity
Contributed capital 335,470 328,253
Accumulated deficit (144,628) (170,482)
Total stockholders' equity 190,842 157,771
Total liabilities and stockholders' equity $ 852,900 $ 500,100
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