Exhibit 99.1
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PRESS RELEASE |
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Corporate Headquarters |
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865 South Figueroa Street |
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Suite 3400 |
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Los Angeles, CA 90017 |
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www.cbre.com |
FOR IMMEDIATE RELEASE ¾ August 11, 2003
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For further
information: |
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CBRE Holding, Inc. Reports Second Quarter 2003 Results
Los Angeles, CA - (August 11, 2003) — CBRE Holding, Inc., parent corporation of CB Richard Ellis Services, Inc., the world’s leading real estate services firm, today reported its results for the three and six months ended June 30, 2003.
Revenue totaled $321.7 million for the second quarter ended June 30, 2003, an increase of $36.8 million or 12.9% as compared to $284.9 million for the second quarter ended June 30, 2002. Net income totaled $5.2 million for the second quarter ended June 30, 2003 versus $7.3 million for the same period last year. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) totaled $31.7 million for the second quarter ended June 30, 2003, a decrease of $1.7 million or 5.0% from last year’s same period results. This decrease was driven by merger-related and other nonrecurring charges associated with the Insignia Financial Group, Inc. acquisition, which totaled $3.3 million for the three and six months ended June 30, 2003.
Revenue totaled $585.4 million for the six months ended June 30, 2003, which represents a $76.6 million or 15.0% increase over revenue generated in the same period last year. Net income totaled $3.8 million for the six months ended June 30, 2003 versus $1.2 million for the six months ended June 30, 2002. EBITDA for the six months ended June 30, 2003 was $48.7 million, a $4.9 million or 11.1% increase from last year’s same period results. This increase was reduced by the $3.3 million of previously mentioned merger-related and other nonrecurring costs incurred during this period.
On August 11, 2003, at 7:00 a.m. Pacific time, the Company will hold a conference call with its bondholders to discuss its results for the quarter ended June 30, 2003. To access the call, dial 888-273-9885, access code 694278 (outside the United States, please call 612-332-0819). A transcript of the call will be available at www.cbre.com for review for twelve months after the call.
About CB Richard Ellis
Headquartered in Los Angeles, CB Richard Ellis is the world’s leading commercial real estate services firm. With approximately 14,000 employees, the company serves real estate owners, investors and occupiers through more than 250 offices worldwide. The company’s core services include property sales, leasing and management; corporate services; facilities and project management; mortgage banking; investment management; capital markets; appraisal and valuation; research; and consulting. For more information, visit the company’s Web site at www.cbre.com.
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CBRE HOLDING, INC.
OPERATING RESULTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(Dollars in thousands)
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2003 |
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2002 |
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2003 |
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2002 |
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Revenue |
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$ |
321,717 |
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$ |
284,893 |
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$ |
585,441 |
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$ |
508,883 |
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Costs and expenses: |
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Cost of services |
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153,066 |
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128,782 |
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276,665 |
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227,836 |
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Operating, administrative and other |
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137,421 |
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124,353 |
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263,596 |
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240,206 |
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Depreciation and amortization |
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6,329 |
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4,111 |
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12,500 |
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11,703 |
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Equity income from unconsolidated subsidiaries |
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(3,801 |
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(1,639 |
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(6,864 |
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(3,644 |
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Merger-related and other nonrecurring charges |
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3,310 |
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23 |
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3,310 |
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605 |
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Total costs and expenses |
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296,325 |
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255,630 |
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549,207 |
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476,706 |
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Operating income |
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25,392 |
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29,263 |
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36,234 |
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32,177 |
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Interest income |
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701 |
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534 |
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1,776 |
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1,398 |
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Interest expense |
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16,940 |
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14,904 |
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31,264 |
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30,921 |
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Income before provision for income tax |
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9,153 |
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14,893 |
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6,746 |
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2,654 |
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Provision for income tax |
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3,981 |
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7,604 |
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2,921 |
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1,460 |
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Net income |
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$ |
5,172 |
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$ |
7,289 |
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$ |
3,825 |
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$ |
1,194 |
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EBITDA |
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$ |
31,721 |
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$ |
33,374 |
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$ |
48,734 |
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$ |
43,880 |
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EBITDA margin |
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9.9 |
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11.7 |
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8.3 |
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8.6 |
% |
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EBITDA is calculated as follows:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2003 |
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2002 |
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2003 |
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2002 |
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Operating income |
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$ |
25,392 |
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$ |
29,263 |
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$ |
36,234 |
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$ |
32,177 |
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Add: |
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Depreciation and amortization |
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6,329 |
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4,111 |
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12,500 |
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11,703 |
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EBITDA |
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$ |
31,721 |
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$ |
33,374 |
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$ |
48,734 |
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$ |
43,880 |
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EBITDA represents earnings before net interest expense, income taxes, depreciation and amortization of intangible assets relating to acquisitions. Management believes that the presentation of EBITDA will enhance a reader’s understanding of the Company’s operating performance. EBITDA is also a measure used by senior management to evaluate the performance of the Company’s various lines of business and for other required or discretionary purposes, such as the use of EBITDA as a significant component when measuring performance under the Company’s employee incentive programs. Additionally, many of the Company’s debt covenants are based upon a measure similar to EBITDA. EBITDA should not be considered as an alternative to (i) operating income determined in accordance with accounting principles generally accepted in the United States or (ii) operating cash flow determined in accordance with accounting principles generally accepted in the United States. The Company’s calculation of EBITDA may not be comparable to similarly titled measures reported by other companies.
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CB RICHARD ELLIS SERVICES, INC (1)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
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June 30, 2003 |
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December 31, 2002 |
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Assets: |
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Cash and cash equivalents |
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$ |
23,009 |
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$ |
79,574 |
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Warehouse receivable (2) |
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138,240 |
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63,140 |
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Other current assets |
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223,462 |
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223,351 |
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Property and equipment, net |
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68,959 |
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66,634 |
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Goodwill and other intangible assets, net |
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666,631 |
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668,219 |
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Deferred taxes, non current |
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35,972 |
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36,376 |
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Deferred compensation assets |
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69,533 |
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63,642 |
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Cash held in escrow |
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200,000 |
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— |
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Other assets |
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147,189 |
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139,169 |
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Total assets |
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$ |
1,572,995 |
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$ |
1,340,105 |
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Liabilities: |
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Current liabilities, excluding debt |
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$ |
226,991 |
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$ |
288,891 |
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Warehouse line of credit (2) |
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138,240 |
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63,140 |
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Revolver and swingline credit facility |
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11,250 |
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— |
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Senior secured term loan tranche A |
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35,001 |
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38,750 |
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Senior secured term loan tranche B |
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181,300 |
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182,225 |
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11 1/4% senior subordinated notes |
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226,055 |
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225,943 |
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9 3/4% senior notes |
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200,000 |
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— |
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Other debt (3) |
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68,941 |
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60,988 |
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Deferred compensation liability |
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112,741 |
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106,252 |
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Other long-term liabilities |
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56,836 |
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43,301 |
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Total liabilities |
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1,257,355 |
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1,009,490 |
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Minority interest |
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6,081 |
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5,615 |
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Stockholders’ equity |
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246,215 |
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263,137 |
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Mezzanine notes |
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63,344 |
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61,863 |
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Total stockholders’ equity |
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309,559 |
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325,000 |
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Total liabilities and stockholders’ equity |
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$ |
1,572,995 |
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$ |
1,340,105 |
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(1) CB Richard Ellis Services, Inc. is a wholly owned subsidiary of CBRE Holding, Inc.
(2) Includes Freddie MAC loan receivables and related non-recourse warehouse line of credit of $138.2 million and $63.1 million at June 30, 2003 and December 31, 2002, respectively.
(3) Includes non-recourse debt relating to a building investment in Japan of $39.3 million and $40.0 million at June 30, 2003 and December 31, 2002, respectively.
4