Exhibit 99.1

 

 

PRESS RELEASE

 

Corporate Headquarters
865 South Figueroa Street
Suite 3400
Los Angeles, CA 90017
www.cbre.com

 

FOR IMMEDIATE RELEASE ¾ November 12, 2003

 

For further information:
Kenneth Kay
Senior Executive Vice President
and Chief Financial Officer
CB Richard Ellis
213.438.4833

 


Ronald Platisha
Executive Vice President–Finance
CB Richard Ellis
310.354.6044

 

CBRE Holding, Inc. Reports Third Quarter 2003 Results

 

Los Angeles, CA - (November 12, 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 nine months ended September 30, 2003.

 

Third quarter 2003 results include the activities of Insignia Financial Group, Inc. (Insignia Acquisition) from July 23, 2003 (the effective date of the merger) through the end of the quarter. The combined company results have been significantly impacted by costs associated with the merger, as noted below.

 

Revenue totaled $423.4 million for the third quarter ended September 30, 2003, an increase of $138.4 million or 48.6% as compared to $284.9 million for the third quarter ended September 30, 2002.  Net loss totaled $28.4 million for the third quarter ended September 30, 2003 versus net income of $1.9 million for the same period last year. The net loss in the current period was mainly driven by $31.3 million of amortization expense resulting from intangible assets acquired as part of the Insignia Acquisition as well as merger-related charges of $16.5 million associated with the Insignia Acquisition. The intangible asset amortization primarily pertains to the revenue backlog acquired in the Insignia transaction. Net income cannot be recognized from purchased backlog; hence this amortization expense offsets that portion of operating income that was generated from the Insignia backlog acquired. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) totaled $20.7 million for the third quarter ended September 30,

 



 

2003, a decrease of $6.9 million or 24.9% from last year’s same period results.  This decrease was mainly driven by the above-mentioned $16.5 million of merger-related charges.

 

Revenue totaled $1.0 billion for the nine months ended September 30, 2003, which represents a $215.0 million or 27.1% increase over $793.8 million of revenue generated in the same period last year.  Net loss totaled $24.6 million for the nine months ended September 30, 2003 versus net income of $3.6 million for the nine months ended September 30, 2002.  The net loss in the current year was mainly due to the previously mentioned total of $47.8 million of amortization expense and merger-related charges incurred during the quarter ended September 30, 2003. EBITDA for the nine months ended September 30, 2003 was $69.4 million, a $2.6 million or 3.5% decrease from last year’s same period results.  This decrease was primarily caused by the $19.8 million of merger-related costs associated with the Insignia Acquisition that were incurred during this period.

 

On November 12, 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 September 30, 2003.  To access the call, dial 800-450-0785, access code 703359 (outside the United States, please call 612-332-0634).  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.

 



 

CBRE HOLDING, INC.
OPERATING RESULTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

Revenue

 

$

423,376

 

$

284,928

 

$

1,008,817

 

$

793,811

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of services

 

208,198

 

135,670

 

484,863

 

363,506

 

Operating, administrative and other

 

180,298

 

124,470

 

443,894

 

364,676

 

Depreciation and amortization

 

41,071

 

6,404

 

53,571

 

18,107

 

Equity income from unconsolidated subsidiaries

 

(2,318

)

(2,778

)

(9,182

)

(6,422

)

Merger-related charges

 

16,485

 

 

19,795

 

50

 

Total costs and expenses

 

443,734

 

263,766

 

992,941

 

739,917

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(20,358

)

21,162

 

15,876

 

53,894

 

Interest income

 

1,788

 

1,275

 

3,564

 

2,673

 

Interest expense

 

28,255

 

15,420

 

59,519

 

46,341

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before (benefit) provision for income tax

 

(46,825

)

7,017

 

(40,079

)

10,226

 

(Benefit) provision for income tax

 

(18,380

)

5,136

 

(15,459

)

6,596

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(28,445

)

$

1,881

 

$

(24,620

)

$

3,630

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

20,713

 

$

27,566

 

$

69,447

 

$

72,001

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin

 

4.9

%

9.7

%

6.9

%

9.1

%

 

 

 

 

 

 

 

 

 

 

EBITDA is calculated as follows:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

Operating (loss) income

 

$

(20,358

)

$

21,162

 

$

15,876

 

$

53,894

 

Add:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

41,071

 

6,404

 

53,571

 

18,107

 

EBITDA

 

$

20,713

 

$

27,566

 

$

69,447

 

$

72,001

 

 

EBITDA represents earnings before net interest expense, income taxes, depreciation and amortization.  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 of America, or (ii) operating cash flow determined in accordance with  accounting principles generally accepted in the United States of America.  The Company’s calculation of EBITDA may not be comparable to  similarly titled measures reported by other companies.

 

 



 

CB RICHARD ELLIS SERVICES, INC (1)
CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

 

 

 

September 30, 2003

 

December 31, 2002

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

65,428

 

$

79,574

 

Restricted cash

 

17,912

 

 

Warehouse receivable (2)

 

135,820

 

63,140

 

Other current assets

 

389,456

 

223,351

 

Property and equipment, net

 

110,705

 

66,634

 

Goodwill and other intangible assets, net

 

947,041

 

668,219

 

Deferred taxes, non current

 

26,227

 

36,376

 

Deferred compensation assets

 

70,077

 

63,642

 

Other assets

 

200,963

 

139,169

 

 

 

 

 

 

 

Total assets

 

$

1,963,629

 

$

1,340,105

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Current liabilities, excluding debt

 

$

413,378

 

$

288,891

 

Warehouse line of credit (2)

 

135,820

 

63,140

 

Senior secured term loan tranche A (3)

 

32,813

 

38,750

 

Senior secured term loan tranche B (3)

 

255,650

 

182,225

 

11¼% senior subordinated notes

 

226,114

 

225,943

 

9 ¾% senior notes

 

200,000

 

 

Other debt (4)

 

81,074

 

60,988

 

Deferred compensation liability

 

125,465

 

106,252

 

Other long-term liabilities

 

99,427

 

43,301

 

 

 

 

 

 

 

Total liabilities

 

1,569,741

 

1,009,490

 

 

 

 

 

 

 

Minority interest

 

6,706

 

5,615

 

 

 

 

 

 

 

Stockholders' equity

 

323,766

 

263,137

 

Mezzanine notes

 

63,416

 

61,863

 

 

 

 

 

 

 

Total stockholders' equity

 

387,182

 

325,000

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

1,963,629

 

$

1,340,105

 

 


(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 $135.8 million and $63.1 million at September 30, 2003 and December 31, 2002, respectively.

 

(3)               On October 14, 2003, the Company refinanced all of the outstanding loans under the amended and restated credit agreement it entered into in connection with the completion of the Insignia Acquisition. The Tranche A and Tranche B facilities were combined into a single term loan facility, of which $300.0 million was drawn on October 14, 2003.

 

(4)               Includes non-recourse debt relating to a building investment in Japan of $42.3 million and $40.0 million at September 30, 2003 and December 31, 2002, respectively.