<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
Commission File Number: 1-8122
GRUBB & ELLIS COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-1424307
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2215 Sanders Road, Suite 400,
Northbrook, IL 60062
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(847) 753-7500
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Change
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No ___
---
19,753,576
------------------------------ -------------------
(Number of shares outstanding of the registrant's
common stock at November 5, 1998)
<PAGE>
PART I
FINANCIAL INFORMATION
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months
Ended September 30,
----------------------------------
1998 1997
------------- -----------------
<S> <C> <C>
Revenue:
Transaction services fees $ 64,213 $ 54,821
Management services fees 11,956 7,278
------------ ------------
Total revenue 76,169 62,099
------------ ------------
Costs and expenses:
Transaction services commissions 37,272 31,202
Salaries, wages and benefits 20,307 15,859
Selling, general and administrative 13,656 11,995
Depreciation and amortization 1,273 736
------------ ------------
Total costs and expenses 72,508 59,792
------------ ------------
Total operating income 3,661 2,307
Other income and expenses:
Interest and other income 212 279
Interest expense (157) -
------------ ------------
Income before income taxes 3,716 2,586
Net (provision) benefit for income taxes (1,406) 449
------------ ------------
Net income $ 2,310 $ 3,035
------------ ------------
------------ ------------
Net income per common share:
Basic - $ .12 $ .16
------------ ------------
------------ ------------
Diluted - $ .11 $ .14
------------ ------------
------------ ------------
Weighted average common shares outstanding:
Basic - 19,722,124 19,541,544
------------ ------------
------------ ------------
Diluted - 21,879,551 22,036,137
------------ ------------
------------ ------------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
September 30, June 30,
1998 1998
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,890 $ 14,251
Services fees receivable 9,944 8,006
Other receivables 1,642 2,329
Prepaids and other current assets 3,405 3,179
Deferred tax assets 5,584 5,584
------------ -----------
Total current assets 31,465 33,349
Noncurrent assets:
Equipment and leasehold improvements, net 13,289 13,152
Goodwill, net 21,562 10,578
Deferred tax assets 2,990 4,140
Other assets 2,476 2,299
------------ -----------
Total assets $ 71,782 $ 63,518
------------ -----------
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,127 $ 3,845
Acquisition indebtedness 4,703 2,807
Accrued compensation and employee benefits 9,250 6,948
Other accrued expenses 5,303 3,927
------------ -----------
Total current liabilities 22,383 17,527
Long-term liabilities:
Acquisition indebtedness 719 -
Accrued claims and settlements 9,485 9,041
Other liabilities 1,235 1,536
------------ -----------
Total liabilities 33,822 28,104
------------ -----------
Stockholders' equity:
Common stock, $.01 par value: 50,000,000
shares authorized; 19,753,576 and 19,721,056
shares issued and outstanding at September 30,
1998 and June 30, 1998, respectively 198 198
Additional paid-in-capital 111,798 111,562
Retained earnings (deficit) (74,036) (76,346)
------------ -----------
Total stockholders' equity 37,960 35,414
------------ -----------
Total liabilities and stockholders' equity $ 71,782 $ 63,518
------------ -----------
------------ -----------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months ended
September 30,
---------------------------
1998 1997
--------- ----------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 2,310 $ 3,035
Net adjustments to reconcile net income to net cash provided by operating
activities 4,532 (1,294)
--------- ----------
Net cash provided by operating activities 6,842 1,741
--------- ----------
Cash Flows from Investing Activities:
Purchases of equipment, software and leasehold improvements (1,008) (1,418)
Cash paid for business acquisitions, net of cash acquired (9,195) -
--------- ----------
Net cash used in investing activities (10,203) (1,418)
--------- ----------
Net (decrease) increase in cash and cash equivalents (3,361) 323
Cash and cash equivalents at beginning of period 14,251 16,790
--------- ----------
Cash and cash equivalents at end of period $ 10,890 $ 17,113
--------- ----------
--------- ----------
------------------------------------------------
Supplemental Disclosure of Cash Flow Information:
Cash payments during the period for:
Interest $ 110 $ 195
Income taxes 582 -
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
GRUBB & ELLIS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM PERIOD REPORTING
The accompanying unaudited condensed consolidated financial statements
include the accounts of Grubb & Ellis Company and its wholly owned
subsidiaries and controlled partnerships (collectively, the "Company").
The accompanying unaudited condensed consolidated financial statements
are prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements and,
therefore, should be read in conjunction with the Company's Annual
Report on Form 10-K for the year ended June 30, 1998.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities (including disclosure of contingent assets and
liabilities) at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
In the opinion of management, all adjustments necessary for a fair
statement of the financial position and results of operations for the
interim periods presented have been included in these financial
statements and are of a normal and recurring nature. Certain amounts in
prior periods have been reclassified to conform to the current
presentation.
Operating results for the three months ended September 30, 1998 are not
necessarily indicative of the results that may be achieved in future
periods.
2. INCOME TAXES
The Company recognized a tax provision in the current quarter in
connection with the realization of deferred tax assets related to net
operating loss carryforwards. In addition, the Company recognized a tax
benefit in the three months ended September 30, 1997, as a result of a
reduction in the valuation allowance against its net deferred tax
assets. The net provision for income taxes for the three months ended
September 30, 1998 and 1997 is as follows (in `000's):
<TABLE>
<CAPTION>
For the three months ended
September 30,
---------------------------------------------
1998 1997
------------------ -------------------
<S> <C> <C>
Current $ 256 $ 151
Deferred 1,150 (600)
----- -----
$ 1,406 $(449)
======== =====
</TABLE>
6
<PAGE>
GRUBB & ELLIS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted
earnings per share from continuing operations (in thousands, except per
share data):
<TABLE>
<CAPTION>
For the three months ended September 30,
---------------------------------------------
1998 1997
-------------------- -------------------
<S> <C> <C>
BASIC EARNINGS PER SHARE:
Net income $ 2,310 $ 3,035
------- -------
------- -------
Weighted average common shares outstanding 19,722 19,542
------- -------
------- -------
Earnings per share - basic $ 0.12 $ 0.16
------- -------
------- -------
DILUTED EARNINGS PER SHARE:
Net income $ 2,310 $ 3,035
------- -------
------- -------
Weighted average common shares outstanding 19,722 19,542
Effect of dilutive securities:
Stock options and warrants 2,158 2,494
------- -------
Weighted average diluted common shares outstanding 21,880 22,036
------- -------
------- -------
Earnings per share - diluted $ 0.11 $ 0.14
------- -------
------- -------
</TABLE>
4. BUSINESS ACQUISITIONS AND RELATED INDEBTEDNESS
On July 22, 1998, the Company acquired substantially all of the assets of
Bishop Hawk, Inc. for total consideration of approximately $11.1 million,
inclusive of seller financing totaling approximately $2.5 million. The
Company has recorded the acquisition under the purchase method of accounting,
and all operations subsequent to the acquisition date are reflected in the
Company's financial statements for the three months ended September 30, 1998.
The notes to the seller are payable in installments through July 22, 2000,
and bear interest at a weighted average rate of 9.14% per annum. Up to
$500,000 will be deducted from the amounts due under the notes, therefore
reducing the recorded purchase price, in the event that certain revenue
levels are not attained in the first year following the acquisition. The
Company also will pay an additional amount ("Earnout Payment" ), which, if
earned, will be payable by September 22, 1999. The Earnout Payment is payable
to the extent that the gross revenue earned by the Company during the twelve
months following the date of the acquisition through the efforts of the
former Bishop Hawk, Inc. professionals who join the Company exceeds agreed
upon levels. Due to
7
<PAGE>
GRUBB & ELLIS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. BUSINESS ACQUISITIONS AND RELATED INDEBTEDNESS (CONTINUED)
the contingent nature of this payment, the Company will record this portion
of the purchase price only to the extent it is paid to the seller.
In connection with this acquisition, the Company incurred $3.5 million of
borrowings under its credit facility, all of which were repaid by August 21,
1998.
PRO FORMA INFORMATION:
The following unaudited pro forma financial information reflects the
operations of the Company for the three months ended September 30, 1997,
assuming the above acquisition had occurred on July 1 of that year (in
thousands, except share data):
<TABLE>
<S> <C>
Total revenue $66,433
Income before taxes 2,963
Net income 3,268
Earnings per share:
Basic .17
Diluted .15
</TABLE>
The Company's results of operations for the three months ended September 30,
1998, which include operations of Bishop Hawk, Inc. subsequent to the date of
acquisition, do not materially differ from pro forma results that would have
been obtained for that period. Pro forma information does not purport to be
indicative of the results that would have been obtained had these events
occurred at the beginning of the periods presented, and is not intended to be
a projection of future results.
4. COMMITMENTS AND CONTINGENCIES
The Company previously disclosed in its Annual Report on Form 10-K for the
year ended June 30, 1998, information concerning a lawsuit entitled JOHSZ ET
AL. V. KOLL COMPANY, ET AL., and a related lawsuit entitled MAIONA V.
SOUTHERN CALIFORNIA EDISON, ET AL. and a class action lawsuit, JOHN W.
MATTHEWS, ET AL. V. KIDDER, PEABODY & CO., ET AL. and HSM INC., ET AL. Since
such report, the Company's motion to dismiss the MAIONA case was granted and
the Company anticipates that the plantiffs will appeal. There have been no
other material changes with respect to these matters.
The Company is involved in various other claims and lawsuits arising out of
the conduct of its business, as well as in connection with its participation
in various joint ventures, partnerships, a trust, and an appraisal business,
many of which may not be covered by the Company's insurance policies. In the
opinion of management, the eventual outcome of such claims and lawsuits is
not expected to have a material adverse effect on the Company's financial
position or results of operations.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements which 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 these
statements. Such factors, which could adversely affect the Company's ability
to obtain these results include, among other things, (i) the volume of
transactions and prices for real estate in the real estate markets generally,
(ii) a general or regional economic downturn which could create a recession
in the real estate markets, (iii) the Company's debt level and its ability to
make interest and principal payments, (iv) an increase in expenses related to
new initiatives, investments in personnel and technology, and service
improvements, (v) the success of new initiatives and investments, (vi) the
impact of year 2000 technology issues, (vii) the ability of the Company to
integrate acquired companies and assets, and (viii) other factors described
in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998.
RESULTS OF OPERATIONS
REVENUE
The Company's revenue is derived principally from transaction services fees
related to commercial real estate, which include commissions from leasing,
acquisition and disposition transactions as well as fees from appraisal,
consulting and asset management assignments. Management services fees
comprise the remainder of the Company's revenues, and include fees related to
both property and facilities management, business services, construction
management and agency leasing.
Revenue in any given quarter during the three fiscal year period ended June 30,
1998, as a percentage of total annual revenue, ranged from a high of
31.2% to a low of 19.1%, with revenue earned in the first quarters of each of
the last three fiscal years ranging from 22.0% to 24.4%. The Company has
historically experienced its lowest quarterly revenue in the quarter ending
March 31 of each year with progressively higher revenue in the quarters
ending June 30, September 30, and December 31, due to increased activity
caused by the desire of clients to complete transactions by calendar year-end.
Total revenue for the quarter ended September 30, 1998 was $76.2 million, an
increase of 22.7% over revenue of $62.1 million for the same period last
year, reflecting strong real estate markets overall and increased business
activity across the Company's service lines. This improvement related
primarily to a $9.4 million increase in transaction services commissions over
the same period in 1997. Management services fees of $12.0 million for the
quarter ended September 30, 1998 increased by $4.7 million, or 64.3%, as a
result of increased activity in business services and property and facilities
management.
9
<PAGE>
COSTS AND EXPENSES
Transaction services commission expense is the Company's major expense and is
a direct function of gross transaction services commission revenue levels. As
a percentage of this revenue, related commission expense increased to 58.0%
for the quarter ended September 30, 1998 as compared to 56.9% for the same
period in 1997. This increase was due to the Company's transaction services
professionals achieving certain production thresholds earlier in 1998 than
1997.
Total costs and expenses, other than transaction services commissions and
depreciation, increased for the three months ended September 30, 1998, by
$6.1 million or 21.9% over the comparable period last year. The rise in costs
is attributable primarily to expenses associated with increased Management
Services business activity.
Depreciation and amortization expense for the three months ended September 30,
1998 increased to $1.3 million from $736,000 in the comparable period
last year, as the Company placed in service numerous technology
infrastructure improvements during fiscal year 1998. Amortization of the
goodwill related to the Company's various business acquisitions during 1998
also contributed to this increase.
NET INCOME
Net income of $2.3 million or $.11 per common share on a diluted basis for
the quarter ended September 30, 1998 decreased from net income of $3.0
million or $.14 per common share for the same period in 1997. The decrease
was due primarily to a provision for income taxes of $1.4 million in the
three months ended September 30, 1998 as compared to a net tax benefit of
$449,000 related to a reduction in the valuation allowance against certain
deferred tax assets in the same period last year. Net income for the quarter
ended September 30, 1998, reflects an effective tax rate of 38 percent,
compared with a rate of 6 percent in the same period last year (exclusive of
the non-recurring deferred tax benefit) due to the utilization of net
operating loss carryforwards from prior years. Income before taxes increased
to $3.7 million for the three months ended September 30, 1998 from $2.6
million in the prior year, due primarily from increased income related to the
Company's transaction services business.
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased by $6.7 million to $9.1 million during the quarter
ended September 30, 1998, while cash and cash equivalents decreased by $3.4
million during the same period. The Company used net cash provided by
operating activities of $6.8 million, along with existing cash reserves, to
fund investing activities of $10.2 million. Investing activities included
cash paid for business acquisitions and related costs of $9.2 million,
related primarily to Bishop Hawk, Inc, and purchases of equipment, software
and leasehold improvements totaling $1.0 million. See Note 4 of Notes to
Condensed Consolidated Financial Statements for additional information.
The Company believes that its short-term and long-term operating cash
requirements, including its technology initiative commitments, will be met
10
<PAGE>
by operating cash flow. In addition, the Company has a $35 million credit
facility available for additional capital needs. Currently, the Company has
no outstanding borrowings under the credit facility.
To the extent that the Company's cash requirements are not met by operating
cash flow or borrowings under its credit facility, in the event of adverse
economic conditions or other unfavorable events, the Company may find it
necessary to reduce expenditure levels or undertake other actions as may be
appropriate under the circumstances.
The Company continues to explore additional strategic acquisition
opportunities that have the potential to broaden its geographic reach,
increase its market share to a significant portion and/or expand the depth
and breadth of its current lines of business. The sources of consideration
for such acquisitions could be cash, the Company's current credit facility,
new debt, and/or the issuance of stock. Although it is the Company's intent
to actively pursue this strategy, no assurances can be made that any new
acquisitions will occur.
YEAR 2000 ISSUES
During fiscal years 1997 and 1998, the Company significantly increased its
investment in various technology initiatives. The Company embarked upon these
initiatives to enhance the productivity of its staff and business processes,
and to provide a stable platform to support the Company's recent and future
growth. In addition, this technology improvement plan has replaced most of
the Company's information systems and equipment platforms, including
intranet, human resources, general ledger, accounts payable and transaction
services management, and consequently has brought these systems into
compliance with year 2000 requirements. The Company is currently in the
process of developing a new transaction services revenue system, and is
completing upgrades to various remaining servers and desktop computers. The
Company expects to complete all major initiatives by the end of fiscal year
1999, and consequently to mitigate any material risk associated with the year
2000. The Company has made capital expenditures totaling $7.0 million through
August 1998 related to these systems, and currently expects to invest an
additional $1.3 million over the next thirteen months to complete its
technology plan, of which $1.1 million relates to software development and
the remainder to equipment upgrades. Management of the Company believes it
has an effective program in place relating to its internal information
systems to resolve the year 2000 issue in a timely manner, although no
assurances can be given in this regard.
The Company is also assessing its exposure to year 2000 issues other than
those related to internal information systems, including issues related to
third party vendors, in order to develop an appropriate plan (including
contingencies to address these risks). In addition to its own information
systems, the Company's year 2000 plan includes consideration of building
systems in properties managed by Grubb & Ellis Management Services ("GEMS")
(as well as the Company's facilities), various property accounting systems
for GEMS clients, and telecommunications systems. The Company completed an
initial evaluation of its telecommunication systems and has engaged a
11
<PAGE>
consultant to assist in determining how to cost-effectively upgrade or
replace non-compliant telephone, voice mail, facsimile and other
telecommunications equipment. The Company will face business interruption
risk if telecommunications are suspended as a result of a year 2000 issue.
GEMS is working with its clients (property owners) to gather information on
the year 2000 readiness of building systems such as security, elevator and
HVAC. For client accounting, GEMS is evaluating all its hardware, software
and operating systems, and non-compliant equipment will be upgraded or
replaced. GEMS has surveyed the vendors of its client accounting software and
is working with its clients as well as these vendors to address these systems
in a timely fashion.
The Company is currently developing a contingency plan to address any risks
associated with the Company not completing its plan before the year 2000.
Since the Company cannot anticipate all possible outcomes of the year 2000
problem, nor predict the readiness of entities with which it transacts
business, there can be no assurance these events will not have a material
adverse effect on the Company's business, financial condition, results of
operations or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company considered the provision of Financial Reporting Release No. 48
"Disclosure of Accounting Policies for Derivative Financial Instruments and
Derivative Commodity Instruments, and Disclosure of Quantitative and
Qualitative Information about Market Risk Inherent in Derivative Financial
Instruments, Other Financial Instruments and Derivative Commodity
Instruments". The Company had no holdings of derivative financial or
commodity instruments at September 30, 1998. A review of the Company's other
financial instruments and risk exposures at that date revealed that the
Company had exposure to interest rate risk. The Company utilized sensitivity
analyses to assess the potential effect of this risk and concluded that
near-term changes in interest rates should not materially adversely affect
the Company's financial position, results of operations or cash flows.
12
<PAGE>
PART II
OTHER INFORMATION
(ITEMS 2, 3, 4 AND 5 ARE NOT APPLICABLE
FOR THE QUARTER ENDED SEPTEMBER 30, 1998)
13
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
The information called for by Item 1 is incorporated by
reference from Note 4 to Notes to Condensed Consolidated
Financial Statements.
ITEM 6(a). EXHIBITS
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION
OR SUCCESSION
2.1 Asset Purchase Agreement by and among Bishop Hawk, Inc.,
Sopilote Inc., N. Bruce Ashwill and Grubb & Ellis Company dated
July 22, 1998, without exhibits, incorporated herein by
reference to Exhibit 2.1 to the Registrant's Current Report on
Form 8-K filed on August 6, 1998 (Commission File No. 1-8122).
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Certificate of Incorporation of the Registrant, as restated
effective November 1, 1994, incorporated herein by reference to
Exhibit 3.2 to the Registrant's Annual Report on Form 10-K
filed on March 31, 1995 (Commission File No. 1-8122).
3.2 Certificate of Retirement with Respect to 130,233 Shares of
Junior Convertible Preferred Stock of Grubb & Ellis Company,
filed with the Delaware Secretary of State on January 22, 1997,
incorporated herein by reference to Exhibit 3.3 to the
Registrant's Quarterly Report on Form 10-Q filed on February
13, 1997 (Commission File No. 1-8122).
3.3 Certificate of Retirement with Respect to 8,894 Shares of
Series A Senior Convertible Preferred Stock, 128,266 Shares of
Series B Senior Convertible Preferred Stock, and 19,767 Shares
of Junior Convertible Preferred Stock of Grubb & Ellis Company,
filed with the Delaware Secretary of State on January 22, 1997,
incorporated herein by reference to Exhibit 3.4 to the
Registrant's Quarterly Report on Form 10-Q filed on
February 13, 1997 (Commission File No. 1-8122).
3.4 Grubb & Ellis Company Bylaws, as amended and restated effective
June 1, 1994, incorporated herein by reference to Exhibit 3.2
to the Registrant's Quarterly Report on Form 10-Q filed on
November 13, 1996 (Commission File No. 1-8122).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
4.1 Promissory Note issued July 22, 1998 by the Registrant in favor
of Bishop Hawk, Inc. in the amount of $1,449,800, incorporated
herein by reference to Exhibit 2.2 to the Registrant's Current
Report on Form 8-K filed on August 6, 1998 (Commission File No.
1-8122)
4.2 Promissory Note issued July 22, 1998 by the Registrant in favor
of Bishop Hawk, Inc. in the amount of $1,084,020, incorporated
herein by reference to Exhibit 2.3 to the Registrant's Current
Report on Form 8-K filed on August 6, 1998 (Commission File No.
1-8122)
(27) FINANCIAL DATA SCHEDULE
ITEM 6(b) REPORTS ON FORM 8-K
A Current Report was filed on August 6, 1998, as amended October 5,
1998, disclosing the acquisition of certain assets of Bishop Hawk, Inc.
14
<PAGE>
SIGNATURE
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.
GRUBB & ELLIS COMPANY
---------------------
(Registrant)
Date: November 13, 1998 /s/ Brian D. Parker
-------------------
Brian D. Parker
Senior Vice President and
Chief Financial Officer
15
<PAGE>
GRUBB & ELLIS COMPANY
EXHIBIT INDEX
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
Exhibit
(27) FINANCIAL DATA SCHEDULE
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS AND CONSOLIDATED BALANCE SHEETS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,890
<SECURITIES> 0
<RECEIVABLES> 13,030
<ALLOWANCES> 1,444
<INVENTORY> 0
<CURRENT-ASSETS> 31,465
<PP&E> 30,552
<DEPRECIATION> 17,263
<TOTAL-ASSETS> 71,782
<CURRENT-LIABILITIES> 22,383
<BONDS> 0
0
0
<COMMON> 198
<OTHER-SE> 37,762
<TOTAL-LIABILITY-AND-EQUITY> 71,782
<SALES> 0
<TOTAL-REVENUES> 76,381
<CGS> 0
<TOTAL-COSTS> 37,272
<OTHER-EXPENSES> 35,236
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 157
<INCOME-PRETAX> 3,716
<INCOME-TAX> 1,406
<INCOME-CONTINUING> 2,310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,310
<EPS-PRIMARY> .12
<EPS-DILUTED> .11
</TABLE>
